A competitive analysis will reveal how you can stand out and pull ahead. We show how you can do your own.
Whether it’s a rivalry between football teams or neighbors competing for the greenest lawn, we’re quite familiar with competition, and if you’re a business owner, this is especially true. While many assume that without competition their business would thrive, competition can be an entrepreneur’s greatest asset, as it can lead to greater innovation, quality, and focus. But you need to know who you’re up against, and a competitive analysis can help.
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What is a competitive analysis?
Hubspot provides a useful and thorough explanation of a competitive analysis (also sometimes referred to as a competitor analysis):
Given this description, it should be clear that a competitive analysis is a critical step in the development of any marketing plan. A comprehensive analysis can help you strategize your marketing efforts to effectively reach your intended audience in ways your competition isn’t.
Pro tip: Analyze your own business by conducting a SWOT analysis.
How do I conduct a competitive analysis?
While conducting a thorough competitive analysis of a large company can take an immense amount of time, effort, and money, a small business owner competing with other small business owners may not need to devote as many resources.
To begin, you’ll want to break your competitors into three separate groups—current, potential, and secondary. Of your current competitors, you’ll want to know:
- What products or services do they sell?
- What are their objectives?
- What are their strengths and weaknesses?
- What marketing strategies do they currently utilize?
- What potential threats do your competitors pose?
- What potential opportunities do they make available to you?
When it comes to gathering this information, it’s simpler than you might assume. Begin by studying their website and, if possible, their brick-and-mortar location. Note what stands out to you, both good and bad. Talk to customers and, without being too obvious, the employees you have access to. Make a purchase so you can evaluate their product or service at your leisure.
Next, study their marketing in detail. Consider all the channels they use, including direct mail, email, and social media. Sign up to receive their mailings, subscribe to their blog, and follow their social media accounts. Take your time and inventory the appeals they use, the needs they claim to meet, their value proposition, who their ideal customer is, and their branding—go as deep as you can to find what makes them appealing. Do what you can, when you can, but do it. Once you’ve completed your analysis of your current competition, move on to potential and secondary ones.
Find a way to stand out
At the risk of coming across as self-serving, we’re a marketing company specializing in helping small business owners and entrepreneurs optimize repeat and referral business. We offer automated print and digital marketing with unrivaled quality. Our flagship product is our personally branded magazine. They’re a highly unique approach to marketing that recipients perceive as a gift. Get a free PDF copy sent to your inbox, and if you like what you see, visit our website to learn more.
The takeaway
While performing a competitive analysis takes time, you may recoup your effort by spending less time guessing what marketing strategy will put you ahead. Rather than making stabs in the dark, you can approach your marketing with an informed, justifiable strategy.
