Competitive Analysis: How to conduct a competitor analysis

A competitive analysis is an essential part of market research that helps you to understand your competitors’ products, marketing strategies, and sales. 

It also helps you identify opportunities to promote your business, innovate, enhance your products or services, and outperform your competitors. With competitive analysis, you can identify where your business is doing well, where improvement is needed, and which market trends you need to get ahead of.

In this article, we are going to learn two effective ways of doing a comprehensive competitor analysis. 

PART A: DIY; Steps to conduct competitive analysis for your business.

To conduct competitor analysis, follow the steps listed below.

• Identify who are your competitors.
• Determine their products and service offerings.
• Research your competitors' sales strategies and results.
• Observe and analyze your competitors' pricing.
• Ensure you're meeting competitive shipping costs.
• Analyze your competitors’ marketing strategies.
• Analyze your competitors' content strategy.
• Learn the technology stack of your competitors.
• Analyze the engagement levels of your competitors’ content.
• Observe their social media presence, strategies, and go-to platforms.
• Undertake a SWOT Analysis to learn their strengths, weaknesses, opportunities, and threats.

Identify who are your competitors.

First, identify your direct and indirect competitors.

Direct competitors are businesses that offer services or products that are direct substitutes for yours, and that operate in your same geographic area.

An indirect competitor provides products or services that are not the same but could be used for the same customer need.

You should constantly check the indirect competitors since they could shift positions and cross over into the direct competitor zone.

This is one of the main reasons why you'll want to constantly run a competitive analysis. The market can shift at any time, and if you're not constantly analyzing the market, you won't notice these changes until it's too late.

Determine their products and service offerings.

Analyze your competitors' products and services. Consider the following questions.

• Are they high-cost or low-cost providers?
• Are they working mainly on one-off or volume sales purchases?
• What is their market share?
• What are the needs and characteristics of their ideal customers?
• Are they using different pricing strategies for online purchases?
• How does the company different from its competitors?
• How do they distribute their products or services?

Research your competitors' sales strategies and results.

It can be a bit difficult to run a sales analysis of your competitors. The following questions may help you.

What is their sales process?

What are their sales channels?

Do they have multiple locations?

Are they expanding their business or scaling down?

Do they have partner reselling programs?

What are their customers' reasons for not buying their products or services? 

What are their yearly revenues and their total sales volume?

Do they offer regular discounts for their products or services?

These questions will give you an idea of their competitive sales process. It will help you to understand the information you need to prepare your sales reps to compete during the final buy stage.

For publicly traded companies, you can find annual reports online. Deeper online research may help you to find this information for privately held companies.

Observe and analyze your competitors' pricing.

Different factors are used to correctly price your products or services. One of the major factors in understanding the pricing of your competitors for a similar product or service.

If your product provides superior features when compared to your competitors, you may decide to price your product at a higher price than the industry standards. However, you will need to ensure your sales team is ready to explain why your product is worth more.

You may also discover that there are gaps in your industry for affordable products. In such a case, you may aim at pricing your products at a lower cost and tap the unutilized market.

Ensure you're meeting competitive shipping costs.

According to research done by Statista in the USA,  expensive shipping was one of the reasons for cart abandonment. This is shown in the graph below.

 Today, free shipping is common for different brands. It is one of the major perks that can push consumers may choose one brand over others. If shipping is one of the major factors in your business; like ecommerce; ensure you analyze their shipping costs and ensure you meet those standards or exceed them.

If free shipping is offered by most of your competitors, you’ll need to consider that option in your business, if it is not practical, look for ways to differentiate in other ways; for example, include holiday discounts, loyalty programs, or giveaways in social media.

Analyze your competitors’ marketing strategies.

The fastest way to analyze a competitor is to look at their website. Take note of the following:

• Do they write blogs?
• Are they creating ebooks or whitepapers?
• Do they post webinars or videos?
• Do they have a podcast?
• Do they use static visual content such as cartoons and infographics
• Are FAQs sections there?
• Do they have featured articles?
• Are press releases there?
• Do they have case studies?
• Do they publish data sheets and buying guides?
• What offline and online advertising campaigns do they run?

Analyze your competitors' content strategy.

First, analyze the volume of their content. Do they have small blog posts or several hundred blog posts? How many white papers and ebooks are there?

Next, identify the frequency of their content. Do they publish new content each week or once a month?

When analyzing the content, ask yourself the following questions:

• Is their content accurate?
• Are there spelling or grammar errors?
• How in-depth is their content? 
• Which tone do they use?
• Is the content structured for readability? (Are they using  bold headings, bullet points, and numbered lists?)
• Is their content available and free to anyone or do their readers need to opt-in?
• Who is writing their content? (One person? In-house team? Multiple contributors?)
• Is there a visible bio attached to their articles?

Learn the technology stack of your competitors.

Your competitors may have excellent communication and customer services, so learn the technology stack they are using and leverage them to build much better services for your company. You can use the Built With tool to research the tools they use.

Analyze the engagement levels of your competitors’ content.

To understand how the engagement levels of their content, you need to check how their audience responds to their postings. Check the average number of shares, comments, and likes on your competitor's content. Check: 

• Whether there are topics that resonate better than others
• Whether the comments are  positive, negative, or a mix
• Whether certain content has better readers' responses than others on Facebook.
• Check whether your competitor categorizes their content using tags and if they have social media share and follow buttons attached to their content.

Observe their social media presence, strategies, and go-to platforms.

Analyze the social media platforms your competitors are using. What kind of content do they post? Do they focus on driving people to their landing pages, leading to new leads? Or do they post visual content to promote brand awareness and engagement?

Undertake a SWOT Analysis to learn their strengths, weaknesses, opportunities, and threats.

As you analyze different components in your competitor analysis (sales, business, and marketing), perform a simplified SWOT analysis. That is, note your competitor's strengths, weaknesses, opportunities, and threats.

PART B. Hire a consulting firm to work on your project.

As you focus on the growth of your company, Primestart Research has a team of professionals dedicated to performing competitor and market analysis. Contact us to get started.