Learning the audience`s wants helps businesses deliver helpful products and services that convert.
Competitive analysis is one of the ways to identify your audience`s needs.
Knowing your competitors` strengths and weaknesses helps you be innovative in replicating their strengths and using their weaknesses to improve your business.
Competitive analysis can help you discover the gaps in your business and learn new strategies to fill them.
This content will help you learn what competitive analysis is and how to do it so you can serve your audience`s intent and drive conversions.
What Is Competitive Analysis
Competitive analysis refers to researching competitor businesses' strengths and weaknesses.
It entails analyzing their products or services, sales, and marketing strategies to know their performance.
Benefits of Competitive Analysis
Competitive analysis helps understand why your competitors thrive. This helps to discover your weaknesses so you can restructure your marketing campaigns to suit and entice your audience to make purchases.
It also enables you to know your competitors' weaknesses, which allows you to improve your business and attract more clients. This can mean improving product or service qualities and marketing strategies to meet clients` needs.
Competitive analysis is a chance to learn how your products and services differ from your competitors. This helps in identifying your business` value proposition, which can predict how you should strategize your marketing efforts.
Additionally, learning competitors` strengths and weaknesses helps to measure your business growth and helps you to get more insight on how to improve it.
Differences between Market Research and Competitive Analysis
It`s easy to confuse the difference between these terms, leading to different results from what you want.
A competitive analysis focuses only on examining your competitors' performance.
Meanwhile, market research is the process of gathering information about a target market or clients, which helps understand their needs and interests.
It involves collecting data such as demographics, psychographics, product and service qualities, pricing, etc.
Market research involves collecting data about your target market and clients, which includes practices like
- Conducting surveys
- Conducting focus group interviews
- Doing social media listening
- Doing customer observations
- Doing competitor analysis
This content explains more about how to do market research and increase quality traffic to your business.
How to Conduct a Competitive Analysis
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| Photo by Thirdman: Pexels |
To conduct an effective competitor analysis, you have to know your marketing strategies. Aligning your goals with the analysis helps get fast and accurate results.
For instance, if your goal is driving sales to your business, you can focus only on that and check how competitors perform.
After knowing the goals you want to measure, consider the following points:
Identify Your Competitors
Competitors are businesses offering the same products or services as yours. Analyzing them helps identify your audience`s intent and learn how to satisfy them and achieve your marketing goals.
You can identify your competitors by doing keyword research for your product or services.
For example, if you sell T-shirts, type the keyword T-shirt and search. The list of companies you will get selling the same thing are your direct competitors.
Open their websites to see the products and services they sell, and their clients` conversations.
You will also see their social media links. Click on them to open their social media platforms and see how people talk about the products.
That will enable you to know your competitors` clients` interests and complaints so you can provide helpful products or services and drive sales.
Also, interview your existing clients about the best alternatives they love apart from your business and why they like them.
Then list the businesses they mention.
Besides, you should also list your indirect and replacement competitors.
Indirect competitors are businesses selling products or services closely related to yours. An example is a business selling meat snacks and another one selling snack nuts. These businesses serve different lovers of snacks who differ in the snack types.
It`s important to list such businesses as well because their marketing strategies could help your business, too.
Replacement competitors are businesses offering alternatives to your products or services. For example, clients may replace meat snacks and snack nuts with egg roll bowls and vegan meatloaf. A restaurant`s replacement competitor could be a café.
That can be due to the product's high price. Analyzing these businesses also can help you know how to compare your product prices with your competitors and create prices that entice clients to buy from you.
When conducting competitor analysis, pay attention to all types of competitors. They will help you get insights on how to improve your business and attract more customers.
Create a Competitor Matrix or Grid
A competitor matrix helps figure out the details you want to find out from your competitors.
This entails making columns and dedicating each one of them to a particular competitor.
Then, list the information you want to analyze from each competitor.
Here is what a competitor matrix looks like:
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| Image source: Contify |
This is an organized way to help you compare results from your competitors and identify the differences.
Check out this resource and learn more about how to create a competitor matrix.
Determine Your Competitors' Products and Services
People purchase products or services that help them solve their pain points.
To increase sales to your business, ensure your goods benefit your clients.
To affirm that, check how other businesses that sell relevant products perform.
That involves checking your competitors` websites to see the products that convert the most and see what clients say about them. That will help you know why people love the products.
If your product cost is the reason for low sales, product research helps know how to set prices that persuade clients to purchase.
Also, examine their product features and see the qualities that please their clients, which your products miss, and implement them. Clients` comments on social media and websites can also help you know this.
If, for instance, you sell cameras and clients complain about your competitors` video quality, find products that align with the client's interests.
Analyse Your Competitors` Selling Points
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| Image by Pavel Danilyuk: Pexels |
This implies your competitors' products or services' uniqueness that entices clients to purchase.
Your competitors could be providing subscriptions, selling in volumes, or having a one-time purchase. Or maybe they offer discounts or free deliveries and it works nicely for them.
You can also figure out how to adjust your business to such tactics.
However, ensure your products or services align with the pricing model.
For example, you can use a one-time-purchase model for digital products such as courses. When one purchases, they can have lifetime access to the course. That`s because you won`t have to create the same course again and again.
However, You cannot offer such a model in physical goods. That`s because you need to spend money creating new products after a stock is over. If you offer a one-time purchase, you will incur losses.
Another tactic competitors may use is offering free trials for their subscription services to let people test their services' effectiveness before purchasing. This makes clients consider a business risk-free, which increases the chances of making sales.
You can provide services that match those offers, too.
If you are in a digital marketing niche and your competitors offer email marketing services subscriptions, you can create social media marketing services and offer free subscriptions.
Besides, examine if your client`s pricing aligns with the product's qualities. That`s because setting a price blindly to compete with other businesses can make you incur losses.
To set the right prices, calculate the production cost and align it with your business's profit target margin.
If your product target margin is 10% and the product production cost is $200, the product will cost $220. So, the profit will be $20.
That will enable you to drive profits and satisfy your audience's intent, which builds a business`s trustworthiness.
Here is more on how to set product pricing.
Consider free shipping as well. Many e-commerce websites regard this as a way to entice clients to buy from them.
However, if you offer free shipping, ensure to cover it in your price to avoid spending your profits on shipping costs and making losses. For example, if the shipping cost is $20 and the products cost $220, you can set a $240 price.
Here is more about how you can offer free shipping and avoid getting losses.
Examine How Your Competitors Market Their Products
Your business niche determines where and how you should market your business.
You should use a marketing method that aligns with your target audience and their favorite platforms.
You cannot market your business to people on TikTok as you would on LinkedIn. Each of these platforms has a different target audience with different marketing preferences.
TikTok's audience prefers short, entertaining video content, while on LinkedIn, people like long-form written content.
To know where to market your business and get profits, check where your competitors market their businesses and if they get nice results.
That involves using website spying tools to check how much traffic the competitors` websites get, where it comes from, and which products convert.
All you need is to research your competitors' websites and list them. Then paste their URLs into the tools and search. You will find their top-performing pages and all the details you require.
That will help you create relevant products to rank and drive traffic.
Some of the website spying tools are
Besides, you can check the social media platforms where your competitors have a huge following. A huge following that engages positively should tell you that many people are interested in such kinds of businesses on those platforms.
You can also do social media listening to know what people say concerning your competitors. Positive comments should signal you that people love the businesses.
Based on that, gauge the platform to market your business.
Here are the tools to help you do social media listening:
Conduct a SWOT analysis
SWOT is a short form for strengths, weaknesses, opportunities, and threats. Understanding this enables you to determine how to re-strategize your marketing and build a successful business.
To perform a SWOT analysis, compare your marketing goals with your competitors` strategies.
For example, if your goal is making sales, the SWOT data will be based on
- Your competitors' most-selling products
- Their pricing tactics
- Their marketing methods and platforms
- Their products qualities
- Their target audience
The goals in which your competitors thrive are their strengths. Replicate them and boost your business.
Their failures are their weaknesses, which are opportunities you can implement and outdo them.
Failures can be caused by internal and external factors.
Internal factors are overcharging products, using poor copy, targeting the wrong audience, etc. To avoid this, charge your products fairly and create copy that enables clients to know how helpful your goods can be to them. This will entice people to buy your products or services.
Here is content you can learn how to create copy that entices people to make purchases.
External factors can also cause business failure.
An example is when you are in the digital marketing niche. external factors can be malicious programs that hack websites and steal people`s data. This can lower people`s trust in your business and reduce sales.
To hinder that, you can use firewalls to encrypt your site to keep hackers from tampering with your website.
This content teaches more about how to do a SWOT analysis.
Conduct Competitor Analysis and Increase Conversions to Your Business
Competitor analysis is an ongoing process. Not only is it meant for starters but established businesses, too. No matter where you are in your business journey, you`ll always have competitors.
To thrive, you need to understand how to stay on top of your industry.
Competitor analysis is the method to help you learn the best ways to conduct your business.
To conduct competitor analysis, identify your competitors, analyze their selling tactics, examine how they market their business, find out where they sell their goods, and conduct a SWOT analysis.
That`s how businesses succeed.
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