Competitor Analysis Example: How to Differ in a Crowded Market
Competitor analysis in marketing is not a new concept and has been used by marketers for years to gain valuable insights into how businesses compete and what they need to improve. In the past, competitor analysis meant digging up old newspaper clippings, important events, and — sometimes — even hiring a private detective! Nowadays, it has become much easier with the implementation of various tools that are readily available online.
These tools analyze a site's backlink profile, code quality, social media activity, as well as other metrics in order to decide whether there are significant strengths and weaknesses that should be taken into account when creating a site and developing a marketing strategy. We've come a long way in the last few years and are now able to analyze competitors in greater detail than ever before.
What is Competitor Analysis, and Why Does It Matter?
The competition is fierce in today's markets. In order to be heard, you need to be seen. Any business that wants to make money should not stand still. It should always be thinking about growth, gaining market share, and trying to stand out.
If you want to succeed in business, the first step is to know your competition so that you can surpass their successes. This may seem overly simple, but it's not. Knowing your competitors doesn't mean watching what they do and then simply copying it.
So, what exactly does competitor analysis mean?
It's a way to identify your competitors and analyze their strategies and opportunities to gain insights into your own business. By knowing who your main competitors are and what they are doing right, you help your business stand out from the crowd. Competitor analysis in marketing involves identifying both external and internal factors such as products, services, distribution channels, and pricing strategies.
Why do businesses, along with startup owners, product managers, and marketers spend their hard-earned time researching competitors?
Competitor analysis matters because it’s like a roadmap that guides us through the business journey. It provides us with a better understanding of the world we live in and helps us focus on the tasks that are most important based on what the competition is doing. By understanding the competitive environment, you will be better situated to develop a competitive strategy that maximizes your strengths/advantages while minimizing your weaknesses/vulnerabilities.
Why Do It?
To develop your unique value proposition
If you have some semblance of a business, you have competition. Naturally, then, you need to know who these people are and why they are better than you. Differentiating yourself from the competition has more to do with your unique value proposition than the actual product or service itself. At the heart of every UVP is a benefit or group of benefits that hold the key to differentiating the business. This means what clients really value from your product/service is what makes you different from your competitors.
To find gaps in the marketing, personnel, and sales strategies
Competitor analysis includes investigating competitors’ marketing strategies, personnel hiring, sales strategies, advertising, and other activities. It helps us find out what we should improve and gives us the opportunity to learn from the best strategies.
What have they done well? What have they done poorly? By doing competitor analysis you'll be able to see what your competitors are doing well and what's not working for them — thus allowing you to make smarter business decisions by putting your competitor's strengths to work for you and avoiding their weaknesses and filling the gaps. This is how competitive analysis works!
Uncover market segments that aren’t fully served by competitors
Doing a competitor analysis is an excellent strategy for uncovering market segments that aren’t fully served by competitors and for better understanding product or service opportunities that don’t currently exist in the market. If you want to make your business more profitable it's crucial to look at how you can improve on competitors’ offers. You can identify what's lacking in other businesses' services or products and provide it to your user.
What to Include in a Competitor Analysis?
Identifying your competitors
When looking to enter a new market, it's important to ask yourself who your competitors are. Are they established, or just starting out? Do they have competitive advantages, such as wider name recognition, a bigger budget, or access to customers through additional channels of distribution?
The first step is to identify who you're working against — that is, the companies that are selling the same or similar products or services to yours. There are marketing tools like SE Ranking that help to find your online competitors and analyze their promotional efforts (we will get into detail later in the article). You can then research what they are doing, how they are getting found by their customers, and how you can beat them.
These can be direct competitors, indirect competitors, and potential competitors that can show you how newbies might affect your business. Direct competitors are companies that offer exactly the same products/services as you do. Indirect competitors include companies that may not offer the same type of products/services as you but are linked in some way.
Product or Service analysis
A competitor analysis should give you more information about competitors’ products and services. Having a complete understanding of what you're offering customers compared to your competitors can highlight any weaknesses or opportunities that you can capitalize on.
An effective competitive analysis includes information about the company and its products/services, as well as what it charges for them and how much money it has. This allows you to compare the value of your solution with that of your competitors.
Moreover, you need to go beyond simply examining competitor prices and other key figures. While these aspects are important, you should also examine the product's quality, inputs and changes over time, and the overall offering. You may also consider how long it will take your business to gain a competitive edge.
If you're doing a competitor analysis, it would also be good to ask yourself some other questions like what are the competitors' business models? How old is the target audience for the business they run? What current technology are they using to build it?
The most critical part of any competitor analysis is the research of competitors' marketing tactics. This will help you determine what drives their traffic and how they’re planning to reach customers. You'll get off to a good start by looking at their website traffic analysis. The two most popular ways to get website traffic are SEO (organic traffic) and advertising (paid traffic).
Paid ads: You can get this type of traffic only if you create a campaign, include relevant keywords, and pay for it. The most popular platform for advertising is probably Google Ads which provides direct access to your website via the search engine when consumers are searching for products or services that are related to your business.
Organic traffic: These are visitors who come to your website from organic (unpaid) search results. This is the most cost-effective type of traffic but your website needs to be relevant and optimized for what users are searching for in search engines like Google.
Since the analysis of competitors’ paid ads and organic traffic can give you a clear view of their strategies for reaching the target audience, you should find a solid approach to understand what exactly your rivals are doing. The easiest way to find out is to use marketing tools like SE Ranking competitor checker which simplifies this process tenfold.
You can start by entering your domain into the tool, and get a list of your organic and paid competitors. This will be your start point. Then, separately check each of the main rivals–how they approach SEO and paid advertising.
Source: SE Ranking Competitive Research
By entering a competitor’s domain, you get access to its analysis of organic and paid traffic. You will see data like estimated numbers of clicks per month, traffic cost, and its top-performing keywords themselves. There are two tabs – Organic Traffic Research and Paid Traffic Research – where you can get details into its SEO or Google Ads campaigns, including keywords, traffic pages, and top-performing ads.
Apart from anything else, it's important to have an in-depth understanding of how a competitor approaches the market, what their target audience is looking for, and to check the activities that each competitor engages in. Your competition will most likely depend on different partnerships with influencers and other partners. You should also be able to see what kind of content they publish, their pricing strategies, and how they promote their products or services.
To win the race to an anticipated market, it is important to first perform a competitor analysis before taking any steps. In the process of analyzing a competitor, it is essential to understand their corporate culture and their philosophy in business as this will let you know how similar or different your business is and what steps they’re about to take both products- and marketing-wise. Understanding their corporate culture and operations will also give you a good picture of what the future holds for them.
In addition, by knowing their organizational structure, you can get an understanding of their decision-making processes. This will help you in making strategic moves and decisions based on data collected from their competitors' approaches. Knowing when a competitor will potentially do something that affects your own business in a negative manner allows you to plan ahead and capitalize on those opportunities before anyone else does.
Customers & Awareness
When it comes to analyzing your competitors' business models and their strategies, you'll have to do some research. Talk to customers, find the voice of the brand and focus on the target audience. The analysis you'll conduct should be based on several factors, such as the value your competitor brings to its customers, how it differentiates itself from other brands in scope and product range, and how it builds brand awareness for its products.
The value that your competitors bring to their customers is a crucial aspect of your competitor analysis. Competitors are like a mini funnel that starts with the simple question: “who am I competing with?” You know your customers best, but it might be helpful to look at the point where people begin hearing about competitors and brands.
Moreover, it would be a great idea to find out what your customers know about your competitors and any negative aspects of the companies and their products. This can all be based on surveys and representations from your customers.
Competitive analysis Example
If you are just starting to work on a marketing startup and you want to know what the competition is like within your niche, it is always a great idea to carry out a competitive analysis so that you can forecast your competitors' success and surpass it. It can be divided into several steps:
Step 1: First of all, you need to make a list of specific keywords that you want your website to rank for and thoroughly investigate who your competitors are by typing those keywords in the search bar. Use marketing tools to find out more detailed information about all your competitors: direct, indirect, and potential ones.
Step 2: After that, you can use competitors’ websites or the SE Ranking platform to immerse yourself more deeply into their product/service, marketing strategies, traffic analysis, etc.
Step 3: Having analyzed all your top competitors, you can focus on your own business now. Carrying out a SWOT analysis will help you assess all your strengths and weaknesses.
Step 4: Finally, you can create a graph in order to visualize your received results and clearly see who your main competitors are, in what way your company needs to move, and what steps you should take.
This way, it will be much easier for you to come up with an effective strategy to achieve the desired result.
In short, competitor analysis is a popular and commonly used business strategy to gain a competitive edge in the marketplace. With it, you can define and analyze your competitors to gain a competitive advantage over them and also identify areas for improvement. It leads to an understanding of a competitor’s strengths, weaknesses, opportunities, and threats. Furthermore, comprehensive competitor analysis will give you an overview of your industry and help you gain valuable insight into how others are advancing their products and services.
A competitive analysis should be an informative report on your industry and competitors. It helps you define key competitors, understand where you stand within your niche, identify the strengths and weaknesses of your competitors, etc. It will also enable you to get a better sense of how your product or service compares to the competition, which in turn will help you focus on what needs to be done to make your business stand out. A competitive analysis is a great start in developing an effective marketing strategy that will bring you phenomenal success!
Guest Blogging Team
Опубликована։ Август 29, 2022
Последное обновление։ Декабрь 15, 2022