Competitive analysis is something all entrepreneurs need to do. In short, it describes the process of keeping an eye on your competition and analyzing how your business compares. Through competitive analysis, you can identify other businesses’ strengths and—more importantly—their weaknesses. Then, using the findings, you can construct a gameplan to ensure your brand can compete against them.
Competition analysis is essential for anticipating changes in the market, identifying new trends, and spotting the kinds of marketing tactics your competitors have success with. All of this data is imperative if you want to stay up-to-date with what’s going on in your industry.
What Does Competitive Analysis Include?
Competitive analyses should detail the following about your competition:
- Their target demographic
- The size of their market share
- Their unique selling point(s)
- The main features and benefits of their products and/or services
- The price of their products and/or services
- Their shipping prices, deals, and strategies
- Whether they’ve received funding or venture capital
- The features on their websites
- Customer experience elements
- Their approach to social media, content marketing, and email marketing
- The kinds of customer reviews they’ve received
With the above information at your disposal, you’ll be able to see what’s currently separating you from your competitors so you can take concrete steps to help your brand stand out from the crowd.
How to Conduct a Competitive Analysis
- Create a spreadsheet and list ten of your competitors: You can find these by conducting a simple Google, Amazon, and/or Alexa search for the same products and services you’re selling. Focus your energy on competitors that sell similar merchandise, have a similar business idea, or target a similar audience as you.
- On your spreadsheet, list the kind of data you want to find (see the above factors for more details on this).
- Depending on your budget, you can use tools like Ahrefs and SEMrush to track your competition as time goes on. Or, if you have limited funds, use tools like SimilarWeb, Mailcharts, Buzzsumo, Alexa, and Facebook Audience Insights. These programs require little-to-no money to sign up to and provide the data you need to conduct a practical competitive analysis. With each nugget of information, plug it into your spreadsheet so you can build out your detailed competitive analysis.
- Track how your competitors market themselves by following their blogs and social media profiles, putting a product in their cart and clicking off of the page, and subscribing to their email list. Jot down your findings in the spreadsheet.
A Few Other Tips for Competitive Analysis
Competitive analysis isn’t something you do once and then forget about—instead, it’s an ongoing process. Otherwise, you run the risk of gathering and using incomplete data.
Brands are always updating themselves and making changes to the way they do things, so you need to constantly keep an eye on your competitors. Plus, it’s not enough to just conduct a competitor analysis, you also need to put your findings into action. Use the data you find to fuel your marketing efforts, improve the experience you offer customers, and enhance the overall quality of your customer support.