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Originally Posted On: How competitive intelligence grows your business | QuickBooks (intuit.com)
Every niche has competitors. You likely won’t be the sole provider of a service or product in any industry. Competitor analysis and competitive research are an integral part of growing your business. Learning what other brands are up to and what strategies they’re using helps you plan and strategize better. It also gives you a good idea of what works and what doesn’t for your own customers.
The advent of the internet and social media has made competitor analysis more straightforward and comprehensive. Business owners can now conveniently identify their competitors and learn more about their engagement, strategies, and tactics. If you properly conduct competitive analysis, you’ll end up with plenty of quantitative and qualitative data to get a sense of the competitive landscape. Incorporating these insights into your strategies will help you get the best results.
There’s a lot of hype surrounding the benefits of a competitive analysis, but is it really all that? We think so. And after learning more about how it can help your brand in this article, we hope that you will, too.
What is a competitive analysis?
Competitive analysis is the process of identifying your major business competitors and conducting research to evaluate their strengths and weaknesses. This analysis usually involves researching their products, services, sales, and marketing strategies. You can use this information to build better business strategies for your own business—and outperform your competitors.
Why is it important to research competitors?
Conducting a competitive analysis will give you a better understanding of how your competitors are strategizing. When you understand how their businesses work, you can identify opportunities to outperform them. A competitive analysis also helps you gather valuable insights about your industry, so you can ensure your business is meeting industry standards.
Let’s take a look at some of the benefits of conducting a competitive analysis.
Increase market share
Competitor analysis helps you keep up with industry trends, which is vital for staying ahead of the curve. It also gives insight into the saturation of competitors in different segments of your target market.
This analysis can help you uncover market segments where your competitors are falling short and where you can step in to serve the target audience better. You can also use this analysis to identify the target audience’s pain points, so you can plan and improve your products accordingly.
Ultimately, a competitive analysis allows you to identify opportunities to increase your market share.
Convert more customers
Competitive analysis can help you identify new customers you can attract by providing better services or incentives. You can learn what the audience in your niche expects from businesses like yours and look for opportunities to convert them to your brand. Using a competitor analysis, you can find out where your competitor’s products haven’t performed well and avoid making the same mistakes yourself.
With this information in mind, you can work on developing improved products and services that will attract and convert customers. Knowing your competitors’ weaknesses will give you a competitive advantage that you can use to expand your customer base.
Improve your marketing content, ads, and campaigns
Gaining insight into your competition’s marketing strategy can help you pinpoint the tactics and practices that are most effective with your target audience. A competitive analysis will help you uncover these tactics and identify the best channels for employing those marketing strategies. With competitive data under your belt, you can improve your ads and help your content rank higher by using proper keywords and focusing your campaigns.
Find weaknesses in your products or services
By analyzing competitor strategies and engagement tactics, you can identify areas where your own business might need some improvement. You might come across new strategies you haven’t tried yet, and you can learn how to pull them off effectively through your competitors.
The competitive analysis provides you with accurate benchmarks to measure your brand’s success and determine where improvements are needed.
See what technology they’re using
By exploring the technologies your competitors are using and how they help them engage their audience, you can determine whether you’re at a competitive disadvantage. Incorporate into your own business technology that has already proved successful for your competitors to increase your engagement and revenue.
How to conduct your competitive analysis
If you want to know more about your competitors, you’ll need to conduct a proper competitor analysis. Don’t worry—it’s not as complicated as it sounds. Here’s how you can go about it in 10 simple steps.
1. Identify your competitors
Start by building a rough list of competitors. You’re probably aware of your local competitors, but it’s always a good idea to dig a little deeper. Search on Google, or use websites like BuiltWith or Alexa. Look for competitors by using keywords related to your business niche. Storing this data in spreadsheets makes it easier for you to organize and analyze later.
You should categorize your competitors as primary, secondary, or tertiary competitors. Your primary competitors are your business’s direct competitors. They have similar products or services and share the same target market. These competitors will be the reference brands for your audience when they think about your business.
Your secondary competitors are your indirect competitors. These are the companies that sell similar products and services but to a different target audience. And finally, tertiary competitors share the same target audience as your business, but they don’t offer the same products or services. These businesses don’t directly compete with your brand, but they may become future competitors if they decide to expand or change their business. It’s a good idea to check in on these tertiary competitors every once in a while. Tertiary competitors could also become potential partners in the future.
2. Examine your competitors’ websites and customer experience
Now that you’ve gathered a list of your competitors, you can begin building and analyzing their competitive profiles. Start by looking at their business website. How is it designed? How does it perform? And how does it compare to your own?
If their site is easier to navigate, contains more relevant content, or experiences higher customer engagement, you might consider making similar updates to your own website.
3. Identify your competitor’s market positioning
To determine whether your competitors’ policies are worth taking inspiration from, first look at their position in the marketplace. This can be done by looking at your competitor’s strengths and weaknesses and how the target audience is engaging with them. Once you’re done with your research, you can build a comparison matrix to see where you compare against your competitors.
4. Review their pricing
An excellent way to determine whether your pricing strategy is appropriate for your target audience is to check out the pricing policies of your competition. Find out how much they charge for products or services similar to yours. You can do this manually or by using tools like Price2Spy and Prisync.
Once you have the pricing info, you can review your own pricing to determine how they compare. If you find your prices are much higher than your competitors, you can lower your pricing, or update your messaging to show why your products are worth the premium.
5. Read their reviews
Customer reviews are a window into how your target audience feels about your competitors. Keeping an eye on competitor customer reviews can help you rank your competitors and decide which businesses you should focus on. Highly rated competitors are stronger competitors.
By looking at the reviews, you can learn more about what customers expect from businesses in your niche. Reviews will also help identify strategies that sit well with the customers, so you can adopt them in your own business policy. For example, if a competitor’s reviews mention they lack a certain feature, you can promote that feature in your campaigns and messaging to convince customers to switch.
6. Review social media
As a small business owner, you’re always on the lookout for ways to increase your audience. Social media provides small businesses with a strong platform from which to expand their reach and engagement beyond their local sector. Even better, it allows business owners to connect with their audience in deeper ways.
While conducting your competitive analysis, be sure to check out your competitors’ social networks. Identify the posts and content their audience most often engages with and look for ways to replicate that content using your own social media presence.
Determine how frequently they post and which posts earn the most likes or comments, and identify the influencers they most often work with. On the flip side, identify the messaging that isn’t playing well with their audience so you can avoid making the same mistakes on your platform.
7. Look at their go-to platforms
Another way to gather insight into your competition is by looking at their profiles on different social media channels. This way, you can determine which social media platform hosts the largest amount of target audience for your niche. You can also see which strategies are successful on different social media platforms.
For example, the marketing strategies on Twitter and Instagram are going to be pretty different. While Twitter users thrive on short, snappy tweets, Instagram users crave visual content like photos and reels. If your competition is crushing it on Twitter, it’s a good sign that your target audience lives on that platform.
8. Learn what technology stack your competitors use
Learn about the marketing technology and tools your competition is using, and think about how you can integrate those tools into your own business approach. For example, if your competition focuses on search engine optimization (SEO) and keywords and is getting good engagement, such a strategy might be suitable for you. Using tech stack tools like BuiltWith, you can find out what tools your competition uses to build their websites and content.
9. Observe how they promote their marketing content
By learning about your competitors’ marketing tactics, you can improve your own marketing plans. You might even identify some marketing opportunities you’ve been missing.
Study their blog posts, download their white papers, read their case studies, and subscribe to their newsletters. Learn about their multimedia marketing by analyzing their videos, podcasts, and webinars (if they use these channels). Their paid ads and marketing images can tell you how they are promoting their marketing content—and how their audience is reacting to it.
10. Read press releases or a 10-Q (for publicly-traded competitors)
The SEC Form 10-Q is a comprehensive report that details the performance of a publicly-traded company. All public companies must submit this report to the U.S. Securities and Exchange Commission (SEC) every quarter. This is usually an unaudited report. By looking at your competition’s 10-Q reports, you can find out how well they’re performing in your niche market. This is another way to rank your competition.
What to do after the competitive analysis is done
Now that you’ve taken care of the competitive analysis, what do you do with all that information? Use that data to identify new, effective marketing strategies for your brand. Here’s how:
Perform a SWOT analysis
A SWOT analysis gives useful insights into your competitor’s Strengths, Weaknesses, Opportunities, and Threats. Once you’ve completed a SWOT analysis of your competitors, pull your team together and do a SWOT for your own business.
The SWOT analysis elaborates on the internal and external factors that affect a company’s performance. The internal factors are strengths and weaknesses, and the external factors are opportunities and threats that a business might face. By identifying these factors, you can estimate performance for your own brand and your competitors’ brands.
Update your products and services as needed
When you’ve finished analyzing the competition, it’s time to get out there and apply what you’ve learned. Design a strategic plan for optimizing your products and services and get started on advertising. If you’ve identified your competitors’ weak areas, work toward filling that space in the market by introducing new products and services for your target audience. Employ your competitors’ strategies that are proving successful with your target customers, and make any necessary changes or updates to your products and services.
Review your pricing model
Once you’ve analyzed your competition’s pricing model and know how well their customers receive it, it’s time to review your own pricing policy.
Look at where you stand on the quality vs. quantity spectrum and determine whether you need to change your prices to be more attractive to customers. Make sure your value proposition is clear. If your customers are getting better quality and lower prices from your competition, it’s obvious they’re going to choose them over you. So, choose your pricing strategy wisely.
Create new marketing content or update the content as needed
Marketers know that content is king. Once you’ve looked at your competition’s marketing strategies and know which methods are well received by the audience, review your own marketing strategy for gaps.
Start by analyzing your social media channels. Consider investing in paid marketing channels like Facebook ads. If you’ve discovered that your target audience lives on Instagram, focus your efforts on uploading high-quality, engaging content to increase your engagement with potential customers.
Change your social media and customer service approach (if relevant)
By looking at your brand’s social media analytics and competition, you can determine whether you need to improve your social media and customer service approach. Which social media platform you need to focus on is going to depend on your target market. If your competitor’s social media is succeeding with the target audience, you need to identify and incorporate their strategies and up your own social media game.
Tools for running a competitive analysis
There are countless advanced tools for performing competitive analysis in your business niche. These tools will help you design the ultimate winning strategies for your business. We’ve compiled some of the most popular—choose the tools that work best for your business.
Knowing which technology your competitors are using can help you determine if your tech stack needs improvement. Here are the two most popular services for analyzing tech stacks:
- BuiltWith: BuiltWith is a tool that lets you look at what your competition’s website is built with through a simple click.
- Wappalyzer: Wappalyzer is a technology profiler that lets its users know what tools a certain website is built with.
Marketing content and keyword data
SEO competitive analysis focuses on marketing content and keyword data. Here are a few examples:
- SEMrush: SEMrush is an SEO and search analytics tool that’s used all over the world. It lets you look at your competition’s most valuable keywords.
- Ahrefs: Ahrefs is a competitor analysis tool specializing in data about SEO. It lets you check the organic words used by your competitors.
- Topic: Topic is a content optimization tool that lets businesses write SEO-optimized content. With Topic, companies can create automated content briefs to improve SEO and search rankings.
By looking at your competition’s pricing policy, you can better understand how to improve your pricing. Here are a few tools that help you do this:
- Prisync: Prisync is a competitor pricing tool that allows you to track and monitor your competition’s pricing.
- Price2Spy: Price2Spy is a tool that lets you monitor and compare the prices of your competition and allows you to reprice your products accordingly.
Social media is a generally competitive space. All businesses strive to get better engagement with their customers through social media platforms. Here are a few examples you can use for competitor analysis:
- Facebook: Facebook Audience Insights gives you data and information about the audiences related to your niche. You can also get information about your competitors’ strategies and audiences.
- Instagram: Instagram is one of the largest social networks with a heavily engaged audience. You can view your competitors’ profiles to see what kind of content they post and the influencers they work with.
- Twitter: Because Twitter is so popular, you can determine the popularity of your competition by looking at their followers and engagement metrics on Twitter.
- TikTok: TikTok is becoming increasingly popular, especially among young audiences. You can determine your competition’s outreach by looking at their followers and content engagement on TikTok.
Bring it all together
Competitor analysis helps you highlight your competitors’ strengths and weaknesses, providing you with useful insights for devising your own marketing strategy. Competitor analysis helps you keep up with the latest trends and tactics, identify new opportunities, and prepare for potential curveballs.
The idea behind competitive analysis isn’t to steal your competitor’s identity but to learn from them and devise more strategic business plans for your brand. The ultimate winning strategy for any business is to focus on your customers. The competitive analysis gives you insight into better ways to do this.