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Digital Marketing 11 min read
Written by Ayesha Renyard
Content Writer @ Galactic Fed
Expert reviewed by Dallin Porter
Marketing Director @ Galactic Fed
Published 08 Dec 2021
“Stop worrying about what others think and do. Focus on yourself instead.”
It’s a lesson we’ve heard since we were kids. Focus on yourself—not on others. While this may be helpful advice for personal growth, when it comes to running a business, you have to care about what others are doing. It’s the only way to remain competitive.
And that’s where a competitor analysis comes in.
A competitor analysis involves researching your top competitors to gain insight into their products, sales, and marketing tactics. Why bother? Well, you’ll be able to:
Let’s be honest—we’re all guilty of late-night snooping on our competitors. With this step-by-step guide, I’m here to show you how to conduct a competitor analysis intentionally and make it count. So channel your inner detective, and let’s get started.
The first step of your competitor analysis is identifying who your competitors are.
There are two types of competitors: direct and indirect.
Direct competitors are businesses that offer a product or service that could serve as a substitute for yours. Indirect competitors provide products that aren’t the same as yours but could satisfy the same customer need or solve the same problem.
Let’s say you own a local ice cream shop. A direct competitor would be the other local ice cream shop down the street. An indirect competitor would be a donut shop. While donuts are a different product, it also serves to satisfy one’s sweet tooth.
When performing a competitor analysis, your focus should be on direct competitors. With that said, conduct these analyses regularly and keep your indirect competitors on your radar—they could release a product that’ll turn them into a direct competitor. (Donut ice cream sandwiches?! How do I compete with that?)
At the core of any business is the product or service they offer. Sure, they may sell ice cream, but you need to dig a bit deeper to make this competitor analysis count.
Take the time to research their entire product line with these questions in mind:
With these questions answered, your competitor will become so much more than an ice cream shop. Meet Innovative Ice Cream: an artisan ice cream shop that offers small-batch unique flavors. Compared to the industry average, their prices are actually quite reasonable. Their target customers are millennials who believe the weirder the flavor is, the better. They operate a brick-and-mortar store year-round and a truck in the summer months. And being the only other ice cream business in town, the battle for market share is on.
It’s important to know your competitors’ products. It’s just as important to understand how they sell them.
A few of these answers will be hard to track down. For example, it’ll be tricky to see their annual reports unless they’re a publicly-traded company.
However, your customers and prospects are an excellent resource for uncovering some of this information. If they’re considering a competitor, ask them why: Did a specific product or feature catch their eye? Was it the price? The customer service experience? While this isn’t a glimpse into your competitors’ financial records, it does provide valuable qualitative data on their sales tactics.
And don’t hesitate to do some sleuthing yourself—particularly around their pricing, sales, and shipping costs. It helps gauge industry standards and ensures your pricing model is competitive and enticing.
So if your competitors offer a free week trial, consider a month for free. If their shipping costs are free after spending $100, offer free shipping over $50. It’s not always about reducing your prices, though. Let’s say their ice cream pints are cheaper than yours. Instead of lowering your price, offer a discount when they buy pints in bulk. Your customers will be pumped on the discount—and you’ll make a bigger sale!
Selling and marketing are two very different things. A product may be amazing (*ahem* donut ice cream sandwiches), and the checkout experience could be absolutely frictionless. But if your marketing falls short, the product won’t sell. So it’s essential to identify what works in your industry—and what doesn’t.
I understand that marketing is typically a creative process, and you might be hesitant to borrow what others are doing. Your mother’s voice might be creeping into your head right about now. (Stop worrying about what others…) Press pause on those thoughts and hear me out.
Here are three quick reasons why you should consider your competitors’ marketing strategy.
Maybe you saw a killer ad or social media post that’s driving a ton of engagement. Why reinvent the wheel? Recreate it with your brand style and tone and see if it’ll work for you too.
For more tips on analyzing your competitors’ marketing strategy, take a few minutes to watch this video from SEMrush:
A company’s content strategy says a lot about them. Not only are you looking for the types of content they create (blogs, webinars and videos, FAQ pages, case studies, customer stories, podcasts), but also:
Now, this may sound like a lot, so here’s how you can scope down the work.
You’ve done a lot of digging on your competitors. Now it’s time to use that information to conduct a SWOT analysis. Many businesses will do one for their own company. Today, we’ll be discussing it in terms of your competitors.
If you’re unfamiliar, SWOT stands for strengths, weaknesses, opportunities, and threats. This exercise is used to evaluate a company’s competitive position and to develop strategic planning. It assesses internal and external factors, as well as current and future potential.
Let’s flip the discussion around on your competition. To get started with a SWOT analysis of your competitors, ask yourself these questions:
Is it the wacky flavors? The Justin Bieber endorsement?
“Stop being so innovative. Sometimes people just want vanilla.” -Yelp Reviewer
They operate a truck in the summer months, you say? Have you considered operating a truck year-round?
Plot twist: They start offering donuts—and donut ice cream sandwiches.
When you perform a competitor analysis, you learn a lot about your competitors. At the same time, you learn a lot about your own business—and areas of opportunity.
Perhaps the big gap you can fill is product-related. Maybe you identified a social channel that’s untouched by your competitors. Or, it could be as simple as offering more discounts and sales.
If you uncover an opportunity to build out your paid media or SEO strategy, that’s definitely something we could help you with. So give us a shout—our teams are happy to help!
Content Writer @ Galactic Fed
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