Competitor Analysis Best Practices
Updated: Dec 16, 2019
In the battle for your customer’s attention and wallets, being on top of the game is a must. And what better way to stay on top of what you have to do than by knowing what your competitors are up to.
Competitor research and analysis are a cornerstone of any marketing plan and play a huge role in shaping your brand’s direction for the foreseeable future (or quarter).
What is a competitive analysis?
A competitive analysis is a deep dive on your major competitors where you research their products, sales and marketing strategies. You then use this information to determine how you can differentiate yourself by offering a more unique proposition to potential customers.
Using a competitive analysis allows you to better understand the inner workings of your competition - allowing you to see what they are doing well and understanding where they fall short. These data then lets you plan your own strategy with a better understanding of your target market as a whole.
So what are some best practices when conducting your competitor analysis that goes beyond just a basic google search and content review?
Find your competitors
The first step is to actually find and determine who your competitors are. Use platforms like Google search or Amazon and play around with keywords.
Search for specific products, your company name as well as general industry terms and note down what products and organizations pop up that could be remotely associated to your business.
You can also search by hashtag on Instagram or Pinterest to see what the landscape for your offerings are on these platforms.
Categorize your competitors
Breaking down potential competitors into more focused categories can help with building a competitor hierarchy. This is important so you are able to identify direct competitors as well as businesses that don’t directly compete currently but could if they decided to change direction.
The following breakdown could be used:
Primary Competitition: Your main competitors - they are selling a similar product to your target demographic.
Secondary Competition: These are businesses that may be selling knock-offs or cheaper versions of your product on the mass market. These businesses are likely selling these products to a different target audience but their product offering is similar.
Tertiary Competition: You can look at tertiary competitors as businesses that may be connecting to your businesses somewhere along the supply chain. For instance, if you sell phone skins a tertiary competitor could be a potential future partner - such as a company that produces 3M film.
Do a deep-dive on their website
Taking a close look at competitor websites will help you get a feel for their customer experience and site design. It’s important to look at the following items though the list is not extensive:
Are they using high quality photographs? If so, what is their presentation layout?
Do they have detailed, informative product descriptions?
How fast does the page load?
Is their site mobile-friendly?
What is the flow of call-to-actions on their page?
Do they offer a newsletter, sign-up discount or any other tools to build an email list?
Do they have an active blog? What is their posting frequency and engagement?
Do they use a chat bot?
While every website will be different with different strengths and weaknesses, it will help you determine how your competitors shape their online user experience. You can then shape your own website accordingly.
Audit their social media channels
Reviewing your competitor's social media channels gives you an overview of their content as well as engagement rates, brand tone and customer interactions.
As you go through their posts it’s good to see if they check the following boxes:
Do they have a strong overall presence?
Do they post frequently?
What voice do they use when interacting with their customers?
How quickly do they respond to customer messages?
What type of content do they post?
It may also be worth looking at alternative social media or finding niche groups on specific social sites. If researching a competitor that sells car seats, it would be good to look at parenting forums or Facebook groups dedicated to car safety.
These alternative or niche communities could lead to specific insights that aren’t necessarily apparent on a business’ generic account.
Determine your competitor’s unique selling proposition
Once you’ve done significant research into what your competitors offer it’s time to determine their unique selling proposition (USP) and see how it lines up against yours.
Their USP is what helps differentiate them as a standalone brand and encompasses everything from branding to customer experience as a whole.
Understanding this is key to creating your marketing plan since you’ll need to find creative ways to differentiate yourself against close competitors. Adapting your USP to include the best of what your competitor offers and more can lead to greater sales and greater brand loyalty. Consumers want what’s the greatest and coolest new offering, so you should aim to provide that.
Keep your eyes on reviews
Reviews give a sense of how a brand or product is generally viewed by your consumers.
Using Yelp or Google reviews is a good start however it’s good to also look up competitor exposure on social media, forums, subreddits, youtube videos and through expert reviews.
Many consumers look up online reviews for products before making a purchase which makes these reviews a good gauge for how well a product may be selling. This can inform your decisions on whether continuing to sell a particular product is worthwhile or would it be time for you to look at new, more exciting product offerings.
Competitor reviews also help you identity points of improvement that could help differentiate yourself overall.
Competitor analysis is an ongoing process. By following a few best practices and creating an efficient monitoring system it is possible to always have a leg up on your competition. Through a good competitor analysis you can identify pain points to improve on, how to differentiate yourself from the pack and avoiding making the same mistakes as your peers.