Competitor Analysis is the process of researching about your competitors- their products, USP (unique selling proposition), strategies and market share. Competitor analysis helps businesses to stay updated with their competitors and the environment around them.
Further, competitor analysis can help a small business to understand the market trends, understand their weaknesses and strengths. Businesses can review all their rival businesses and device strategies to tackle and find new opportunities.
It is said that most businesses don’t perform this type of analysis systematically enough. Instead, many firms function on what is called “informal impressions and intuitions derived through the broken information about competitors every manager continually receives.” As a result, many firms are at a risk of dangerous competitive blindspots due to a lack of proper competitor analysis.
Now let’s see how we can do a competitor analysis in few easy steps.
In the end, we have presented you with an example ‘Competitor Analysis’ of our company ‘Ice Age’.
Find your competitors :
The first step would be to find who your top 3 competitors are in your segment. Although there may be over a hundred competitors of your business, you need to find the ones which closely share the same type of audience and market as you. Further, the price range which they offer should be close to yours. You can bifurcate these competitors into 2 groups:
1. Immediate Competitors
2. Future competitors.
You can simply Google your product name to find some of your competitors. For example when we googled ‘Ice cream in Kitchener’ we found a dozen different sellers which compete with our hypothetical business. We checked their price range and location to find our top competitors within a 25 km radius.
Read more: How to create your marketing strategy.
Understand their products :
The first step of any marketing strategy is to understand own products. And the second most imperative step of competitor analysis is to understand the products of your competitors.
1. It will include the value of these products at the price range that they are offered at.
2.The different price levels of the products and how they compare to your price ranges.
3.The market share of that particular business.
4.The channel of distribution of the products
5. You can also find out the return policy of the product, any type of services (Like warranty) that comes with the product and compare it with yours.
Ice Age’s competitors provide 3 different types of same Icecream Flavour. All have the same appeal but at different costs due to quantity. Basic Ice cream has 1 scoop, Intermediate has 2, and Advanced has 3 scoops. They are priced at $3, $4 and $5 respectively. Which are all $1 cheaper than Ice Age.
Explore the Sales strategies of your competitors :
To find out about the sales tactics of your competitors you need to ask these questions :
What is the distribution channel of your competitors? Do they only sell offline through their outlet or they have a Website too? Or are they using the services of an external E-commerce provider? Do they have affiliate programs or any discount offers running? How many staff employees do they have on their floor? What is the revenue or size of their business? Do they value their customers, employees or just focus on the profit.
These questions will help build better strategies to give your competitor a run for their money.
Ice age’s competitor ‘Flash Ice’ has a total of 10 employees and no online presence. They sell some of their products through UberEats. They offer discounts on their products every Monday between 2 pm to 6 pm. Their monthly Sales is $CAD 40,000. The company gives free lunches to all its employees and also a 1% share in their yearly earnings.
What do understand from this brief on Flash Ice? Tell us in the comments.
Read more: How to bring your Small Business online?
Explore the marketing strategies of your competitors :
In order to understand the marketing strategies of your rival, just visit their website or Business outlet.
Do you see any brochures? Any specific Buying guides? Any Bundling offers?
How do they advertise their products through local newspapers or magazines?
Also, do they write blogs or provide E-books? Do they any special deals for their first-time visitors?
What kind of content do they use? Videos? Images? Gifs?
What social media links do they have on their website?
Follow those links and become a subscriber of the rival. Add a product to your cart and leave it. Opt for their Emailers. Or you even buy a product to see their customer service.
Find out their content Strategies and Engagement:
Now you need to find out the type of content your competitors publish. Although this is not a very crucial task it will tell you how focused is rival in generating new leads and engaging current customers. In this step, you need to find the presence of your competitors on different social media platforms and their websites. Find out what kind of content do they publish? Do they publish blogs or Gifs or short videos? How often do they post on their blogs and social media accounts? What is the engagement rate? How many followers and shares do they have? Is their content accurate and researched? What is the tone of the content?
To understand how engaging their content you need to find out how their general audience is responding to it.
What kind of comments are there? Negative, positive or a mixed bag? Do the admins respond to audience queries?
Compare these observations to your own.
For example, Ice Age has built a presence on Instagram by sharing photos of their icecreams and write a blog with nearby destinations & customer reviews to be featured on their website. Their frequency is 5 photos per week and 3 blog posts in a month.
Read more : How to generate great content
Tools that can be used :
since you know and understand every major step by now, its time to tell you about the tools that will help you. You can collect all relevant data through the following source:
1. Your competitor’s Social media handles, Website, google my business page:
Follow your rivals and collect all the relevant data. Prices, Contact details, brochures, Product descriptions, Partners, Location info etc.
2. Facebook Insights :
Facebook Audience Insights can give you a plethora of information about audiences. For many established competitors, you can even see the breakdown of their Facebook page’s followers, including age, gender, and location. Using these resources, you can start gathering data. And putting it into your competitive analysis template so that your findings are all stored in a single, organized space.
3. Uber Suggest :
Ubersuggest is a free SEO tool that specializes in generating new keyword ideas. Originally founded as a tool that scraped Google Suggest terms. It can help you understand how your competitors rank on search engines.
4. Physical visit to the Store :
This is hands-down the best possible way of finding out more about the physical attributes of your competitors. The value they give to their customers, services, checkout time, product placement and merchandising.
We have attached a sample template for you to work on your Competitor Analysis. We are available if you have any questions for us.
|TOPIC||My Company||Competitor 1||Competitor 2||Competitor 3|
|Type (Direct, Indirect)|
|type of Offerings|
|Key competitive advantage|
|Sales channels/where they sell|
|No. of products|
Remember, as markets are dynamic so is competitor analysis. Formulate proper action plans after gaining proper data and factor in all environmental changes. We hope with the above-mentioned process and tools you will be able to do the process more efficiently.
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