How to Conduct a Competitor Analysis

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How to Conduct a Competitor Analysis to Understand Competitors & Audience?

Competitor analysis can help you to create a successful plan for your business. Small businesses may simply copy the successful strategies of successful competitors or can create a better plan with new creative ideas.

The most important question is how to conduct a competitive or competitor analysis and why it is important?

Competitor analysis is a technical job but it will be hard as well for new marketers doing it the first time. I have broken down the to-do part in the short point for better understanding.

Let’s start from some common questions.

What is a Competitor Analysis?

Competitor analysis is a method to understand & evaluate your competitors, their products, sales, marketing, growth, strength and weakness.

Data collected from this analysis is used to improve your company’s position in the market, engage more customers and getting more sales.

Competitor analysis will help to know which strategy of your competitors’ was successful and which one failed. Hence your business planning will improve and cost-effective.

Why Competitor Analysis is Important?

Competitive analysis can reduce efforts as well as cost and you can gain better results. Following are the major benefits of competitor analysis.

  • Competitors’ analysis is helpful to know worthy strategies that your competitors applied
  • You can understand the market trends
  • It helps to identify product value from the users’ point of view
  • You can find the Market Gap to increase your share of voice
  • By analyzing audience response on competitors’ products, you can improve your product as well as make a better marketing plan

I think the above points are enough to convince you to conduct a competitor analysis.

Competitors Types

Before analysis, you have to understand who is your competitor?

Understanding competitors might be the hardest stage for you. While my research, I noted that every marketer view competitors from a different angle. I will try to explain most easy way.

We categorize competitors into three categories.

  • Direct Competitors – Companies that are selling the same product or service. This is the easiest finding type. Just go to a search engine and with a few searches, you can find your competitors.
  • Indirect Competitors – Competitors that are in the same category but their target audience is different. For example, a company that offers residential cleaning service and a company that offers commercial cleaning service are two indirect competitors.
  • Replacement Competitors – A company that solves the same problem but with a different product or service. For example, Wallpaper is an alternative to paint and hence a company selling wallpapers will be the replacement competitor of the paint company.

Hint: Go to Google and just type “your-product/service vs.” This query will auto-generate the results. The 2nd part after “vs.” will be the replacement product (not all of them). Now you can easily find which company is selling those replacement products.

How to Do a Competitor Analysis?

There is lots of work to do. Be patient and move slowly. In the competitive analysis, we will analyze the company, its products, marketing tactics and lastly users’ reactions.

a. Company Analysis

Start from the overview and take a look at your company. You have to see how many employees company has, what their workers say and how they market their products.

1. Company’s Employees Feedback

Some platforms can help you to know what a company’s employees say about it. Reading the feedbacks by workers can give you lots of internal information about a company.

Glassdoor is a great social platform where you can read the feedbacks by previous and existing workers of a company. To find your competitors and see what reputation they have.

2. Investment Planning

How much and when to invest, is an important business point. By analyzing your competitors’ current investment, you can plan how much you should investment and which strategy you will apply.

Google Finance is a great tool that can provide the latest information and news about a company. Just type your competitor and see that what is their position in marketing, how much they are investing and how much revenue they are generating.

PRO Tip: Tool like Awario can help you to track your competitors. Simply create an account (14 days trial available) and stay updated with interviews, brand mentions, social activities and much more.

b. Product Analysis

After the company’s overall analysis, be ready to dive deeper. Now we will analyze the product(s) of the competitors and try to improve our products based on the collected data.

1. Product Features?

In product features, you have to analyze the worth, price and user satisfaction from your competitors’ products.

Following are the questions whose answers can make your product feature research better:

    • What is the price range of your competitors’ products?
    • Sales volume and market share
    • Are your competitors using any unique marketing strategy to sell more?
    • And, buyers’ reviews

After this research, ask yourself how you can improve your product/service in term of quality or representation.

2. Pricing & Freemium

Reducing prices is a very common method to take a lead over your competitors and increase your market share. You have to think in analytical terms that how can you decrease the prices without reducing the product quality.

Here another strategy that works is a limited-time discount. But, before you decide to reduce your product price or any discount, see the historical data of your competitors and understand their pricing over the year. Maybe it will be hard to find the price that your competitors offered while launching the product but you can find the seasonal discounts data easily.

Another good trick is to use A/B testing. For example, if you offer weekly, monthly and annually services than offer a maximum discount for monthly and yearly plan and see how your sales graph moves.

3. Efforts & Results

In the efforts and results section, there are mainly 3 noticeable questions.

    • What does the product preparation cost?
    • Marketing budget to generate targeted sales
    • What was the result?

If you ask me one line about this section than I would say that you have to measure the invest that your competitors do and the result that they gain.

This analysis is very helpful for startup and you will get the whole idea – from invest to plan and output. The next job is to be creative and think about improvements.

c. Marketing

Marketing plays a vital role in the share of voice of any company. The better you will present your product, the more sales you will generate.

In this marketing section, I will tell you different marketing channels that your competitors can use.

1. Brand Collaboration

Brand collaboration is a popular way to get some instant sales. In brand collaboration, a new company asks a good brand to collaborate and to sell their products along with their own. Both collaborators cannot be direct or indirect competitors of each other.

For example, Milk & tea bags both are required to make tea so if Nestle powder (milk/tea whiter product company) is not getting enough sales than then can collaborate with Lipton (tea company). Lipton will give Nestle powder milk along with tea packets.

I have seen the collaborations of these two companies in many regions. You may have seen such collaborations by different companies.

It is hard to find if your competitor is collaborating or not. Google might be helpful but you have to look for their recent advertisements. Additionally, visit their website to look that either they are in collaboration or not.

2. Content Marketing Methodology

Digital presence is very important even if you are a physical production company in a specific region. If your competitor has a blog and they regularly publish content then you also have to do it.

SEMrush SEO & SEM can help you to analyze the whole site of your competitors. You can find that on which keywords they are ranking and content gaps between multiple competitors.

3. SEO

Analyze how much traffic your competitors are gaining from search engines. You can spy on popular keywords that are sending traffic to your competitor’s sites and finally make your plan to get a spot in search results.

Once again SEMrsuh SEO tool will help you to analyze the SEO of your competitors.

4. Paid Advertising

Paid advertising has further many types such as search engine ads, advertising on Google’s partner sites (display ads), and social advertising.

Luckily, SEMrush tool gathers all the advertising data of sites. You simply have to provide the URLs of your competitors and it will show you the past advertising history.

5. Influencer Marketing

Brand new miss influencer marketing. Influencers have a narrow and hence most targeted audience so; this advertising will be cost-effective.

6. Unique Offers

On your competitors’ sites or ads, you can easily find what they are offering to new customers. Discounts and “some more” are offered by every business. Look that either your competitor is doing something unique.

For example, Divi the popular WP site builder gives their builder for free if you a user purchases hosting from BlueHost from their referral link. This marketing trick looks something different.

d. Customers Satisfaction

This is another important part of competitive analysis. You have to know the buyers’ feedbacks. Buyers feedbacks will let know the mistakes and weaknesses of your competitors toward the products. Finally, you can make your products better as per users demand.

A tool like Awario can be helpful in this research or you can research forums, social sites and especially reviews sites like TrustPilot.

Social advertised posts are also helpful to know the buyers’ feedback. In the comments of advertised posts, you can see that was users are saying and why persons are ready to become their customers.

Let’s talk about buyers in details.

1. Geography

This analysis is only for those companies that are working in multiple locations and offer physical products or services.

In geography competitive research, find the answers to the following questions:

    • In which region your competitor (individual) is the most popular
    • In which region they have lost their authority

Remember, in geographical terms, you have to analyze each competitor individually. Write down the data on a paper. Finally, your job is to find the reason for the good or bad authority in each region. This analysis looks quite silly but believes me; you can find a way to capture a specific region quickly.

2. Unhappy Buyers & Company’s Response

In August 2020, I purchased Toonly – an animation tool. They were offering a limited time $67 offer for life-time account. The marketing and the product too both attracted me and the feedbacks on advertising campaign were also good.

I purchased and start testing it but on the 2nd day, I realized that Toonly does not support animation of the objects that we upload from outside. We can only animate the Toonly’s available objects. This was embarrassing from me and I contacted support for money-back.

Here comes the point to be noted, although they were agreed to return the money they offered me their 2nd plan with only $20 additional charges (Normally they were charging $40 for the 2nd plan). They also offered me popular 2 e-Books about animation hacks.

Have you noticed how Toonly tried to deal with me while I was unhappy? Although I rejected the offer this is a good way to deal with unhappy customers.

Being a business owner, you must have similar strategies.

3. Audience Retention

I think audience retention is the most suitable metric to measure the success of any company. The higher the audience retention rate will be, the better the company’s reputation will be.

This metric has a huge impact on gaining new customers without any advertisement or effort. Returning buyers are simply your brand ambassadors and will recommend you when someone will ask for a suggestion.

Social listing tools like Awario can help you to know the brand mentions.

Conclusion

Hopefully, I have provided all the possible information and you have found it useful. I am sure after analyzing competitors you will find lots of data to improve your company, products and marketing.