How to Conduct Competitive Analysis to Improve Marketing Performance
How to Conduct Competitive Analysis to Improve Marketing Performance
Why Competitive Analysis Improves Marketing Performance:
If you want to become a top player in your industry, you’ll have to understand the dynamics of today’s marketplace. Your marketing performance can be significantly improved if you manage to acknowledge and understand the mindset and strategies of your competitors. Remember, digital marketing is a zero-sum game.
A competitive analysis process allows you to identify and measure your direct competitors’ strengths and weaknesses, helps you clarify what issues still remain to be fixed, and increases the accuracy and efficiency of your optimization solutions.
In today’s post, I’ll share some innovative strategies, tips, and suggestions on how to effectively analyze your niche market, identify your competitor’s strategies, and uncover new opportunities by researching the smart way.
Step 1: Develop a Market Research Roadmap
You can research the market in many ways, though some tactics are more effective than others. Surveys and focus groups are one of the primary ways to start. While a professional company would save most of your problems and save you enough time, it can get quite expensive.
If hiring a specialized company isn’t an option, you should consider performing the research on your own. Will it take time? Yes. Will it benefit your business? Of course. Is it worth it? That’s your call. There are many online voice of customer tools available that make this process much more straight forward than conducting off-line customer research.
The first step of the process (market research) consists in finding answers to a certain number of important questions.
Here’s what you should be looking after:
- Who are my top five direct competitors?
- How am I able to compete?
- What type of services and products do they offer?
- Are they specifically trying to satisfy specific niche markets?
- Do my competitors make enough profits? This is subjective, depending on your own standards.
- How’s their business doing? Are they growing and expanding? Are they stagnating?
- When did they enter the marketplace? How old are the companies?
- What do your customers like/enjoy/love about your competitors?
- What do your customers dislike/hate about your competitors?
- How do your customers perceive your brand compared to the competition?
- How does my company stand out from the crowd? What is the UVP (unique value proposition)?
- What are my competitors’ competitive advantages? Are there any? If so, which?
- What’s their promotional strategy? (aggressive, slow, bold, impactful)
- What’s their branding strategy? (mission, purpose, tagline, brand personality)
- What are their prices? Are they justified?
- Where do they hold their operations? Do you compete in the same geographic area?
- What’s their business size? What about the revenues?
- What’s the total sales volume in the last year?
What’s the purpose of these questions?
Well, once you answer them, you’ll be able to make firm decisions based on real intelligence. After all, optimizing your business performance is a matter of smart decisions, decisions that’ll lead to great consequences in the long run.
If you already have an email list or a list of clients who are willing to take your questionnaire, make sure you gather as much information as you possibly can. If you’re just starting, you’ll have to invest more time, attention, and budget to generate targeted responses from targeted potential customers.
Step 2: Gather the Information
Tapping into secondary sources of information such as books, published industry journals, marketing reports, and survey platforms will help you gather many responses to the pressing questions you must answer. Even though their initial purpose was different, they represent excellent sources of information for anyone who seeks to scout their competitors.
Here are some great places and solutions that’ll provide important information about your competitors:
The copy your competitors are using will tell you exactly what you need to know about their marketing and advertising strategy. Nowadays, every company owns a website and has a social media presence. Make sure you start searching on Google and Facebook. Use tools to speed up the process.
When you inspect your competitor’s website, social pages, or products.
Make sure you look after:
- The publication date of the advertisement
- The frequency of advertising
- The benefits of the product/service
- The features of the product/service
- The tone of voice in the copy
- The design of the copy (the color, the shape, the utility)
- The consistency of their content marketing
If the company’s using cheap writing services to develop their copy, you can immediately understand their commitment to be professional. On the other hand, a well-organized copy that creates an emotional impact is a good sign that your competitors know what they’re doing.
If one or more competitors are using sales brochures, make sure you study them well. You can find a wealth of information such as their main promised benefits, their unique value proposition, and their marketing approach.
Looking for external product and service reviews is another great way to gather precise information about your competitors. If they’re selling on marketplaces like Amazon or eBay, you should find enough information about what people enjoyed and disliked about their end products.
If they’re selling on their own site, you can perform an advanced Google search – “[brandname] review”. Use the quotation mark to get even more specific results. Another way to gather information is to ask around niche forums. Simply create a thread and ask if any user has any type of experience with the brands you’re researching.
In case your competing with publicly-held companies, you can find insightful reports by searching the SEC-Edgar website. With a simple company name search, you can get access to precious information such as revenues, sales volumes, net profits, and total market share.
To find out the subtler information such as the way they treat their customers, the quality of their products or services, and the impression they leave customers with, you should become their direct customer.
Purchase their products and study them well. If they have a store, simply visit it and check out the stock they display, the way they display it, the smell of the room, the vibe that it sends, and the placement of products on the shelves.
You can also call their customer support service and ask various questions to see how they react. If you have a bad experience with them, you already know what your focus point should be in the future.
Leverage Digital Marketing Tools
To improve your online reputation and results, you should consider gathering data about your competition as soon as possible.
With the use of professional software, you can collect necessary information such as your competitors’ social media performance, SEO performance, or content marketing performance. Here’s a list of the best tools you can leverage to perform an online competitive analysis.
Step 3: Analyze the Information
Once you’ve gathered information from various sources, it’s time to analyze it properly.
Start by listing the product features and benefits of each competitor. You should create a table that illustrates them in order, a table that allows you to compare the benefits and features that they offer.
Continue by check marking which of your competitors has which benefits. Then check for features. In the end, you’ll be able to compare your own business with five other highly-related businesses.
Next, evaluate how you stand in front of your competitors. How do your products and services compare to your strongest competitor? What are the features and benefits you’re lacking, and which are the ones you have? If you can overstep their benefits, your market position will be stronger.
Continue with the pricing structure. Every business’ costs will influence their price. If your competitors offer overpriced products, it means that they’re doing well. If their price has suddenly dropped, they could be either selling a limited number of products or they might be trying to capture attention and seize a different market position.
When you perform your research on your competitors’ products and services, make sure you don’t skip the additional costs such as shipping, installation fees, and extra warranty.
Every one of your competitors has a goal and a strategy to attain it. Your task is to identify both the market objective and the strategy employed. Seek to answer the following questions.
Are your competitors trying to:
- Increase or maintain market share?
- Introduce new products that will revolutionize the market?
- Establish themselves as absolute market leaders?
- Maximize their long-term profits or short-term profits?
- Increase the demand for a new market?
After figuring out their objectives, identify what strategies they’re using.
Some of the possible tactics that your direct competitors might be leveraging are:
- Different type of advertising (offline instead of online)
- Advertising more frequently, in more online places
- Partnering with or buying another direct competitor
- Improving the quality of the products/services through different innovations
When you understand the strategies that your competitive peers are using, you’ll be able to “counter-attack” in a unique way, letting your market know that you’ve done your homework and that you’re ready to solve important issues that nobody else can.
The last part of the process is to identify your competitors’ strengths and weaknesses based on everything that you have learned up until this moment. Mark them down and compare your business and marketing strategies with them.
Step 4: Determine Your Market Position
You should now have everything you need to establish your brand’s position in the marketplace. By now, you should know whether you’re a new player, a promising follower, or one of the top players in your niche. By understanding your competitive position and knowing a lot of details about your competitors.
Proceed with the following actions:
- Identify and measure your unique value proposition and your key competitive disadvantages. Classify your product’s quality in comparison with the rest and make comments on the competition’s products.
- Establish the main issues that your company is facing, and brainstorm solutions based on the information you’ve gathered (distribution coverage, price reductions/revisions, market position, market penetration, etc.)
- Integrate all the relevant information you’ve gained by analyzing your competition with the demographic (target audience) information and create a successful marketing campaign that’ll boost your business performance, market position, and brand reputation.
Whether you’re running a small business or a large corporate agency, performing competitive analysis on a regular basis will allow you to strengthen your market position, understand your target audience better, and increase your competitive advantage whenever you please. Take our strategies, tips, and tricks into consideration and watch your marketing performance grow!