Every time we help a new brand, the first thing we do is conduct a competitive analysis. This helps us to understand the brand’s positioning in the market. It also assists us with identifying the brand’s competitors, strengths, and weaknesses and reveals where they can improve.
In this blog, we break down the various steps required to conduct a good competitor analysis and identify some ways to give big brands a run for their money.
What is a competitor analysis?
As seen above, a competitor analysis involves comparing competitors against a brand to understand the main differentiators, strengths and weaknesses between that brand and the competitor.
It requires an in-depth look at each of that brand’s competitors and their position in the market. It also helps to reveal their sales and marketing tactics, growth strategies, and other critical business aspects.
Conducting a competitive analysis gives a clear picture of the market landscape, which allows us to make informed decisions going forward. It’s also an opportunity to learn from others.
It isn’t about copying successful competitors directly or trying to undercut others’ pricing. It’s also not a one-and-done exercise.
4 reasons to conduct a competitive analysis
If you’re not sure why you should invest time in conducting a competitive analysis, here are 4 reasons below.
1. It’s important to identify your differentiators
Think of conducting a competitor analysis as a chance to reflect on your brand and discover what sets you apart in the marketplace.
2. It’s best to find and rely on competitors’ strengths
Find out what your competitors are doing right now to drive growth and emulate them (with your own twist of course). Analysing an industry leader will help you to see what they did to reach the top position in the market.
3. Setting benchmarks for success is key
Conducting a competitor analysis helps you to understand what is realistic. It also assists with mapping your progress alongside success metrics that you have set for yourself.
Although every brand has its own unique path to success, it doesn’t hurt to look at a competitor’s trajectory to assess if you’re on the right track.
4. It pays off to get closer to your target audience
A good competitor analysis not only looks at your competitors but also looks at your audience. It gives you a sense of your customers and helps you to evaluate what they like, dislike, prefer, and complain about when reviewing competing brands.
So whether you are starting a new business or pivoting an existing one, conducting a competitive analysis helps eliminate the guesswork by giving you concrete information that you can use to build your brand strategies.
How to conduct a competitive analysis in just 5 steps
1. Name and categorise all top competitors
This first step is a simple and strategic one. All it requires is identifying the top competitors in your industry and then categorising them into the below buckets:
Direct competitors
These are brands that offer the same product or service as you. They also have the same target audience. People will often compare you to these brands when making a purchasing decision.
Indirect competitors
These brands solve the same problem as yours does but with a different solution. They present possible opportunities to expand your offering.
Legacy competitors
These are established brands that have been operating in your industry for years. They have a well-known reputation in the market and are a trusted household name.
Emerging competitors
These are new businesses that have recently popped up in the market. They have an innovative business model and a unique value proposition that poses a threat to existing brands.
2. Determine each competitor’s position in the market
Once you’ve identified all your competitors, it’s time to start analysing their position in the market. Doing so will help you to understand where you fit in the industry. It will also reveal which corporate giants you should be focusing on.
Using a tool like Semrush Market Explorer can help you automatically determine where your competitors are in the market.
Pro tip: You can find gaps and opportunities for your brand and learn to thrive, even in a saturated market.
3. Benchmark your key competitors
Here are some core factors to consider when you get to work on benchmarking your key competitors:
Quality
Assess the quality of your products or services against each competitor. You can compare product features/services as well as evaluate customer reviews to understand what gives them an edge over you.
Price
Note and record price points for each competitor in an effort to understand their pricing tactics and match them.
You can also interview their customers to find out what they prefer to pay for products or services from a buyer’s perspective.
Customer service
Pay attention to how competitors deal with customers who have queries, problems and concerns. Do they communicate through chat, phone, email, social media, etc?
Also, take a look at customer ratings to see how satisfied their customers are with the product or service and how you can improve based on their feedback.
Brand reputation
Compare competitors’ reputations in the market with Semrush’s free competitive benchmarking analysis tool to understand how customers perceive their brand. Look out for anything negative that customers say about them.
Financial health
If possible, look for performance indicators to assess your competitors’ financial progress. Profit margins and revenue growth are important ones to look out for.
4. Take a deep dive into their marketing strategy
Analyse every marketing channel and then note how your competitors speak to their audience and how they make an effort to highlight their brand personality.
Some competitor marketing channels to explore include:
Website
Analyse their website structure and use of copy to understand their positioning and brand voice.
Subscribe to their emails to learn their schedule, copywriting style, content, etc.
Paid ads
Use tools like Ahefs and Semrush to find out if competitors are running paid ads on search engines.
Thought leadership
Follow their thought leadership content such as podcasts, webinars, courses, etc to get ideas for your own brand.
Digital PR
Find out if a brand is investing in digital PR to build buzz, and analyse their strategy.
To find out, look at their social media for active content marketing and influencer marketing. You can also check out their organic search results to see if they are using SEO to optimise their website and other important links.
Partnerships
Take a look at social media to see if brands have any high-value partnerships. See if they work closely with any mutually beneficial companies.
5. Perform a SWOT analysis
Lastly, create a SWOT analysis. Assess your competitor’s strengths, weaknesses, opportunities, and threats.
To do this ask questions like:
- What are they doing well?
- Where do they have an advantage over you?
- What is their weakest area?
- Where does your brand have the advantage?
- Where would you consider them a threat?
- Are there any opportunities in the market that they have identified?
Conclusion
The above steps are intended for you to take an objective look at your business, sales, and marketing reports and compare them to your competition. Use them as your baseline to compare across the board until you’ve refined your brand for success.
