How often do you perform a competitive analysis for your brand?
If the answer is “not often” or “never,” your business is missing out on valuable insights.
About 90 percent of Fortune 500 companies practice some form of competitive analysis regularly.
A competitive analysis is essentially a strategy where you identify your competitors and research their products/services, sales and marketing strategies. Of course, your analysis can be as simple or as complex as you need to satisfy your goals behind it.
For example, perhaps you’re only interested in how your competitors are approaching the overall design and usability of their websites. Or, you want to evaluate a more broad look at their overall digital marketing strategies.
It all depends on what you’re hoping to discover with each analysis.
Researching your competition can help you:
- Discover new trends
- Anticipate shifts in the market
- Find successful tactics
- Stay on the cutting edge within your industry
A true (and effective) competitive analysis is more than just surfing the social media accounts of your competition and subscribing to their email lists. The following are seven recommended steps you can take to start your first competitive analysis as it relates to marketing specifically.
Step #1: Identify your competitors
You likely are already aware of your top two or three competitors. But if you’re struggling to fill out a list of six to 12 for the most effective sampling in your competitive analysis, consider searching on Google, Amazon and/or even Alexa for products or services that are similar to yours.
Just make sure that the competitors you choose:
- Have a similar business premise
- Sell similar products or services
- Target similar audience demographics
- Range from well-established brands to newcomers in the market
- Are within a relevant geographical location as you (if you are a hyper-local business)
The more similar you can find, the more relevant your analysis will be.
Once you’ve identified your competitors, label them either “direct” or “indirect,” where direct competitors offer a product or service that could pass as a similar substitute (like Coca-Cola and Pepsi) and indirect competitors offer products that are not the same but could satisfy the same customer need or solve the same problem (like Walmart and GNC).
This will help you weigh the insights and data you gather in your analysis. While direct competitors are a higher priority, you can still learn a ton from your indirect competitors as well.
Step #2: Create a spreadsheet
Documentation is a must but can be organized in a very customized way, depending on your preferences. There are various tools and templates available online that can help get you started.
However, key pieces of information about your competitors that could include are:
- Target customers
- Main “claim to fame” (or market differentiator)
- Key features or benefits of their products/services
- Price points for their products/services
- Website features, which include the design, layout, search tools, imagery and so on
- Customer experience features, including how customers can check out, overall customer support, any mobile apps and so on
- Social media approach, such as the platforms used, posting frequency, overall engagement
- Content marketing tactics, such as blog and/or vlog topics, content types and so on
- Overall marketing tactics, such as the types of promotions being run, types of discounts (and their frequency) and so on
- Customer reviews
Again, every competitive analysis can be different, depending on your goal. If certain information is simply not relevant, leave it out.
Step #3: Determine exactly what your competitors offer and at what price
It’s important to understand the range of what is offered by your competitors and at what price (and discount).
During your research, be sure to ask:
- What is their market share?
- Are they pricing differently for online versus brick-and-mortar?
- How are products and/or services distributed?
Because discounts can be at the heart of many marketing campaigns, do your best to nail down how often your competitor runs sales and how much is discounted. On the flip side, rather than a discount, perhaps perks are thrown in from time to time. Either way, it helps to understand the different promos being offered to your potential customers.
Step #4: Evaluate your competition’s overall marketing efforts
Auditing the websites and social media profiles of your competitors is one of the best ways to understand the scope of their marketing efforts.
Questions you should be asking:
- Do they publish a blog?
- Do they post videos or webinars?
- Are they offering premium content, such as whitepapers or eBooks?
- Do they have a podcast?
- What sort of visuals are they using? Stock photos? Infographics? Custom content? Something else?
- Do they have a FAQ section?
- What about a media kit or case studies?
- Any online or offline advertising campaigns running?
- What social media platforms are they using?
- How are they using social media? Are there different tactics being used on different platforms?
- How big are their social media followings?
- Are they responsive on social media?
- What coordinated campaigns can you find?
The more you can understand the scope of their marketing practices, the better. But keep in mind that you’ll never have an “insider perspective” of the overall strategy. However, the benefit of being the outsider is that you’re likely only able to find what any other potential customer can find, and that’s incredibly relevant.
Step #5: Dig deeper into your competitors’ content strategy
Content is like the lifeblood of a marketing strategy. Your competitor could be posting a new video every day, but if the quality is lacking, it’s simply not as impactful as it could be.
Take note of:
- How accurate the content is
- Any visible bylines (and whether those appear to be in-house or from contributors)
- Whether spelling or grammar errors can be found
- How in-depth the content is
- Any internal or external links being used
- Any images that are engaging or eye-catching
- Whether you can identify a singular tone that’s being used. If so, what is it?
- If content is readable and/or skimmable (easy to digest)
- Specific keywords being used and how
Step #6: Understand the level of engagement visible on your competition’s content
By getting a sense of the average number of comments, shares and likes (or reactions) on your competition’s content, you’ll see if:
- Users respond better to certain topics
- The engagement actions are positive, negative or a mix
- Certain calls-to-action work better than others
- The images used help drive engagement
Of course, this research will largely focus on social media platforms, but be sure to check all published content for comment threads and the like.
Step #7: Round out your competitive analysis with a SWOT analysis concurrently
Yes, this basically means you’re doing two analyses at once. But don’t worry. A SWOT analysis is nothing more than a simplified look at your competitor’s strengths, weaknesses, opportunities and threats.
In essence, your competitive analysis will result in SWOT takeaways.
Questions to ask:
- What is your competitor doing well? Any advantages over your brand?
- Where is the weakest area for your competitor? What advantage does your brand have over the competitor?
- What could your competitor do better with?
- In what areas is your competitor a threat?
You can keep this SWOT strictly to marketing strategies or expand to your businesses at large. But the takeaways are something that you can then easily incorporate into your own digital marketing strategy moving forward.
See our Digital Marketing 101 to-do checklist that will help your business.
A proper competitive analysis can take significant time and effort, but the payoff is worthwhile. You’ll gain insights into your competition that can benefit your small business in its digital marketing efforts and so much more.
Once you’ve executed your first competitive analysis, consider leveling up your digital marketing with DailyStory. Features include automating various marketing tasks, dynamic audience segmentations and more. Schedule your free demo with us today.