HOW TO CONDUCT COMPETITOR ANALYSIS
By Ayoade Apelegan
As a business owner, it is important to acknowledge the presence of your competitors. Acknowledging the presence of your competitors amongst other things helps;
- You to understand who your target audience is
- To know your position in the marketplace
- Distinguish your business from those of your competitors.
- You to determine the future direction of your company.
- Provide executives with handy information for easy decision making.
- To know the steps needed to be the leader in your industry
The best way to acknowledge the presence of your competitors is by conducting what is known as Competitor Analysis.
What is a Competitor Analysis?
Competitive Analysis aims to obtain information necessary to develop a business strategy. Information gathered during the process of analysis helps put your business on the right path. Competitive Analysis helps a business be on top of its game and gain a competitive advantage in its industry.
According to Marko Saric, a digital marketing consultant, “Competitive analysis is the research you do to dissect, learn more about and access the strengths and weaknesses of your competitors.”
Competitor Analysis is a document that evaluates the strengths and weaknesses of your rivals.
STEPS TO CONDUCTING A COMPETITOR ANALYSIS
Knowing who your competitors are and what they offer can help you make your products and services stand out. As a business owner, you need to be able to identify your competitors. Your competitors are those other businesses/firms that offer the same products and services
Types of Competitors
Direct competitors / Primary competitors
These are those businesses that not only offer the same service or products as you do but also operate in the same geographical area as you do. Their products and services basically could pass as a similar substitute for yours.
As an example, if you sell bottled water and your product is available in a particular area or market, your direct competitors are the business who also sell bottled water and have their products in the same area or market as you do. The bottled water is basically of the same price and both are targeted at the same group of people.
Indirect competitors / Secondary competitors
These are businesses who offer slightly different services or products (at other times, the products or services could be the same or similar) as you do, and also operate in the same geographical area as you do, and also operate in the same area, but who are serving a different need or purpose or targeting a different audience. However, the products could satisfy the same customer need or solve the same problem.
The third type of competitor is known as a tertiary competitor. Tertiary competitors are related brands who may market to the same audience, but don’t sell the same products as you or directly compete with you in any way. They may be potential partners or future competitors if they choose to expand their business. Even though tertiary competitors are not direct competitors, it is still important to keep tabs on them as any big changes or developments on their end could be beneficial to you.
How to identify your Competitors
There are various ways to identify your competitors; some of which are:
According to Wikipedia, Market research is “the process or set of processes that links the producers, customers, and end-users to the marketer through information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Market research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications.”
In using Market research to identify your competitors, market research aims to gather and evaluate information from the industry you’re operating in and the competitors associated with your product or service.
Among other things, market research seeks to answer the following questions about your business:
Who your customers are;
The appropriate time to sell your product or service;
Are there opportunities for expansion or growth within your market?
A chat with your sales team will reveal which competitors they encounter during their sales process. From the answers gotten from them, you’ll be able to take a closer look at those businesses, their products and marketing efforts, and create strategies to outperform them.
Market research can also be performed by conducting searches, reading trade journals, subscribing to your competitor’s newsletter and ‘stalking’ them on social media.
Customer feedback is information that a business gathers from customers, via questions and surveys, to gain a better understanding of the customer’s experience from using its product or service.
The way to solicit customer feedback to identify your competitors is during the sales process. During the sales process, your sales representative can ask your customers which other businesses or products they are considering besides yours.
Interestingly, these customers will reveal those competitors that you aren’t aware of their existence.
Keyword research is one of the ways to identify your competitors.
Keyword research can be defined as the process whereby popular search terms people type into search engines are researched and taken note of and you include these terms in your content so that your content appears higher on a search engine results page (SERP).
In conducting a competitive SEO analysis, businesses that are competing for space on search engines e.g. Google can be determined.
Some Keyword Research Tools are:
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Analyzing Search Engine Results Page
According to Wikipedia, “Search Engine Results Pages (SERP) are the pages displayed by search engines in response to a query by a user. The main component of the SERP is the listing of results that are returned by the search engine in response to a keyword query.
The results are of two general types, organic search (i.e., retrieved by the search engine’s algorithm) and sponsored search (i.e., advertisements). The results are normally ranked by relevance to the query. Each result displayed on the SERP normally includes a title, a link that points to the actual page on the Web, and a short description showing where the keywords have matched content within the page for organic results. For sponsored results, the advertiser chooses what to display.”
From the results that are returned by the search engine, you can create a list of your competitors, identify keywords that are peculiar to your business offering for further actions.
How to perform a Google search for your keyword.
On the internet, prospective customers will search for your business through a simple search like ‘<service you provide> + city name,’ so you might search “auditors in Lagos” or “Lagos auditors” to start with.
To identify your competitors, you will take note of the top businesses which show up in your search, including the ones which show up in the advertisement section at the top of the page and in the map section for each of your keywords.
Make a list of your competitors
After identifying your competitors, the next step is to create a list of the competitors to be analyzed.
Creation of spreadsheet or Table
You will need to create a spreadsheet or table which you will be used to record the criteria you want to compare and contrast. Reason for creating a spreadsheet is that it can be updated and shared over time.
Data collection via tools
After identifying your competitors, and determining those competitors you will be studying, the next step is to dive into research and data collection for your competitor analysis.
Various tools can be used for competitor analysis, some of which are:
SimilarWeb is a website which provides web analytics services for businesses. The site offers its customers information on their clients’ and competitors’ website traffic volumes; referral sources, including keyword analysis; and website “stickiness”, among other features.
SimilarWeb also offers insights into estimated monthly visits and key traffic sources for a website. Estimated monthly visits and key traffic sources help you identify where your competitors are focusing their marketing efforts.
Mailcharts helps you track and understand how your competitors use email marketing. From the frequency of email sent their subject line tactics, and more.
Buzzumo is a research and monitoring tool. It is used to find content that is most shared on social media channels. With this tool, you can discover websites that also produce content related to yours.
Besides helping you identify audience demographics and search rankings related to a website, Alexa also does the following;
SEO keyword opportunities, including keywords that are driving traffic to competing sites, but not yours. Find your next content idea and incorporate it into your strategy.
Competitive benchmarking, including how your site’s traffic from search, keywords, and backlinks compare to that of your biggest online competitors.
Website traffic statistics, including Alexa Rank, engagement metrics, referral sources, and more for any site in our database.
Audience insights, including sites that share an audience with your site, topics your audience cares most about, and keywords they search for.
Facebook Audience Insights
Facebook Audience Insights is accessed through your Facebook Business Manager. Facebook Audience Insights provides a variety of information about audiences on the largest social media platform in the world. For many established competitors, you can even see the breakdown of their Facebook page’s followers, including age, gender, and geography.
Using these resources, you can start gathering data and dropping it into your competitive analysis spreadsheet so that your findings are all stored in a single, organized space.
Ahrefs is an SEO software suite that contains tools for link building, keyword research, competitor analysis, rank tracking and site audits.
SEMrush is a tool that provides intelligence data including website traffic information, keywords, projected AdWords spend, site audits, topic research, lead generation, and other SEO-related data.
Another tool that can be used for data collection is Popsters. Popsters is also a tool used for analyzing the content of competitors as well as the reaction of subscribers on social networks.
It can easily help you to analyze any pages in more than 12 popular social media and find out the most popular and commented publications (+ with the highest engagement rate). You can easily filter and sort posts (publications) using multiple filters.
Study your competitor’s marketing campaigns
In studying your competitor’s marketing strategy, you need to view their website and social media pages through the eyes of a prospective customer. This gives you an insight into the things you need to put in place on your website as well as your social media pages. Things to note from your competitor’s website are the process of ordering a product or service and the responsiveness of the website amongst other things.
Studying your competitor’s customer acquisition and customer retention tactic will not only give you an idea of how to go about your own but also how to improve in the process of customer acquisition and customer retention.
Next, take a look at your competitors’ social media pages. Study the pattern of their content strategy on social media. Look at the contents of what they’re posting and how much engagement they’re getting on each one of their posts. The pattern of the write-up, types of pictures they put up, interaction with customers, etc., All these need to be studied and incorporated into your social media pages.
Signing up for newsletters
When you sign up for a competitor’s newsletter, you will have an idea of their business and modes of communication. You get to know what products or services are in the pipeline for launch. This gives you an idea of how to react when your competitor’s launch a new product.
Subscribe to and follow their blog: See what types of content they are covering.
Follow them on Social Media
Social media platforms like Facebook, Twitter, Instagram, and Pinterest can be searched for keywords that relate to the service or products you offer. Your competitors probably have a social media page where they post updates about their services.
These social media platforms have ‘search boxes’. These search boxes will serve as tools to help you identify your competitors.
Assume the role of a potential customer
In addition to using data collection tools to gather information about your competitors, you will also need to assume the role of a prospective customer to witness firsthand how your competitors are doing. This can be done in the following ways:
- Purchase a product or service to be able to compare such product or service with your offering
- Communicate with the customer care representative to have an understanding of how issues are resolved.
- Abandoning an item meant for purchase in the cart: this helps you monitor whether or not they send an abandoned cart email series.
Performing competitor SWOT Analysis
Source of Image www.wordwordstream.com
In the process of evaluating your competitors, you need to find answers to the following questions:
- What does your competition do well?
- What are they known for?
- What attracts customers to them?
- Why do customers ultimately end up purchasing from your competitors?
- What do your competitors’ customers regularly complain about?
- What problems have you experienced when you “shopped” with them?
- What products or services should they offer but don’t?
- Are your competitors doing anything that presents an opportunity for your small business?
- Have they stopped carrying any products?
- Have they changed any of their services?
- Is your competition doing anything that presents a threat to your business?
- Have they lowered their prices recently?
- Are they offering new products or services?
- Are they moving to a new location closer to you?
- Negative media/ press coverage?
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Product offering and price analysis
Product offering Analysis
Compare your competitor’s product offerings and the value each product offers to customers with your product offering. Look at the similarities in the prices and values of the product offerings.
Pricing and Average Selling Price (ASP)
Your price doesn’t necessarily have to be lower than that of your competitors. However, it should fall in the same range and serve the same market.
Determine the minimum prices being offered by your competitors, also determine the average selling price. Payment policy, and how discounts are given should be studied.
Financial records and reports
A company’s financial report contains a lot of information that can be useful in analyzing it.
You get to have an idea of their revenue and profits and see how the various products or services contribute to the revenue.
Financial reports of privately-held business can be gotten through friends, relatives, and business acquaintances.
Market Share analysis
Market share is the most widely used measure of sales performance. Market share analysis is a part of competitor analysis and indicates how well a firm is doing in the marketplace compared to its competitors. Market share represents the percentage of an industry or a market’s total sales that is earned by a particular company over a specified period.
The formula for calculating market share: Divide the target company’s total revenue by the entire industry’s total market sales for the same period.
Website content analysis
In addition to being a source of information, websites are also marketing tools for businesses. Surfing through your competitor’s website gives you an idea of the latest news concerning their business operations. Information gotten from their websites can be compared to yours and you can make changes as appropriate.
Search Engine Optimization (SEO) analysis
Search Engine Optimization analysis can help a business make strategic decisions to improve its site’s ranking in search engine results pages. Businesses can utilize SEO analysis results to help it rank higher, expand their reach, and drive traffic to its website.
Knowing how your competitors are performing SEO-wise is also important.
Some Search Engine Optimization analysis tools are;
- Check My Links
- Google Search Console
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