By Debbie Gregory.
What is a competitive analysis?
A competitive analysis is defining and evaluating your major competitor’s strengths and weaknesses then comparing them with your own.
Why do a competitive analysis?
When you have a better understanding of your competition, the greater your chances are to outperform them.
A competitive analysis can be a very effective tool to help you grow your business. The more comprehensive and in-depth your analysis, the greater benefit to you and your business.
Types of competitors:
There are many types of competitors. You may have a fairly accurate sense of who your competition is but you might be surprised to learn that you overlooked some competitors.
- Direct competition – These are the businesses that offer the same products and services that you do and service your target market.
- Indirect competition – These are the businesses that offer the same or very similar products and services that you do but they target a little different market than you do.
- Tertiary competition – These are the businesses that offer something that may vaguely link to your business but isn’t in direct competition with you.
Search for information about your competitors:
Begin your analysis by compiling a list of names of known competitors as well as keywords or phrases that are linked to your products and services. Once you have that list in hand, select your favorite search engine and use it to locate your competition.
Search engines are wonderful for helping you figure out who your competitors are as well as helping you to gather data on what they are doing. Don’t stop there! You will need to click on their sites, social channels, articles, and more to gain the information you need to do you analysis.
Ways to find out who your competitors are:
- Look at the ads / sponsored listings when you do your searches
- Use content analyzing tools to search blog posts and social media for company names
- Ask your current customers, or prospective customers, who else they use or have used
- Read trade publications
- Check social media channels
- Look at popular forums
Put the data in a spreadsheet:
Once you have your list compiled, you can begin your actual competitive analysis. It is a good idea to use a spreadsheet to keep all the information you collect together and in a format that is easy to read and access.
Obtain a basic overview of your competition:
Include information:
- Number of employees
- Noteworthy employees
- Number of offices and locations
- Number of clients
- Annual Revenue
- Products and services offered
- Area(s) they operate I
- Websites and social media channels they own
- Company history and significant milestones
- Message/Brand
Next, you want to take a close look at how the company sees itself. The easiest way to do this is to look at the content they put out under their brand. How do they talk about their own products and services?
Look closely at items such as:
- Website copy (the text on the site)
- Social media channels
- Printed materials (flyers, brochures, trade materials, etc.)
- Employees speaking at events
- Press releases or appearances
- Interviews given by employees or management
The messages they put out will provide valuable insight into what they feel is important, the key areas they focus on, and the type of customer they are targeting.
Ask yourself these types of questions while compiling the data:
- What is their opening piece of copy on their homepage?
- What features/products do they emphasize?
- Who (what types of people or customers) are they specifically talking to?
- How do they talk/what language do they use?
- What are their main selling points?
- What imagery (graphs, charts, cartoons, photos, etc.) do they use?
- What competitors do they talk about, if any?
- What clients do they highlight, if any?
Please stay tuned for Part 2 of this series will go into greater depth regarding the information you should be collecting such as pricing, financial records, job postings, and their website.
