In a competitive world you need strategies that will help you dominate your niche and stay on top.
That’s where competitor analysis comes in.
What is a competitor analysis?
As the name suggests, a competitor analysis is a process of evaluating your competitors’ products, positioning, and marketing strategies.
Conducted well, it will give you valuable insight into their strengths and weaknesses. More importantly, it will help you discover gaps and opportunities you can exploit to give your business an edge over the competition.
The best part is, it’s relatively straightforward to do and can be done in the office or even working from home.
5 reasons competitor analysis as a must for every business
While most businesses don’t take competitor analysis seriously, it must be an integral part of your data-driven marketing if you’re to succeed in staying ahead of the competition.
A few reasons for this are that competitor analysis can help you:
Develop better products
The best products are developed after gathering user feedback. Conducting a competitor analysis will help you get real user feedback from the market.
And if you’re a new business looking to break into the market, this feedback is invaluable.
Develop your unique value proposition (UVP)
To beat the competition, you must be different in the way you position yourself in the market.
And to do that, you must analyze the competition and find what sets you apart from them.
That’s your UVP, also known as a unique selling proposition (USP).
For example, Monday does this well by branding themselves as the best project management tool for marketing and creative teams:
Now it’s your turn to think about what makes your brand stand out from the noise.
Create new product categories
One of the benefits of conducting a competitor analysis is that it helps reveal market segments your competitors aren’t serving.
These market gaps are a great way to discover product categories that your customers need but aren’t available yet, and which you can fill.
Helps you measure your growth
Performing a competitor analysis is a great way to measure your progress realistically. This is because it gives you benchmarks to peg yourself against.
Design better marketing strategies
Competitor analysis is a great way to know which marketing strategies work for your competitors and which ones don’t.
As a result, it will also help you design more effective marketing strategies.
As you can see, a competitor analysis is not just something you do when you have the time and resources. It’s a must if you are to stay on top of your niche.
How to perform a competitor analysis in 7 easy steps
Now that you know what a competitor analysis is and why it’s essential, let’s dive into how to conduct one.
1. Identify your competitors
The first step to conducting an effective competitor analysis is to identify your competitors. This step is the most important as all other steps hinge on it.
To successfully identify your real competitors, you must divide them into three categories:
- Primary competitors. These are your direct competitors. They’re either targeting the same audience, have a similar product, or both.
- Secondary competitors. These are competitors that solve the same problem as you but with a different solution. They may also sell a similar product but targeting a different audience.
- Tertiary competitors. Tertiary competitors are those that offer products or services tangentially related to yours. Keeping an eye on them can help you expand into their markets.
You must identify your true competitors.
Only then can you create a robust competitor analysis framework that will enable you to get the right data to help you get an edge over your competition.
The data to include in your analysis includes (but is not limited to):
- Product/service offering
- Quality of product and customer service
- Number of employees
With this critical stage out of the way, you can now move on to the next steps.
2. Examine your competitors’ websites
You can learn a lot about your competitors from their websites.
That’s why you must make it a habit to visit and analyze their websites regularly.
An example of an easy-to-use tool for this is SimilarWeb.
This will give you insight into:
- The type of traffic they attract
- Design trends that improve user experience (UX)
- Communication methods they offer their customers
- Landing page designs that work (or don’t)
- How they display their products/services
- The kind of lead magnet they offer to grow their email list
Most product searches start online. This means a strong online presence is a must for every business.
And that’s why you must study what makes for a positive website UX for your target audience.
Analyzing your competitors’ websites will help you do just that. That’s especially true if you’re just starting to build out your website and content strategy.
3. Study their content strategy
Content marketing has become the pillar of most marketing strategies.
That’s because traditional invasive marketing methods like TV ads don’t work anymore. Today’s customers are savvy and require inbound marketing methods to attract them.
And content plays a huge role in your inbound marketing methods.
That’s why you must study your competitors’ content strategy as part of your competitor analysis. Take particular note of:
- Type of content. Check out the kind of content that generates traffic for your competitors and focus your energy on these content types. The multitude of content format types include newsletters, blog posts, podcasts, video, webinars, and infographics, to name a few.
- How often they publish. Cadence plays a vital role in the success of a content marketing strategy. That’s why knowing how often your competitors publish new content can help you design your content calendar.
- Content promotion strategy. Content strategy isn’t just about creating valuable content. A major part of it is content promotion. Find out what content promotion platforms and methods work well for your competitors.
Studying your competitors’ content strategy will help take a lot of the grunt work out of creating your own. It will also help you create an efficient strategy that produces results.
4. Analyze their SEO strategy
Those three simple letters have a huge impact on a business’s success in today’s digital world.
Analyzing your competitors’ search engine optimization (SEO) strategies is critical to understanding how to position yourself in the digital landscape.
It will also help you map out a strategy that will give you an advantage over your competition.
Wordtracker can help you get valuable insights on your competitor’s SEO strategy using their Inspect feature.
As you analyze your competitors’ SEO strategy, pay close attention to:
Keyword research is the backbone of every SEO strategy. Sure, you can dig up your own. But competitor keyword research will help you refine your research to uncover keywords that will help you rank faster.
It will also help you discover keywords that drive the best quality traffic in your niche.
Another major ingredient of a successful SEO campaign is a backlink strategy.
Conduct a backlink analysis on your competitors’ websites and find out where their backlinks come from and how they built them.
Make a special note of the sites and pages that drive the most traffic back to your competitors’ websites.
5. Listen to their customers
If there’s information you can’t get from your competitors, you can always get it from their customers.
This is where social listening comes in handy.
Social listening simply means monitoring all mentions of your competitors online.
By listening to what people are saying about your competitors, you can learn:
- Features your customers want
- Customer sentiments concerning the product/services
- Real product feedback
- Your competitors’ influencers and media allies
Using social listening tools, you can keep your finger on the pulse of what your competitor’s customers are saying about their products/services.
This data will help you create better products and services. It will also help you pre-empt customer objections before they arise.
6. Study their social media strategy
54% of social media users research products on their favorite social media platforms.
Ignoring social media today is tantamount to self-sabotage.
That’s why your competitor analysis must include a look at your competitors’ social media marketing strategies. For example, consider:
- Their main platforms
- The type of content they share
- How often they share
- Their engagement metrics
- How they engage with their followers
With over 63% of customers expecting brands to offer customer service via social media, you must nail your social media marketing.
And a good way to do that is to see how your competitors have designed their social strategy.
7. Put it all together
Once you’ve gathered all your competitors’ data, it’s time to put it all together. Analyze the data you’ve collected and use it to reflect on your processes.
This will help you stay ahead of industry trends and anticipate customer needs.
Most importantly, it will help you stay on top of the competition.
If all this is too much or too confusing, then you may consider getting help from 200+ accomplished marketing experts on sites like Growth Mentor.
Competitor analysis is key to your success
The key to success, especially in a competitive market, is to be one step ahead of your competitors.
To do that, you need to know their strategies.
More than that, you must find ways to create marketing strategies that will help you dominate your market.
That’s why competitor analysis is a critical component of a winning marketing strategy.