Marketing directors know that if you’re not analyzing your competition, you’re at a disadvantage. Chances are they’re watching you instead. To level the playing field you have to return the favor by performing a competitor analysis.
So, Why Do You Need a Competitor Analysis?
Are you content to settle for second place, copying ideas from your competitors because it’s easier than doing the legwork required to be on top? Is that the kind of business you run? Since you’re reading this, I guess that isn’t you.
If you want to be a leader in your industry it’s vital for you to be proactive when deciding how to market your business. A competitor analysis will arm you with information to create a marketing strategy that’s based on facts instead of guesswork. You’ll be able to focus on your strengths and capitalize on the weaknesses of your competitors. Now that’s more like it.
Paying attention to what they’re doing can reveal opportunities for new products or market niches that aren’t being met. By determining where they’re lacking you can distinguish which areas your business is excelling and can highlight those areas to help you stand-out to customers-more relevant website copy, blog posts and social media messaging.
Keeping up with what’s going on in the marketplace means that you can make educated, timely and financially sound decisions about the story you’ll tell and where to spend your marketing dollars.
How To Create a Competitor Analysis in 5 Simple Steps
The best way to perform a competitor analysis is to think of it in five easy steps:
1) Define your customers. What is your target market? What does your customer look like? What service or product do they want to purchase? How much will they spend for it?
2) Identify your top three competitors. Who is targeting the same market segment as you? Which companies do you find at your back door, trying to lure away your customers? Which businesses are successfully converting leads into clients?
3) Itemize success factors. Which factors determine success for your company? Is brand recognition most important? Are customer experience and consumer loyalty the primary ways that you measure success? Do the number of locations or the scope of your services identify who is winning?
4) Weigh and rate. Once you’ve determined the success factors, weigh them based on importance. Then rate each of your competitors and yourself. You’ll see clear patterns begin to emerge. They’ll show you which of your competitors are succeeding and where you land in the mix.
5) Analyze. Once the numbers are in, take a hard look at what you’re excelling at. Do you want to focus more energy there to really stand out from your competition? If your analysis has revealed an untapped market segment, perhaps investing marketing dollars to attract those new customers is your best move. Don’t forget to scrutinize areas for improvement too. By recognizing and addressing your weaknesses, you’ll be setting yourself up for success.
When Should You Do a Competitive Analysis?
Marketing managers and business owners all perform a competitor analysis before opening their doors. It’s an integral part of a good business plan. But don’t neglect it once the business plan is complete. It’s crucial to set a regular reminder to check-in and see what’s changed.
Depending on the nature of your business and your marketing plan, monthly to quarterly is sufficient. If you’re immersed in a quickly evolving industry like real estate a quarterly check-up may be insufficient, whereas a cleaning service company won’t find as many fluctuations and can update their competitor analysis quarterly.
Don’t become buried in the analysis and paralyzed by the numbers. The idea is to gain information and use it to make educated decisions, not become consumed by what your competitors are doing. Staying informed arms you with an additional tool to help your business rise to the top.
About The Author
Gordon Conner is a Marketing & Branding Consultant/Coach who helps build WOW brands for small businesses. He has been providing advertising, marketing and branding services for 40 years and lives in Midlothian, Virginia. He can be reached at Gordon@GordonConner.com, or read more at www.GordonConner.com.