A business isn’t just a startup idea; one gets last night, wakes up the next day, starts their venture, and gets successful the next day. It is never a straight roadway. Yes, it does take an idea to start, but a lot of research to proceed further.
However, to begin with, one needs to know how to do a competitive market analysis, which is one of the parts of research.
In this article, we have condensed 3 different detailed ways in which many firms or brands conduct competitive analysis for market, digital media, and eCommerce.
How to Do A Competitive Market Analysis
If you are new to the game or looking for rebranding, you need to follow these steps for your competitive analysis.
Step #1: Pick Your Competitors
Pick your top three to five competitors to analyze. When selecting competition, be reasonable. Think about businesses you regularly compete with and where your skills are similar.
To put it another way, unless you are directly in competition with Apple or Dell, don’t pick those businesses if you are a small-scale computer manufacturer.
Pick regional or local competition if most of your clientele are in those areas. By all means, include them on your list if you regularly compete with one or two businesses for business, winning and losing some.
Step #2: Describe Why Your Competitor Is Your Competitor
For your competitor’s description, select qualities you can count and gauge. The characteristics you pick to describe your rivals must have market relevance and should give you an idea of who your broad resource competition is.
The company’s employees and yearly revenue are included in most competitive evaluations. Include important financial data for the company, such as gross margin, net margin, cash on hand, etc., if you are researching a publicly-traded company.
Suppose you are in one of the leading cosmetic companies and want to collect the financial information of your competing company, which is trying its best to keep this information a secret. Then here is a catch:
Go to Glassdoor or Ambitionbox, and look for the roles and their average salaries. Also, consider the pay at your firm for the specified job positions you are searching for. Now average them out, and go to LinkedIn, go to the companies’ page (not from your original company’s LinkedIn page), and check the number of employees.
Here comes the very important part, calculation!
You need to multiply the average pay for the number of employees (different for a different position). This might not be a brilliant idea, but it can help you get a rough idea about the financial information of your competitor firm.
Step #3: Write About The Offers And Facilities Your Competitor Offer
Since most businesses go to great lengths to describe their offerings on their public websites, explaining the product is a simple step to complete. To fully grasp the competitive offering, you can typically download many brochures and spec sheets from any website. List both the goods and services you offer in addition to those you do not. This is a suitable table spot if it helps establish who offers what.
Step #4: Make A Report On Their Online Activity And Social Presence
The competitive analysis’s most crucial step is this one. Because your internet presence has the greatest potential to provide you an advantage over your competition or cost your business, thus, it is crucial. The most obvious place to gain or lose an advantage is when consumers begin their purchasing process online.
Understanding how the web presences of your rivals stack up against your own is necessary. You may see what tools other people use on their websites, such as the sort of platform, ad tools, plug-ins, or marketing automation platform, by using services like Ghostery or Datanyze.
Step #5: Mention Their Plus Points
You can list your competitors’ advantages now that you know their internet presence and business characteristics. This is not the time for bigotry. When listing your company’s strengths compared to yours, be truthful with yourself.
List their advantages in terms of their online presence, such as substantial website traffic, high rankings for important search terms, a vast content library, several methods to engage, simplicity of conducting business, the usage of a marketing automation platform, etc.
Step #6: Note Down Their Negatives Or Missing Points
Consider your weaknesses in the context of the market in which you operate. A small or nonexistent sales staff, a low gross margin, a poor net profit margin, low cash flow, a high employee turnover rate, location, building size, etc., are weaknesses.
Make sure to include a list of their web presence’s shortcomings. If they don’t have a strong internet presence, this will be the low-hanging fruit where you can quickly acquire an advantage.
Online presence weaknesses could include a poorly structured website, a non-responsive design for mobile devices, a complicated or unclear user interface, a lack of useful content, a company or product focus, a slow page load time, the absence of a paid ad strategy, a lack of knowledge of important keywords, etc.
Step #7: How They Can Beat You In The Competition
Some of your competitors will have strong suits that harm your business. Consider your response, if any, to present or hypothetical threats. In some circumstances, you might be able to quickly neutralize a danger, such as by improving your ranking for a crucial keyword or switching to a paid term.
In other situations, you might give up one of your competitors’ advantages and concentrate on your own. You should be aware of as many hazards as possible, even though not all require a reaction.
Step #8: Make Out Why You Are Better Than Them
Opportunities will emerge based on the list of flaws you compiled in the previous phase. Some possibilities will demand a lot of resources, while others will only need time. Meeting with your team to set priorities for the opportunities you decide to explore is an excellent idea.
If your competition does not provide content, a common option for a manufacturing company can be to create informative content. You will have an advantage in search results and audience engagement by creating instructional content and publishing it on your website, which will result in more revenue for you and less for your rival.
How to Do Competitive Analysis in Digital Marketing
Everything is digital these days; even offline businesses are online. However, The competitive analysis from the offline perspective is slightly different from the online one; let’s see how.
Step #1: Lay Down What Are Your Marketing Objectives
What do you hope to achieve with your marketing activities in the end?
The ultimate objective for every business owner is nearly always higher revenues and lower operational costs, but there are a few measures that one must take first.
Discuss your long-term business objectives with your teams, and decide how digital marketing fits into those strategies. How can researching your competition’s internet presence enable you to accomplish these objectives?
If increasing sales is your aim, analyze what lead magnets are currently working and not working, as well as what your competitors are doing. Increasing your social media presence may require you to employ more social media managers and specialists and run advertisements on these networks.
Step #2: Define Your Target Audience Or Customer
Your target customer may not be the same as your target audience, so you should learn more about them and develop well-researched, accurate buyer personas that can help you advertise to them more successfully.
What types of websites do your ideal customer access? What types of values, interests, and preferences do they hold? What other types of demography are they likely to belong to, how old are they, and where do they live? Here, your competitors’ consumers and prior clients can offer some useful advice.
Discover the branded imagery and material that will appeal to them and compel them to interact with you and the platforms they are most likely to use, such as social media or email campaigns.
Step #3: Pick One Marketing Channel Fit For Your Promotion
Choosing the right marketing channel can be a challenging task in the beginning because no one knows how the different viewers/audiences will react to your content on different social media channels.
The best idea is to work on your golden points. Let us explain.
Suppose you have a par level of graphic designers. Now, if you add excellent copywriting to the equation, your awesome social media post is ready to be posted.
So, what’s better than Instagram and Facebook?
Similarly, if your team has expertise in running paid ads, then Facebook ads and Google AdWords are right for you.
Thus, you need to list the channels you want to prioritize, such as social media, email, display ads, YouTube advertising, and content. Find out which ones gain the most and least traction and why. Your overall marketing approach will benefit from this refinement.
Step #4: Choose Your Competitors In The Marketing Channels
It’s time to focus on the competitors you want to research based on the type of customer you’re targeting and the digital marketing channels to emphasize. You should ideally have one contestant from each of the previously mentioned groups. However, you should still strive for three to five companies to investigate, even if there isn’t much competition given your product mix and industry.
Step #5: Examine The Websites And Digital Marketing Platforms Of Your Competitors
Explore the websites, digital marketing platforms, newspaper mentions, and information you can find about your rivals in-depth.
Look at their branding and messaging, general internet presence, customer experience, outreach, and other important areas for brand development and continuous business survival. Why don’t you do this, and what do they now do differently from what you’re doing? What does it seem to work for them?
Also, consider any chances they might be missing out on or any less evident drawbacks. For instance, a confusing website might defeat even the most expertly executed advertising efforts and substantial social media presence.
Step #6: Examine The Marketing Strategies Of Your Competitor
Differentiating your brand in the marketplace is the main goal of positioning. Thousands of different brands can offer identical products, but there is a reason why these brands have the reputation and following that they do.
So, how are you differentiating yourself from your rivals, and how are they? For instance, you might employ iconography, fonts, or branding markings comparable to your rivals but employ an entirely different color scheme.
Find ways to set yourself apart from them so that people will remember your brand. Make scorecards for various factors, such as marketing collateral, communication style, client satisfaction, and social media presence.
Step #7: Know Your Most Important Performance Indicators
Your company and marketing goals are connected to your key performance indicators (KPIs). What metrics must you monitor to determine whether you are on track to accomplish your objectives? Which indicators are crucial for monitoring both the activities of your audience and your competitors?
While several monitoring programs can notify you when your company is mentioned on social media, in blog posts, or in the press, Google Analytics includes several goal and event tracking features that give you a more comprehensive understanding of your audience.
You should also set up keyword track metrics to ensure you outrank your rivals on specific keywords. Set monthly goals using this information, and look for methods to continually advance the bar.
Step #8: Create A Report On The Competitive Analysis
Gather all the data above into a report at the start of each new month (preferably Google Data Studio). With this information, you may identify possibilities to profit from and do more knowledgeable business and marketing decisions.
To stay inside your marketing budget and increase your return on investment (ROI) for digital marketing, poor KPIs can help you identify unsuccessful initiatives and stop tactics that aren’t working.
Learn how to thoroughly evaluate the data in Google Analytics reports so that you may discover new information about your target audience and what your rivals are doing in digital marketing. The competitive analysis offers a foundation for enhancing other components of your digital marketing initiatives and overall operations.
How to Do A Good Competitive Analysis
A good competitive analysis is less theoretical and more statistical. For instance, if you are doing a competitive analysis for your brand/company, then you should focus less on the history of the company and more on how the startup idea evolved into a full-fledged business.
There isn’t a strict roadmap for this as the ‘good’ is subjective. Though, we are listing down some of the keys that need to be in your analysis as follows:
- Their Market shares
- Marketing strategies (online and offline)
- Work Culture
- User/Customer feedback
- User Interaction
- Strength and Negatives
- Revenue (if available)
You can use various tools for your analysis. One thing you need to make sure of is to maintain your anonymity. You can’t disclose who you are even while enquiring about your audience.
How To Do Competitive Analysis For Online Product
Ecommerce products and their marketing also require competitive analysis. This one, however, can be similar to the digital marketing one we discussed above. However, digital marketing covers a broad range of options. One will have to restrict themselves to product competitor analysis in this segment.
Step #1: Gather The Quintessentials
Gathering the prioritized data of your rivals is the next stage. Your approach to collecting data should be as automated as you can.
Even though it’s unlikely that you’ll automate all aspects of data collection, using analysis tools like Twitter, Facebook, or Google Analytics will assist you in gathering pertinent information. Thanks to them, one might automate your collection for search engines and social media outlets.
Step #2: Analyze The Gathered Information
Identifying the key performance indicators is necessary before you can analyze your data. Your KPIs might contain figures like traffic volume, page authority, and unique backlinks if, for instance, your objective is to increase organic search traffic over your rivals.
Analysis solutions with built-in analytics tools, like Google Analytics, can provide you with a wealth of data. They don’t give instructions on how to use it, which is a drawback.
Step #3: Adapt Your Business Plan To The Findings Of Your Competitive Analysis
It’s time to enhance your marketing and sales plan after establishing and examining all the necessary facts.
Here is a further crucial point. The first step in solving the problem is identifying where you need to improve based on your rivals’ actions. The second step is to keep an eye on your clients’ actions and effectively use all the data you get to put your company ahead of the competition.
It’s crucial to remember that this framework won’t give you an insight into how the target audience perceives you and your competitors. It is usually a good idea to conduct basic research to find out how the public views your company and your competitors.