Be one step ahead with thorough competitor analysis — see where others are doing well, where they’re falling short, and identify opportunities for your business. Let’s jump in.
What is competitor analysis?
Competitor analysis is a crucial part of any business’ marketing strategy.
It involves identifying potential competitors, then studying, researching and comparing their strategies to your own. You can conduct a broad-scale analysis or focus on a single area of your competitor’s operations.
Whichever approach you take, a competitor analysis can help you understand the competitive landscape while providing the insights you need to create a successful marketing strategy.
Why you should analyse your competitors
Understand the market and what customers want
Competitor analysis helps you discover your business’ challenges and opportunities.
It allows you to be strategic in anticipating changes and reacting to new market trends or customer needs. Studying your competitors’ marketing strategy tells you about the customers they’re targeting, which channels they consider most important and how they differentiate themselves.
Comparing how different businesses operate allows you to build an overall picture of the marketplace. Monitoring trends and opportunities while identifying the customers other businesses are targeting helps you understand what your potential customers might look for.
Identify areas for improvement
Understanding your competitors’ strategies helps you to identify the strengths and weaknesses of different approaches, including your own.
Businesses within a sector may have different approaches to the same problem — and not all may be suitable for you. However, analysing the approaches other businesses are using could help you find opportunities for growth.
For example, suppose your analysis shows that a competitor heavily invests in paid search advertising when you’re focusing on organic search. In that case, you might decide to reallocate some budget to paid search.
You might also identify that a competitor’s engagement on social media is higher than yours, prompting you to rethink your approach to social media content.
Develop competitive strategies to boost sales
Understanding your competitors’ strategies doesn’t just allow you to identify weaknesses within your operations — it also helps you compete with them directly.
For example, your website competitor analysis might have identified that a competitor is targeting a specific type of customer, and you’ve found your own “lookalike” customers online. In that case, you might target the lookalike audience, boosting your sales by being present for search terms where others are absent.
To consider another scenario, if a competitor has recently launched a new product, you can observe their strategies. Were these successful? What would you do differently when launching a similar product? You can then use that analysis to develop your product launch strategies.
Stay up-to-date with industry trends
Keeping tabs on your competitors also means staying abreast of industry trends. For example, if a few of your competitors focus on a specific market segment, platform or channel, that tells you something is going on that you should probably be aware of.
You can see the overall market direction by tracking changes in your competitors’ strategies. You might look at how their priorities change year-to-year or quarter-to-quarter and how they respond to changing market conditions.
Learn from other business’ mistakes
Remember, just because a competitor uses a specific strategy, it doesn’t mean it’s a good idea.
You can watch out for errors and poor decisions among your competitors and learn from them. Once you’ve identified the mistake, whether it’s a poorly written LinkedIn post or flawed product launch, you can make sure you don’t make the same mistakes.
How to conduct a competitor analysis
1. Identify your primary competitors
You’ll likely have some idea who your competitors are, but businesses regularly launch new products and services, so the landscape is continuously changing.
Businesses usually optimise their content for search engines and use paid advertising to get in front of new audiences. Act as if you’re a customer searching for products or services, and you’ll likely see information and adverts from businesses offering those services. This allows you to identify competitors and see what type of content they’re producing.
You can also ask existing customers whether they had anyone else on their shortlist before purchasing from you. Once you identify your primary competitors, you can gather information about them.
2. Monitor their social media presence
Social media accounts allow businesses to react and proactively reach out to their audiences. By watching your competitors’ social media, you can identify more aspects of their marketing strategy, such as tone of voice, key messaging themes and how they engage with other businesses.
3. Assess their SEO strategy
SEO is a key aspect of digital marketing. A basic evaluation of SEO strategy is to look at the keywords your competitors’ websites rank highly for. Do you also want to rank highly for the same terms, or should you target different, less competitive keywords?
4. Purchase their products or services to understand the customer experience
Explore the customer experience by purchasing from your competitors. Are there any flaws in their checkout process? Are the product descriptions detailed? Look for any shortcomings that present an opportunity for you to improve your own processes.
Determining your competitive advantage
Once you've profiled your competitors’ strategies, use this information to determine and develop your competitive advantage.
For example, you might adapt successful aspects of competitors’ strategies for your business plan or identify potential challenges or hazards you need to be aware of.
Customer support
Understanding the customer journey and how customers interact with your competitors allows you to provide exceptional customer support.
If your competitors have a different approach to customer service, consider how you can use this to your advantage. For example, some businesses may offer real-time chat support, while others don’t offer any support on the weekends.
Pricing
By evaluating your pricing process and the range of price points other businesses use, you can ensure you price your products and services competitively while maximising profit.
For example, some competitors position themselves as the most affordable in the market to serve a subset of price-conscious customers. You can identify this positioning through the competitors' messaging, pricing and customer targeting.
If you’re looking to target the same customers, you can use this insight to revise your approach to pricing.
Products and services
Just because you’re competing with another business doesn’t mean you’re offering the same thing to the market.
For example, a large competitor may offer a wide range of products while you’re only competing with a specific segment. Or a service provider may compete with one of your services but not others.
By learning what products or services your competitors offer, you can identify areas of high and low competition. This allows you to adapt your offering to take advantage of under-serviced areas of the market while avoiding oversaturated ones.
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Disclaimer: Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.