“So, what are our competitors doing?”
You’re bound to hear this question in meetings with upper management, because leadership knows how important it is to stay ahead of their competition. It’s critical for driving innovation and sustaining success.
However, it’s not always easy to figure out how to do this. For instance, if you are expanding to new markets or new audiences, where do you begin? The goal is to develop the ability to predict their future actions and maintain a competitive advantage — to achieve this, you must pay close attention to your competitors’ actions. Although this sounds like a complex and arduous task, there are definitive aspects of a competitive analysis. In this piece, we dive into what a competitive analysis is, why you need it, and how to complete it in 10 steps.
What is A Competitive Analysis?
A competitive analysis is a system of discovering, assessing, and categorizing key competitors. Often this research is centered around competitors’ sales, product, and marketing strategies. By evaluating competitors in relation to your business, you can identify your weaknesses and determine ways to improve. The better you understand your competitors, the better chance you’ll have of developing an edge over them.
Getting the most out of a competitive analysis starts with choosing the right competitors to analyze. Beyond that, you’ll want to know which parts of your competitors’ business you should focus on and understand where you can find useful data. Then you must use these discoveries to understand how to leverage your analysis to strengthen your business.
Competitive Analysis in Marketing?
Competitive analysis gives businesses qualitative and quantitative data to make more informed decisions. Performing a competitive analysis can help you gain market insights like the following:
- A better grasp on your unique value proposition that will help you refine your messaging to showcase the true benefits of your product or service over that of competitors.
- Benchmarks to measure growth, particularly in terms of social media and SEO
Deeply understanding how your competitors approach advertising and marketing strategy can help you enhance your own.
- A list of new market segments to tap into competitive analyses, which often uncover populations that could benefit from your product or service but aren’t being addressed by your competitors. This allows you to market to them first.
- Vocabulary to promote a new product category or product line. Reviews can reveal language that resonates with customers.
- New market trends to explore. With additional context into emerging trends, you can create more compelling and poignant ads that appeal to your prospective customers.
Why Perform a Competitive Analysis?
Do you tend to draw a blank when you sit down to write an email campaign or monthly newsletter? Ever wanted to mix up your pricing strategy, but weren’t sure where to start? Have you struggled to find your audience on a new social media platform?
All marketers face these quandaries, but good marketers know they must overcome them to build their company’s brand. A competitive analysis will surface the ways to stay ahead of your competitors and adapt quickly to emerging trends. By examining your competitors under a microscope, you can create more effective social media campaigns, content strategies, partnerships, messaging, and pricing models.
10 Steps to Perform a Competitive Analysis
While a competitive analysis can be exciting, it’s important to take your time and do extensive research. Below, we’ve outlined 10 steps to a comprehensive, actionable competitive analysis. Each step provides key tools, sites, processes, or techniques and offers the types of information or metrics you should collect.
1. Understanding Competitors
The key to a useful competitor analysis is to thoroughly understand your competitors. You may already have a list, but it’s best to begin by researching business names or products on sites like Google or Amazon. Keep track of all relevant competitors you find and identify the keywords they use on their website and landing pages. Type in each keyword on your list to make sure your search is exhaustive. Continue your research by looking through relevant online communities, review sites, and other tools like Ahrefs, Keyword Spy, ReferenceUSA, Hoovers, and even Alexa.
Once you’ve got a hefty list of competitors, start tracking basic information in a spreadsheet you can reference later. Note who their customers are, where they have office locations, how many employees they have, and how much they make on average each year. Pay attention to the products and services they offer, websites and social channels that they own, and other elements of their company history (for example, when the company went public). Remember, a competitor analysis isn’t static, so consider setting Google alerts for each of your competitors and for relevant industry keywords.
2. Categorize Your Competitors
Once you have a rough idea of who your competitors are, start categorizing them into levels. View direct competitors as “primary competitors.” You’ll be up against them in terms of product or audience, so tracking their behavior matters most. Next up are “secondary competitors,” who sell a higher or lower-end product or pursue a different audience. While you may not be monitoring them as closely as primary competitors, you’ll still want to be aware of the different ways they are reaching out to their audience and how they pitch their product to the world.
Last, but not least, come “tertiary competitors,” who have companies that are indirectly associated with yours. Following them will be useful when brainstorming ways to expand your suite of services or grow your product catalog. Additionally, tertiary competitors could become partners in the future. During this classification process, it helps to record the same basic facts about each competitor, such as their: name, product(s)/service(s), headquarters, revenue, mission statement, etc. This will ensure you are categorizing them properly.
3. Understanding Competing Products
Carefully study the way competitors exhibit their products on their website. Discern what details they share about the product, and find information that might be missing. In a similar vein, understand how they feature their product in action. Are there high-quality photos or videos on their site? Do they include testimonials or customer success stories.
Next, try to determine who their ideal customer is. Jump to reviews and testimonials to see if those have any hidden clues for product marketing and messaging. Outside of a competitors’ website, search for your competitors on Youtube to see if their CEO or other employees have given live demos, interviews, or speeches about their products. The event they’ve decided to speak at can reveal a lot about the audience they are speaking to. Surface old press releases and sign up for newsletters or ebooks to see what language they use when talking about their product. If a competitor uses sophisticated terminology, they may be going after a more technical customer.
Finally, order competitor products yourself to rate their quality. Note interesting observations about the way the product is delivered. Are there instructions or a brochure? Is it easy to set up? Exploring your competitors’ products will uncover who your competitors are going after and what features set their products apart. This gives you a leg up一you can develop a go-to-market strategy that accentuates your products’ strengths and emphasizes your competitors’ flaws.
4. Analyze Competitor Websites
Competitors’ websites are a goldmine for useful information. Start by finding their calls to action. CTAs can be found in marketing banners, callouts at the top of their site, ads, and landing pages. Ask yourself the following:
- Did you get to their website through an ad?
- Does their site appear at the top of search engine results?
- Were you immediately asked for your email address, or do they use a different type of landing page?
- Do they display social media icons and encourage people to visit those sites?
The answers to each of these questions can help identify your competitors’ positioning.
Poke around the rest of their site on your phone, tablet, and desktop as if you were a customer. Is their site optimized for each device? Would you know how to get in touch with support? Is there a chatbot? Maybe a Contact or FAQs section? Think about what you’d find useful as a consumer. Is there a blog that talks about the benefits of their products or services? Do they have an About page? Do they reference any competitors? Are any whitepapers or case studies available for you to download?
Try putting a product in your cart and leaving the page. Do you receive any emails? If so, when did you get them and were any discounts included? Are your competitors running any promotions? What are the benefits to the competitor and shopper? Use this in-depth website analysis to identify areas where your website can stand out from the crowd.
5. Understand Competitor Pricing Strategies
Pricing is always tricky, no matter what business you’re in. Examining how your competitors are pricing can help you formulate a more realistic pricing structure. First focus on products or services that are nearly identical to yours. Do they have a platform, usage, or one-time fee, or do they charge per hour or per month? And keep in mind, sometimes your products or services won’t match your competitors’ exactly, but try to scrutinize your competitors’ product lines and extra features to get as close to an apples-to-apples comparison as possible.
Some competitors will list pricing on their site, while others may force you to talk to a sales representative. If you have the time and resources, you might consider signing up for a demo or introductory call to get more information. You can also contact current clients or ex-clients about their experiences. When conducting this research, ask yourself how the competitor is distinguishing themselves. Are they highlighting their experience, return on investment, or customer service?
Outside of specific pricing details, do some extra digging on your business’s specific industry. What are the market’s demands and expectations and how are these being addressed by competitors’ pricing? How they position themselves in terms of price and unique value will help you secure your position in your market.
6. Delve into Competitor Content Strategies
Luckily, gathering marketing intel about your competitors is fairly easy, since most materials are external-facing. Sign up for their newsletter to find out what they are highlighting — customer success stories, new products, upcoming webinars, and industry trends. Notice what is compelling about their emails, and ask yourself: is there anything you can add or remove from your emails or newsletters to draw more customers in?
It’s a good idea to subscribe to competitors’ blogs as well, to discover which subjects they cover. Do they leverage any expert writers or co-market with channel partners? Examine the tactics they use and explore whether they are worth reproducing in your business. Pick topics for your blog that you can write about in a more effective way, and consider tapping into guest bloggers to extend your reach. If you spot inaccuracies or mistakes on their site, use that as an opportunity to spell and fact check your own blog posts, and ensure that your blog’s voice is distinctive among your competitors with posts that are helpful (not pushy) to your ideal customer.
Podcasts, videos, and infographics are becoming popular marketing tools, too. Share examples of your competitors’ media kit with your creative team to see if they can spruce up any of your business’s marketing materials. If possible, connect with upper management to see what interviews they can plan for the future. If direct mail is a channel you use or want to use, try looking on social media to see if there are any unboxing videos that might clue you in to offline marketing your competitors are doing.
7. Evaluate Competitors’ Social Media Marketing
An active social media presence is imperative. There were 3.2 billion social media users worldwide in 2019, and this number has only grown. With roughly 42% of the population on social media, marketers should place a heavy emphasis on this section of a competitor analysis. In fact, 73% of marketers believe that their efforts through social media marketing have been “somewhat effective” or “very effective” for their business.
First, find all of the social media channels your competitors post. This can include, but is not limited to: Twitter, Facebook, Instagram, Snapchat, TikTok, LinkedIn, Pinterest, Reddit, and Youtube. On each platform, ask yourself the following questions:
- What is their overall tone?
- How frequently do they post and what time do they post?
- What channels do they use the most?
- Are they missing any important channels that your business uses?
Next, assess their followers:
- Do people interact with their posts or stories?
- If so, does the competitor reply to followers’ comments?
- How many repins, retweets, and shares do their posts get?
- What type of content is most popular?
- Can you figure out what demographics respond most to competitor content?
This analysis will underscore how you can differentiate your content and the way you engage with your following. Then, scrutinize competitors’ content:
- Is their content original, or do they often reshare from other sources?
- Do they work with influencers?
- Do they use videos, photos, or a mix of both?
- Do they push people to landing pages?
If your competitors are nailing social media, you’ll have to brainstorm new ways to communicate with your following or find a new group of prospects to target. And, if your competitors are ignoring social media altogether, you have an opportunity to swoop in and wow potential customers with your own.
8. Determine How Competitors Ship Products
Some companies nail the art of communicating shipping expectations with their customers, and instilling confidence in your customers can give you a competitive advantage. This can be particularly tough in times when there might be shipping delays and higher demand simultaneously, like during the COVID-19 pandemic. But even outside of a pandemic, shipping costs can be prohibitive for prospects and is a top reason for cart abandonment. Add your competitors product to your cart and try different addresses to see how the shipping prices vary and ensure your costs are reasonable in comparison.
Another way competitors may set themselves apart is by personalizing the shipping experience. Watching unboxing videos on social media might show that they include a thank you note or have distinguishing packaging. This research might also give you clues as to other ways shipping can increase customer satisfaction, like giveaways, proof of exceptional customer service, or tiered loyalty programs.
9. Analyze Competitors’ Recruitment and Funding Strategies
Companies that are recruiting are most likely growing. Certain roles can be an especially pertinent leading indicator. For example, hiring for several new product manager roles might signal a new product development. Alternatively, a huge rise in job openings across the board could signify a mass exodus. Use LinkedIn, Indeed, and ZipRecruiter to get a pulse on your competitors’ recruitment.
Glassdoor can also give you a sense of company culture. Are your competitors treating their employees well, or is their staff leaving in droves? Read reviews carefully, as there could be nuggets of wisdom regarding frustration with a competitors’ sales, marketing, product, or customer success strategy. In addition, employees may complain about low wages, which could indicate that company finances are in trouble.
If your competitor is privately held, check out Crunchbase, Kickstarter, or Indiegogo. There you’ll get an idea of what funding they’ve raised and how much they might be seeking in the future. Interviews, conferences, blogs, and press releases might be other places where competitors disclose their financial progress. If your competitors are public, they must publish their financial reports. Skimming those reports and attending competitors’ quarterly earnings calls can divulge where they are allocating their budget. This only allows you to be more strategic with your investments.
10. Understand Competitors’ Customers
Besides knowing the ins and outs of your competitors’ operations, you also need to know about your competitors’ customers. Read as many reviews as you can to get an idea of how they feel about your competitors’ products, shipping, and ads. Look on competitor websites, blog posts, social media, and public review sites (like G2 or Capterra).
Positive reviews for a product akin to one you sell could be a sign that people are interested in buying yours. Understand what, exactly, customers are enjoying and try to incorporate those features into your product or service. On the opposite side of the spectrum, reviews revolving around shoddy product quality, poor shipment standards, or unhelpful customer service can shed light on gaps you can fill. Figure out what weaknesses you can capitalize on to turn competitors’ angry customers into your happy customers.
Applying What You’ve Learned
While these ten steps set you up for a solid competitive analysis, it’s important to note that you have to make your observations actionable. Try using excel to organize your ideas. What are your competitors doing well? What are your competitors’ weakest areas? Are there opportunities in the market where your business can make an impact? Match up the answers to these questions to particular area(s) of work, like SEO, PR, creative, etc. This exercise will help you prioritize what to work on first, so you can then prioritize each step in relation to your business’s goals.
For instance, if your sales team is constantly running up against a certain competitor, you may want to make battle-cards, factsheets on your competitor’s strengths and weaknesses. These cards equip your sales team with the messaging and information they need to convince potential customers why your products or services are better. Get your coworkers’ feedback as well — they might have insight into why your company has decided to pursue one strategy when a competitor has done the opposite. Your peers may also have original thoughts on how to execute on ideas, and getting their buy-in can help guarantee that your company will take action on your analysis.
Lead the Pack With A Robust Digital Marketing Strategy
A competitive analysis helps you get a sense of who your competitors are, what they are offering, how they are marketing themselves, and how they are treating their customers. The competitive landscape of any industry is ever-changing, and your digital marketing strategy has to change along with it.
Marketo Engage streamlines complex buyer journeys by sending the right messages at the right time. No matter what industry you’re in, Engage helps you fine-tune your marketing strategies to engage and retain happy customers. Not only that, Engage measures your success. When you meet your KPIs, you’ll know that you’re on the leading edge. Stay ahead of the curve by requesting a Marketo Engage demo today.