The great Chinese general Sun Tzu once said, “If you know the enemy and know yourself, you need not fear the result of a hundred battles”. While business is not exactly war (although sometimes it may feel like that!), the quote still rings true. To succeed, business owners need to understand not only their own companies well but also those of their competitors. This is why many businesses incorporate the art of competitive analysis into their marketing strategies.
What is competitive analysis, you ask? Competitive analysis is the process of analysing a company’s major competitors and researching their products, services, and marketing strategies. In the ongoing battle for supremacy among your customers, competitive analysis provides a useful weapon to determine what the competition is doing and what kind of challenge they present to your business.
Let’s take a deeper look at how companies go about conducting competitive analysis as well as the benefits that businesses can derive from building competitive analysis into their marketing plans.
How competitive analysis is conducted
From a general perspective, every business has a different approach to how it conducts competitive analysis. That being said, there are some steps that almost all businesses adhere to:
- Identify your top competitors: It may be the most obvious step but it’s also the most important. In a marketplace where customers are spoilt for choice, who are you competing with? Identifying your direct rivals helps you understand the similarities between your product or service offering. More tellingly, it allows you to see the factors that differentiate you from the competition.
- Examine competitor sales and tactics: Now that you’ve identified your chief rivals in the battle for customer domination, the next step is to analyse their sales techniques and results. A thorough sales analysis process should cover several factors, including what the competitor’s sales process looks like, do competitors offer discounts on specific goods, which sales channels are they making use of, and what do their revenues look like on an annual basis? Understanding your competitors’ processes allows you to better prepare your own sales pitch to your customer base.
- Analyse the competition’s content: As you conduct your competitor analysis, pay attention to their content strategy. What type of content do they tend to focus on? How often do they post content? Do they offer any premium or gated content? What is the quality of their content? Which content gets the most traction? By asking these questions, businesses can gather great amounts of data on which content types appeal to customers, and which do not.
- Check out their social media pages: A lot can be learned by examining a business’s social media accounts. Businesses today often incorporate social media into their marketing strategies, so it helps to pay close attention to their social media content. How effectively does your competitor make use of social media? Do they promote engagement with their social media pages in any way? What are their engagement rates? All of these questions can help to determine whether it makes sense for them to get onto the social media bandwagon, or not. If you already have an established social media presence, examining a competitor may help to find clues to help build a bigger following and promote greater engagement.
- Compile a SWOT analysis: As your company collects all the relevant data, bear in mind that you still need to analyse it. A great way to sift through the data is through a SWOT analysis. A SWOT analysis enables you to assess your competitors’ strengths weaknesses, opportunities, and threats. During this process, you must be honest about the areas where competitors may be stronger, where they are weaker, the threats they can pose to growing your business, and opportunities that exist as a result of gaps in their offering.
What are the benefits?
There are so many benefits that businesses can derive from a strong competitive analysis strategy.
Besides gaining a better understanding of your rivals, a competitive analysis strategy enables businesses to better understand the marketplace, handle fluctuations in competitor pricing, develop a stronger digital marketing plan, avoid costly competitor mistakes and pitfalls, and even spot new industry trends before they take off.
All these benefits serve to ultimately enhance a company’s customer acquisition strategy.
It is worth mentioning that your core goals should always revolve around the customer, as there is no one more critical to your ultimate success.
A competitive analysis allows businesses to critically analyse how they stack up against their competition. In situations where they are found to be lagging, you can make the necessary changes to propel it forward.
As companies continue to push each other competitively, the customer is the one who reaps the rewards.
Competitor analysis done?
Let’s get your digital marketing strategy cracking then! Have a look at our recent article containing top digital marketing tips for the post-COVID era. It’s packed with more insights that’ll help you grow your business and beat your competitors at it!