Are you wondering how to get a leg up on the competition? Conducting a competitor analysis is one of the best ways to do just that!
Taking an in-depth look at what your competitors are doing, helps you identify areas where they're excelling and figure out how to improve upon them yourself. And this blog post will explore the basics of a competitor analysis and how to use it to your advantage.
What is competitor analysis?
Competitor analysis helps you identify, analyse and compare your competitors' strategies to gain insight into their strengths and weaknesses. It allows you to assess how well your competitors are doing in terms of marketing, product development, pricing, customer service and more. Not only does this help you understand what is working for them and what isn't, but it can also give you ideas on how to better position your business in the market.
Keeping one step ahead of your competitors is important. One way to do that is by conducting a proper competitive analysis since it will provide suggestions on building a more successful business and information on how to outmatch their efforts.
Different types of competitors
When it comes to competitors, businesses can be faced with many different kinds. The main players in a given industry are those who offer similar products and services at comparable pricing.
These primary competitors are often serious threats to a business as they may have a larger customer base, more resources or even better technology. Then there's the secondary competition that offers alternative solutions that could be more appealing to the customer.
Lastly, there are the indirect competitors who offer a product or service which fulfils the same purpose but is different in some way. For example, a company selling peanut butter could have an indirect competitor selling almond butter.
How to properly conduct a competitor analysis?
Each digital marketing strategy must include competitor analysis, so here are some techniques to carry it out successfully:
- Step 1. Define your competitors. To start, you must first identify your competitors and their products since investigating their web presence and identifying their target market are necessary for this.
- Step 2. Analyse their digital presence. It's time to evaluate your competitors' online presence once you've established who they are. Start by examining their website layout, social media presence, content marketing initiatives, and other areas of activity will help you with this.
- Step 3. Monitor their performance. As you study your rivals, watch how they perform by assesing the results of their marketing initiatives and any changes they have made to remain competitive.
- Step 4. Create a strategy. It's time to formulate a strategy that would make you stand out after analysing your rivals. Think about your advantages and disadvantages and pinpoint your growth opportunities to outperform the competitors.
- Step 5. Track your progress. Finally, keep an eye on your growth in comparison to your competitors to make sure you are maintaining an advantage. Determine whether any changes they make to your plan are still effective before implementing them.
Benefits of conducting a competitor analysis
Doing a competition analysis has a number of important advantages, including:
- Identifying potential threats or opportunities. Any potential threats or opportunities that may present themselves in the near future, such as the release of new goods or services, can be found through competition analysis. By knowing about them beforehand, you may create tactics to combat them.
- Uncovering new positioning opportunities. You can find any holes in the market that your goods or services can fill by conducting a competitor study. Through concentrating on a niche market, you can create unique value propositions and get an edge over your competitors.
- Keeping track of your competitors' strategies. A competitor analysis can help you to stay up-to-date with the latest industry trends and keep on top of your competitors' strategies, which will ensure that you are always one step ahead and can adjust your own strategy accordingly if needed.
- Improving marketing decisions. By understanding what works (and what doesn't) for your competitors, you can make more informed decisions about how to promote and market your own products or services. As a result, you will get the most from your advertising budget and maximise ROI.
Competitor analysis is a huge investment for your business's future. So taking the time to analyse competitors will help you uncover opportunities that you can capitalise on and make them more competitive players in the market. After all, knowledge is power – and when it comes to staying ahead of the competition, it's better to be informed than ignorant.