Competitor Analysis is vital if you want to beat the competition in your industry or sector. It is important that you can identify when a competitor has products or services that are better than yours so you can improve. Moreover, if the products and services are not better than your company’s, why are they winning?
Competitor analysis is a method of researching your business competitors’ strategies, processes, and products. The aim of the process is to understand how you can match, benchmark against, or beat them.
You should seek to understand the competitor’s marketing strategy and relevant value propositions. Another factor to be considered is the quality reach of their brand and the demographic that they serve.
An important part to note regarding this process is to identify who your competitors are.
Many business leaders that I have worked with incorrectly identify competitors. If your company has a turnover of £5 million, generally, a company with a turnover of £100 million should not be considered a competitor. To be frank, the larger company would be operating in a different league so to speak.
An exception to this rule is when both businesses have a very similar product or service that is competing for the same niche demographic of customers in the same area.
Do you know your Business Competitors?
When identifying your business competitors, it is important to ascertain who your direct competitors are.
Direct competition includes businesses that sell the same services or products as your company. In this scenario a potential customer will likely choose between your company and your competitors based on several factors. These could include the following:
- Product or service cost
- Speed of delivery or project start date
- Reviews from the web
- Qualifications or experience
- Appeal of the brand
- Location of premises
- Perceived quality of products and services
How To Research a Competitor
Conducting market research on competitors is a necessary process if you want to learn from and beat your businesses competition. There are several different methods that you can use to undertake the research, and all have their merits depending on what you want to find out.
For business rankings for keywords or terms related to the products or services that you sell, Google is the first place to go to. Firstly, does the competitor beat you in the SERPS Search Engine Results Pages? You may have a better product, but can customers find it?
Understand Your Competitors Web Marketing Strategy
To do this you must try to identify how they are trying to acquire customers from the web. This can be undertaken quickly, but you must pay attention to the following:
- Do they produce regular content updates for key products?
- Are they prominent locally or nationally?
- Are they using advertisements such as Google ads?
- What key words are used for their highest-ranking website content?
- Do they run Google ads with your business name (it does happen)?
- Is their brand consistent?
- Do they have a high website domain authority?
- What social media platforms are they visible on?
Call Your Competitor
Although this method may seem a little underhand it is an effective way of gaining insider information on a competitor’s products, services, pricing, and operational methodology.
- Ask, how much does it cost and ask for a detailed price breakdown.
- How fast can they deliver?
- Get them to quote so you can compare between your quotes and theirs.
- Ask why you should use them rather than use your business (this will identify what they tell potential customer about your business).
Read Their reviews
You should try to understand what their customers like about them and what they do not so that you can shape the information into your marketing strategy efforts for product or service development.
Visit Their Premises
The goal of this gambit is to understand more about how the competitor portrays itself to customers. What do they wear? Are staff approachable and friendly? Is the site tidy? Do they have clean vehicles? Do they serve drinks? What facilities are at their location?
Hire Their Employees
Recruiting a competitor’s employees may come across to some business owners as a dirty underhand tactic, however it regularly happens. I have even executed this tactic whilst employed as a managing director. And guess what, it works. However, if we are talking about hiring employees from large corporate companies, they will quite likely have signed non-disclosure agreements (NDAs) and or non-compete contracts for a set period of time.
Buy Their Products
If you want to truly understand the difference between a competitor’s product and your own business offering, you need to try it. It is important to remain unbiased and objective during this process to gain understanding of how the product compares with yours. This is not the time for rose tinted glasses, you must be critical of your own product and honest when looking at the differences. Simply put, if the competitor product is rated more highly than yours, you need to know why.
Speak to Their Customers Directly
This method may seem a bit extreme to some people, but it really depends on how determined you are to beat the competition. This can be carried out at the competitor’s premises by asking people why they purchased the product or service.