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  • Writer's pictureMichael Campagna

The 5 Keys to Conducting an Effective Competitor Analysis

Many businesses get so caught up in their own initiatives and goals they forget there are dozens of other groups like them, doing the same thing, vying for the same customers. This myopia causes a lot of frustration in brands who are unaware of it until it's too late. But for brands who take the time to study their competition, understanding what they are doing well and what they are doing poorly, the opportunities for growth are endless.


The importance of conducting a competitor analysis

A competitor analysis is a key part of the preliminary research phase of your marketing plan. Your end goal throughout this research phase should be to learn more about your target audience. Ultimately, a competitor analysis should lead you closer to that goal by giving you a clear depiction of the alternatives that exist within your industry that your customers could choose over you.


A competitor analysis also helps to reveal the opportunities and gaps in your strategy when it comes to reaching that target audience. Many small business leaders subconsciously believe that they are marketing to a group of people who are only hearing from them. But odds are, your competition is targeting the same audience with their own strategic marketing messages. The challenge for your brand is to differentiate yourself from those other voices and to cut through the noise with something unique and persuasive. Today, we'll give you a step by step process to show you how.


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1. Find your primary competitors

The first step in the process should be identifying the primary competitors within your specific industry. While you can probably identify a wide range of businesses off the top of your head who do what you do, they aren't all primary competitors. You should seek to identify the brands that target the same group, offer similar products, and maybe even operate in the same geographic area (if you own a local business).


Ask yourself: if my business weren't around, where would this particular customer go for help? Your primary competitors are the organizations that your target audience could go to in order to solve their problem other than you.


Start by creating a simple list of those competitors. This will help to paint the broader picture of your competition as a whole as you move into the following steps.



2. Analyze their offers & price points

Once you identify your primary competitors, you should seek to understand the ways their offers differ from yours. It's important that you really try to put yourself in the shoes of your customers, seeing their messaging with a consumer (rather than a competitor) mindset.


How do they talk about their products/services? How do they package their products/services? What features do they highlight? How much do they charge?


Look through their entire selection of products and the full description of their services before returning to your own website. You might even come away with some ideas of how to improve your own offer (without copying that of your competition).


Creating a comprehensive comparison of your competitors' products/services doesn't just have to be for internal purposes. Zeeshan Akhtar, Head of Marketing at email marketing platform Mailmodo, suggests posting comparison pages on your website to show customers how your product sizes up to the competition. "Customers usually want to compare and choose a suitable tool or service and hence rely on such comparative analysis pages created by various websites and businesses." An unbiased analysis of your brand that helps your customer along their decision journey is a great way to build trust and improve your SEO at the same time.



Does your marketing plan include a competitor analysis?

  • Yes, it is a key part of our marketing plan

  • We are working on one now

  • No, we haven't conducted one before



3. Identify their positioning strategy

Taking the last section a step further, it's important to have a full understanding of the way your competition positions themselves in the marketplace.


What are some words that your primary competitors use to describe themselves on their website, social media, and other channels online? How do they want to be perceived by their target customers?


Many business leaders make the mistake of creating a messaging and positioning framework for their brand independent of their competition. It's impossible to carve out a unique position within your market without knowing how your competition is presenting themselves to the same audience.


And once you've identified your competitors' positioning strategies you can begin to develop your own. In doing this, start by asking: What does our target audience need to know in order to choose us over the competition? That's the basis of an effective positioning strategy that not only distinguishes you from your competitors but also allows you to target the right people.


4. Evaluate their reputation

Oftentimes there is a disparity between the way your competitors position themselves online and the way they are actually perceived by their customers.


This gap presents itself when customers are dissatisfied with the quality of work and feel frustrated by a brand failing to deliver in the way they assured them they would.


One of the best ways you can identify this gap is by evaluating the online reputation established by your competitors through customer reviews. Luckily, the modern customer is all too willing to post their grievances online. It's up to you to do your due diligence by reading those reviews on their website, social media, and Google Business page.


As you do so, consider the customer experience being described straight from the mouth of your target audience: What positive or negative experience did that customer have with that particular competitor? Where did that particular competitor drop the ball? And most importantly, how can you do better?


Like we said in the beginning, your goal shouldn't be keeping up with your competitors, but identifying the needs of your target audience and determining the ways your business can best meet those needs.


As you evaluate the reputation of your competitors, determine the reputation you are hoping to establish with your own brand. Hold that as an unwavering standard both internally and externally as you strive to be the best in your industry.



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5. Study their marketing and promotional tactics

Lastly, it's important to study the marketing and promotional strategies utilized by your competition. This will give you a good understanding of the market you're entering and even the strategies you could use to your own advantage.


Evaluate everything from your competitors' digital presence and social media engagement to content marketing strategies and online advertising campaigns.


Back in the day, this would have probably been a difficult task. But today there are plenty of software options available to you that allow for "spying" on your competitors' marketing efforts, in an ethical way.


Some helpful tools include:

  • SEMrush or Ahrefs: for tracking the website traffic, SEO tactics, and content performance of your competition.

  • Hootsuite: for identifying your competitors' social media performance and engagement.

  • SpyFu: for researching the PPC ad campaigns of competitors as well as their targeted keywords.

  • Buzzsumo: for learning more about trending content and the ways your competitors are capitalizing on it.


Conclusion

The most important part of a competitor analysis is learning more about the audience you're targeting and how you can best meet their needs. Understanding your competition is the first step of that process and allows you to create a unique brand within your industry that serves your customers better than anyone else.



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