You’ve undoubtedly heard of it, but you might not be too familiar with the ins and outs of performing a competitive analysis. It’s a useful exercise that can give you valuable information about the products or services, strengths and vulnerabilities, marketing strategies, and other aspects of your primary competitors. And this in turn can help you better understand your target audience, identify new opportunities, capture more of the market share, and grow your brand.
Below we cover the major steps in performing a competitive analysis. Every brand—no matter your industry, how long you’ve been around, or how successful you are—can benefit from taking the time to go through them all.
Key Aspects of Performing a Competitive Analysis
- Figure out who your main competitors are. Obviously, performing a competitive analysis starts with this. It’s helpful to create two groups: direct competitors and indirect competitors. The former basically sell the same thing you do in your area, while the latter aren’t necessarily the same type of business or in your area, but they could potentially satisfy the same consumer needs that you do.
- Examine your competitors’ products/services. Compile a list of everything they offer, and note the prices. Get an idea of the quality, too.
- Investigate their sales process and results. Research their annual revenue and market share. Do they have an e-commerce component? What are all the channels they sell through? How active are salespeople in their operations? Are they growing (expanding their inventory, extending their hours, opening new locations, etc.) or downsizing?
- Determine their competitive advantage and how they communicate it. Look for their unique selling proposition, and evaluate how—and how well—they convey it to consumers. Is it truly unique? Is yours more or less compelling to your target market?
- Compare their prices to yours. Are you competitively priced on the same/similar products or services? If you charge more, are their clear advantages to buying from you that justify the higher cost? Are there opportunities to be the affordable option? The luxury option?
- See if they’re proactive about customer loyalty. Find out whether your competitors offer some sort of customer loyalty or rewards program, or any similar type of perks.
- Investigate their marketing strategies and results. Do they regularly offer discounts or other promotions? How attractive, modern, and user-friendly is their website? What social media do they use, how do they use it, how many followers do they have, and how much engagement do they get? Do they publish a blog on their website? What other types of content do they create? How good is their content? Do they maintain an email lists or send out a newsletter? Do they run digital ads and/or take out ads in traditional media?
- Check out their SEO. How do your competitors rank in search results for your brand’s important keywords? Are they appearing as top local results, demonstrating strong local SEO? Are you being outranked? Do they have content that ranks for informational queries related to your products or services? Take a close look at their website and content strategy.
- Perform a SWOT analysis for your competitors. Take everything you’ve learned to analyze each competitor’s strengths, weaknesses, opportunities, and threats. And if you haven’t recently done a SWOT analysis for your own brand, do that too. Then, compare yours to each of your competitor’s. This will provide valuable insights into how your brand can better compete against the others.