It takes five to seven impressions before people start remembering your brand. Unfortunately, people won’t remember you if you don’t stand out. If you look like any other business in the industry, you’ll fail to generate leads.
Before you start marketing, it helps to perform a competitor analysis. You can learn more about your competitors and make your business stand out. Your competitor analysis can impact various marketing strategies you create in the future.
What exactly is a competitor analysis, and how can it benefit your business?
Keep reading to find out! In this guide, we’ll review everything you need to know. Then, you can learn how to run a small business without letting competitors slow you down.
Get started with this helpful guide today!
What is a Competitor Analysis?
First, let’s answer the question that’s likely on your mind: what is a competitor analysis?
An analysis allows you to evaluate competing companies within your niche. You can use an analysis to learn more about:
- Marketing strategies
In order to develop a useful analysis, you’ll need to select the right competitors to research. You’ll also need to determine what aspects of their business impact yours. It’s important to determine where to look, too.
Then, you can use the data you gather to make improvements to your own business.
Who Benefits from a Competitor Analysis?
A competitor analysis can help:
- Business owners
- Startup founders
- Product managers
- Sales teams
An analysis can help you pinpoint strengths and weaknesses. Then, you can find opportunities to grow. Every member of your team can benefit from using this analysis.
When done correctly, an analysis can give you the qualitative and quantitative data you need to make important business decisions.
For example, your analysis can help you develop your unique value proposition. Your unique value can set you apart from other businesses in your niche. You can’t determine your unique value if you don’t know your competitors, though.
An analysis can also help you:
- Prioritize product development by determining what aspects of a competitor’s product your competitors love most
- Improve your product by recognizing what features customers complain about with competitor products
- Determine which benchmarks to measure your own growth against
- Determine market segments your competitors haven’t reach yet
- Create a new product category by pinpointing gaps in the industry
About 60% of consumers would prefer to purchase from familiar brands. If you can’t make your business stand out, people won’t recognize you from the rest. You’ll struggle to generate brand awareness, recognition, or loyalty.
Generating brand loyalty can set your business up for long-term growth. In fact, a 2% increase in customer retention can lower costs by as much as 10%.
Loyalty is sometimes worth 10 times as much as a single purchase, too.
How to Conduct a Competitor Analysis
Before you start conducting your competitor analysis, ask yourself:
- Who are my competitors?
- What products/services are my competitors selling?
- What marketing strategies have they used in the past?
- Are they using the same strategy?
- How competitive are they?
- What advertising do they use?
- How much market share do they have?
- How big of a threat are they?
- What strengths and weaknesses do they have?
- How does their marketing strategy affect my business?
You can work through the following steps to answer these questions.
Identify Your Target Audience
First, take a moment to determine who you’re trying to reach. Who has an interest in your product or service? You can identify your target audience based on psychographics and demographics:
- Pain points
- Buying behaviors
- Household income
Once you determine who your customers are, consider their buying behaviors. Who are they shopping from? Which businesses fall within your niche?
Identify Your Competitors
In order to complete your competitor analysis, you’ll need to know who your competitors are, first. You can split your competitors into three categories:
Direct competitors operate in the same geographic area that you do. They offer a product or service that’s similar to yours.
Indirect competitors offer a similar product that solves the same product yours does. However, their product might seem different than yours.
Replacement competitors offer a different product or service than yours. However, customers might still choose the competitor’s product instead.
Create an Excel spreadsheet to list your competitors. You can use a Google search to research people who offer your product or service.
Analyze Market Positioning
Once you determine who your competitors are, consider their market positioning. How are they perceived by customers?
At this point, you’ll need to consider their marketing strategies, price points, and marketing channels.
Look at how they communicate with customers. Check out their website and copy. Determine if they’re using an omnichannel approach, too.
Examine Content and Social Media
You can also learn more about your competitors by looking at their marketing strategies. Check out their website. Do they have a blog?
What kind of content do they create? You might find some businesses prioritize white papers, videos, and email newsletters. Are people engaging with their content?
Learning more about their content marketing strategy will help you determine how they generate leads. Then, identify strengths and weaknesses in their strategy.
You can use what you learn to create a successful digital PR strategy to help your business stand out, too.
Don’t forget to consider the level of engagement your competitors generate. For example:
- What topics do their customers engage with?
- Which pieces of content generate the most engagement?
- Which topics do people share with others?
- Are the comments positive or negative?
- Do your competitors comment back?
- What hashtags do they use on social media?
Determining their engagement can help you find opportunities for your own marketing strategies.
Complete a SWOT Analysis
Finally, you’ll need to complete a SWOT analysis.
Identify each competitor’s strengths and weaknesses. Then, you can find opportunities in the industry. You can also protect yourself from potential threats down the road.
Conducting a Competitor Analysis: Your Guide to Standing Out From the Crowd
Conducting a competitor analysis can help you find opportunities for growth. With these tips, you can learn how to run a small business successfully. You can improve your marketing strategies and reach more customers than your competitors.
Set yourself apart in the industry with these tips today.
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