Competitor analysis are two words put together that can certainly seem intimidating. Analyzing the competition brings about a sense of nervousness where you may find yourself second-guessing if you are doing the best you can for your business. But all of the information obtained will help you shape your decisions moving forward.
Competition analysis provides you with information on your competitors’ strengths and weaknesses to compare your own. You can find areas in which you exceed your competitors and others where you fall short. While it’s never a great feeling to think about where you need to improve, it is the best way to keep your business on track in terms of growth and profitability.
Why is Competitor Analysis Important?
Analyzing the competition is crucial to not only maintaining but growing your business. A robust competitor analysis will provide you with benchmarks, help determine what sets you apart from the rest, and identify gaps that you can fill. Looking at the social media profiles and data from competitors will allow you to set benchmarks for your own business to strive towards. Understanding what sets you apart from your competition is something you can only find through competitive analysis, and any holes in your strategy can be identified very clearly through a SWOT analysis.
The frequency of a competitor analysis depends on the industry, but it is best to do this task somewhere between once per quarter and once per year. The process of this analysis may appear straightforward, but is not a task to take lightly. Keeping customers requires constant analysis and optimization to determine if you are bringing the best business to your audience. The information that comes out of an analysis such as this can truly provide you with what you need to outdo your competitors in a substantial way.
How to do a Competitor Analysis
Performing a competitor analysis requires certain information to allow for a proper evaluation. Identifying relevant factors such as competitor types, and their strengths and weaknesses in product/service offerings, branding strategies, marketing approaches, technological advancements, and target customer segments is all essential to execute this task effectively.
A well-rounded understanding of these elements will enable you to make informed decisions and point your business in the right direction. Whether you tackle this project alone, or with a trusted partner, be sure to document each step to allow for replication and tracking in the future.
Pro Tip
Focus on what your perceived competitors are offering, their target market, and their scale for a fruitful and productive analysis!
Find your Competitors
The first step in a competitive analysis is to understand the type of competitors to include. A direct competitor offers the same or similar product or service as your company. On the other hand, an indirect competitor offers a product or service that is seen as an alternative to yours.
For a more comprehensive approach, you can consider including historic, potential, substitute, global, and new market competitors. Analyzing how a historic competitor either rose or fell (or both) can help you with your own journey. A global competitor may show you new ideas to incorporate into your business model or marketing strategies that may not yet be used in your country or region.
SWOT Analysis
Analyzing the competition is most commonly done through a SWOT analysis. The SWOT method allows you to learn about the Strengths and Weaknesses of your business and the Opportunities and Threats in the market. First, be sure to define the objective of the analysis. Stating the purpose and what actions it will allow you to take will assist you in performing your SWOT analysis accurately.
Next, identify the internal strengths and weaknesses of your company. This may include capabilities, resources like staffing, or even your reputation within the industry. Next, identify the external opportunities and threats surrounding your business. Market trends, competitors’ actions, and the current state of the economy could all be included in this assessment.
Now organize the strengths, weaknesses, opportunities and threats all into a SWOT matrix. Visually analyzing these patterns and information will allow you to find the most important opportunities and threats facing your company, and how to use your strengths and weaknesses to tackle them.
Lastly, you will need to compare yourself to the competitors, analyze, and take note of specific actions that can be taken to address those opportunities and weaknesses. Do not forget to take the end consumer into consideration here, taking the time to understand their needs and what they respond well to. Be sure to continuously re-visit your SWOT matrix and revise it as the market, economy, and overall situation changes for your business.
Check their Online Presence
Online presence is a large piece of the puzzle that is marketing. No matter how innovative your product may be, or how genuinely helpful your services are, you may not reach your full potential if your marketing strategy is lacking. The online presence of your business compared to others may be one of the key factors in a customer’s buying decision.
The online presence of your competitors will further provide you with either confirmation or motivation to continue or upgrade your own online presence, respectively. Aesthetics, language, reviews, social engagement, and more contribute to the online presence of your competition. Their online presence can either grab or lose audience attention, just like yours can, so do not fear a competitor’s strong online presence. Simply make the appropriate changes on your end based on the information you’ve gathered.
SEO Strategy
SEO (Search Engine Optimization) is the use of certain methods to place your website on a higher ranking than your competitors in search engines. SEO simply provides the search engines with key terms based on search volume and keyword difficulty to move you up the rankings. Key to any competitor analysis is an analysis on your competitors’ SEO practices. While this is best done by an SEO expert, there are certain pieces you must have to do this analysis properly.
Identify your SEO competitors either by SERP (Search Engine Results Page) or a SEO tool – which an expert would have access to. Then, run a keyword gap analysis. This will allow you to find keywords that your competitors are ranking for that you may not be. Thirdly, evaluate the SERP for user intent: are they looking for a solution, product, service, or simply the answer to a question? Next, analyze your competitors’ content and find ways to improve on it. Lastly, complete a competitor backlink analysis, using the right tools.
Website Design
If it is not clear yet, appearances play a large role in the success of your business. Outside of reputation, your website and its design also provide potential customers with a “feeling” about your business. On average, people spend 54 seconds on a website. That gives you less than one minute to make a great first impression. The best way to determine if your website is performing well (aside from metrics) would be to compare it to your competitors’ websites.
Analyzing the website design of your competitors’ means looking for up-to-date aesthetics, functionality, structure, user interface, and content. Create a document or folders and compile the information you observe on these categories to better assess which parts of each competitor’s website you find helpful and which parts you should avoid replicating. Do they approach their customers with a sales-oriented, solution-focused, or a unique approach? Take note of the “feeling” you get on their website, their brand, and how they have organized their website for their customers.
Analyze Your Competition to Stay Ahead of the Game
There are so many strategies and nuances in the world of business but one action that can help you determine where you fall on the scale is a competitor analysis. Diving into your strengths and weaknesses along with the opportunities and threats of the market can truly guide you in your business development.
Many aspects of this competitive analysis can be done with no prior knowledge of the task but the majority of pieces require help from experts – that is where inSegment can help. Our SEO experts, web design professionals, and content gurus can guide you through a competitive analysis, allowing you to fully grasp your position in the market, and make recommendations on improving this position.
