They say that ‘competitors push you to achieve more’ and that ‘a horse never runs so fast as when he has other horses to catch up and outpace’. The existence of competition in business is extremely important. But while this ‘race’ makes you want to do more, it can also become very stressful. Competitive analysis will help you be more organized and, in the end, successful.
Performing a competitive analysis means identifying the competitors and evaluating their strategies. You can then use this information to improve your own product. By the way, 41% of business professionals ‘strongly agree’ that competitive intelligence is critical to the company’s success.
4 Steps to Conducting an Insightful Competitive Analysis
Have a clear end objective
Define SMART goals (Specific, Measurable, Achievable, Realistic, Timely) and the things that you want to learn from competitive analysis. After all, you are not looking for facts and figures just for the sake of it, right?
If you are at the beginning of the journey and you’re looking for some numbers to compare your performance to, then competitive analysis is one of the ways to identify the main benchmarks (for example, session length, time in app, and conversion rate).
A potential ‘bonus’ of competitive analysis is finding gaps between what is offered on the market and what the consumers actually want.
Having a clear end objective will also help you not get lost in the crazy amount of information that you might end up with.
Identify the top competitors
Finding the right competitors might be a bit more challenging than you think.
- First, there are the leaders of the industry. These companies are your aspirational competitors. The facts about these companies can be inspiring, but, at the same time, they can make you depressed very quickly.
- Then there are your current competitors. It is always great to ensure the future analysis includes a small and a big company, as well as a direct and an indirect competitor. Direct competitors have products similar to yours. They tackle the same problem and typically focus on your potential customer. With your indirect competitors, you share the same target audience (however, the company is winning the customers with a totally different service). A basic example of indirect competition is pizza and burgers. PizzaHut and Dominos are direct competitors, while PizzaHut and McDonald’s are in indirect competition. All these companies attract people who love fast food. Even though you’ll never start making burgers, you can still analyze the ways McDonald’s attracts the target audience.
- You shouldn’t forget about the potential competitors. Those are, mainly, the industry’s newbies that might poach a big chunk of your audience in the future. Clubhouse proposed a relatively new form of communication. This live podcasting app gained 2 million users since December (why listen to prerecorded conversations, if you can appear in one ‘room’ with Elon Musk in real-time?).
When it comes to identifying your competitors, SEMrush is an online tool that you can take advantage of. App Annie’s Cross App Usage report is part of their subscription package. You select a particular application and then the data report shows you what other apps the audience is using. SimilarWeb helps you see the competitors’ traffic source.
Analyze and compare the metrics
This part of the analysis is the most time-consuming. What points should you include?
Basic information about the company
- Founding year
- Number of people that work there
- Job openings
- Size of the customer base
Find the necessary information on the official website (LinkedIn can also come in handy). Google search for some interviews. Try to predict the company’s next step. Is it expanding at the moment? All this information can be used as a benchmark against your growth.
Information about the product
- Free bonuses
- Technology infrastructure
BuiltWith, Wappalyzer, and WhatRuns are Chrome extensions that will show you what technology the company’s website is running on. The latter claims to recognize even the latest technologies and plugins.
- User acquisition strategy
- Usage of UGC
- Most used platforms
Awario is a social listening tool that monitors the Web and tracks mentions. You can create an alert to keep an eye on the social interactions of interest throughout a certain period. You will be receiving the insights that have already been sieved out. When it comes to your own company, use the tool to answer users’ questions and follow up on feedback.
- Running ads
- Main keywords
- Most used platform
- Customer support (channels, response time)
You can use this tool by LinkAssistant – a software development company that targets Search Engine Optimization. It’s easy to research Facebook ads via the Ad Library. SimilarWeb will show if there are any search ads running and the target keywords.
Video ads are an important part of the marketing strategy. According to Animoto, 93% of companies got a new customer through a video placed on social media. A cool advertisement is one of the ways to leave the competitors far behind. The Perfomante team is the perfect company to help you with that. Short video ads for your Facebook and Instagram that will be delivered in 1-2 days. Take a look at these examples for inspiration.
Perform a SWOT analysis
A SWOT analysis is a simple tool that is used to put a finger on the company’s strengths and flaws. Analyze not only the competitor but also your company. A realistic analysis helps you build on what you/the competitors do well. You will also get visibility on the weaknesses and potential areas of improvement, which helps minimize risks as you are now able to effectively plan, distribute the tasks, and ensure long-term growth.
Insightful competitive analysis is not done in order to steal ideas. A well-executed analysis helps you get a clear picture of what is going on in the industry. Ultimately, you will be focusing on the needs of your customer.
Follow these 4 steps to build an insightful market analysis
- Have a clear end objective
- Identify the top competitors
- Analyze and compare the metrics
- Perform a SWOT analysis
You would have to update the information once in a while, so save our article and come back later 🙂
Remember that data without action is useless. The analysis should inspire and motivate you to make a change in your company’s strategy.
Good luck in becoming the ‘beast’ of your industry!