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Competitor Analysis

Your Step-by-Step Guide on How to Conduct a Competitor Analysis for Your Business


Not every company in town is like yours. Businesses that sell comparable goods to yours abound.

They both work in the same field. They both aim for the same market. In fact, their offering is strikingly comparable to yours.

You should therefore become proficient in competitive analysis. When done correctly, competitor analysis aids in locating weaknesses in the tactics of your rivals. At that point, you can carefully place your brand to differentiate it from the crowd.

What is A Competitor Analysis?

Analyzing your primary competitors' marketing efforts for strengths and shortcomings is a strategic business management approach known as competition analysis.

Once you've determined the advantages and disadvantages of your rivals, you may strategically position your own brand to attract customers and win them over. You take advantage of their flaws and learn from their strengths.

You gain a competitive edge by conducting a competitive analysis. It gives you the upper hand. Customers in your target market purchase from you, not from business competitors.

4 Benefits of Competitor Analysis

Smart competitive analysis has many benefits

1. Uncovering Gaps in the Market

You find gaps you can fill by studying the tactics used by your opponent. You get the chance to close the gaps and benefit, whether it's by traveling to an underserved area or developing a better pricing strategy.

2. Benchmarking Your Performance

Every sector and niche has expectations that you must fulfill in order to participate, let alone succeed. You can learn about industry trends and benchmarks by examining the strategies and methods used by your competitors. Next, you compare your performance to that of your competitors or surpass them.

3. Improving Your Products and Services

Understanding your competitors is the first step towards winning in business. You won't be able to take home a sizable chunk of the market share pie if your goods and services are subpar. Observing what other people are selling can help you make improvements to your own goods. Customers will select a superior product over one made by a rival.

4. Fine-Tuning Your Unique Selling Proposition (USP)

In the end, your USP becomes the differentiator or deal-breaker when the quality of the good or service is evenly matched. A distinctive value that you guarantee to provide to your clients is known as a USP. It sets you apart from competing brands and influences consumer choice.

How to Conduct a Competitor Analysis in 6 Steps

Now let's examine the precise actions you ought to do in order to carry out a comprehensive competitive analysis that will provide you with a competitive edge.

The following six components make to a strong business rival analysis.

Step 1: Identify Your Competitors

Finding your competitors is the first step in any competitive study.

Your competitors in business are not the same. They are shaped and sized differently. Direct and indirect competitors come in two varieties:

Direct Competitors

These are your competitors in the business world, offering similar goods and services. Customers would assume you are the same business because you sell the same products, regardless of your name and branding. For example, the toy store across the street is a direct competitor if you sell toys.

Indirect Competitors

Indirect competitors don't offer goods and services similar to yours, in contrast to direct competitors. However, they cater to the same target audience as you do.

Assume you are a burger vendor. The nearby hotdog stand is an oblique rival. People who are hungry can get their fill on your burger or hotdog and wind up not buying from you.

Tertiary Competitors

A brand that caters to the same customer base as you but doesn't directly compete with you or sell your products is known as a tertiary competitor. However, in the future, they could turn into your rivals.

Compile a list of competitors vying for the same market.

Here’s how:

  • Type your product name into Google and analyze the top-ranking brands on the SERPs.
  • Go to review websites in your industry and note the leading brands mentioned in customer reviews.
  • Note the brands that your target customers keep mentioning on social networks.
  • Pop the name of your major competitor into a competitive intelligence platform to see other competitors in your industry.

Competitor SWOT Analysis

SWOT is an acronym for:

  • Strengths
  • Weaknesses
  • Opportunities
  • Threats

Your assessment should include everything on competitors’ websites: their content, search engine optimization tactics, pricing, positioning, sales, shipping, and more.

Ask yourself:

  • What do they do well?
  • What are the weak areas in their processes?
  • What are they missing so you can take advantage?
  • In what ways are they are a threat to your own business?
  • How can you use your strengths to counter the threats you identified?
  • What steps can you take to exploit competitor weakness?

The whole idea is to gauge your strong and weak points against your competitors. Poke holes into their strategy to see how to capitalize and get ahead.

Competitor research helps you know:

  • Who the major players in your industry are.
  • What your competitors' strenghts and weaknesses are.
  • Which opportunities you can seize to gain a competitive advantage from.
  • What standards you must meet to stay competitive.

Step 2: Analyze Your Competitor's Website Traffic

Having a website is an important part of having a modern business.

Your website is where all of your online marketing starts and ends. You get people to it, build trust, and make the sale there. You won't be able to compete if your website doesn't work.

That's why it's important to carefully look at the websites of your rivals.

The important question:

Where are they getting their traffic from?

When you do a website competitor research, the first thing you should do is look at where their visitors are coming from.

When you run an online business, nothing happens until you get the right people to visit your website. 

Not a single thing.

This could make you wonder what "relevant traffic" really means. Traffic is made up of people who are in your target group or who would make good buyers. These are the people whose problems your service or product fixes. They're more likely to buy.

It comes from 4 different types of sources.

Organic Traffic

These are people who find your site through a search engine like Google, Yahoo, or Bing. You can tell your competitors are good at content marketing if they get a lot of free traffic to their sites. They make great material that pleases the needs of the people they want to reach. They show up at the top of search engine results pages (SERPs) when people look for information about the business.

Paid Traffic

Paid traffic refers to people who come to your site because they clicked on an advertisement you paid for.

Examples of Pay-Per-Click (PPC) ads include:

  • Search ads
  • Display ads
  • Re-marketing ads
  • Video ads
  • Social ads
  • Amazon ads
Direct Traffic

Direct traffic is when people who might buy from your business type its name into a search engine's search bar or use browser bookmarks to find it. Someone could also type the brand's URL into their browser.

These people go straight to a website without going through a second source. Then what's the big deal if your rivals are getting leads?

Just one thing.

They've become well-known names. Either people have used them or heard about them through word-of-mouth marketing (WOMM).

Referral Traffic

This is referral traffic, which is people who come to your site from somewhere else, like another website. Because it's indirect, it's not the same as straight traffic.

People come to another site and then click on a link that leads them to yours.

Competitors who get a lot of traffic from referrals know how to use organic marketing techniques such as

  • Guest posting on leading industry sites
  • Being active and helpful in industry forums
  • Publishing content on industry review sites
  • Getting the company listed in online directories
  • Publishing and distributing strategic press releases
  • Building backlinks to high-traffic industry sites
  • Creating linkable content other sites link to or quote
  • Becoming active on social media networks
Email Traffic

Refers to people who visit your website after clicking on a link in an email you sent to people who have signed up for your list.

Does the rival get a good amount of email traffic?

Their secret is writing letters that people want to open and click on.

Their readers love the newsletters they make, which are both useful and fun.

Social Traffic

Social traffic comes from sites like Facebook and Twitter.

Facebook, Twitter, Instagram, TikTok, and LinkedIn are a few of these. In the next part, we'll talk more about social media efforts and traffic.

This image does a great job of adding up all the sources of web traffic.

There are two main goals of traffic analysis:

  • Find out what sources of traffic your rivals are using and build on those strengths.
  • Find the sources that your rivals aren't using and make the most of them.

Here are some tools that you can use to discover your competitor's website and traffic secrets:

Alexa

Useful for insights into a website's stats, traffic sources, and competitor numbers.

Ahrefs

This is a very powerful tool for keyword research, competitor backlink analysis, traffic statistics, and traffic sources.

SEMrush

Great for SEO, content marketing, PPC, competitor research, and social media marketing.

Similar Web

Use this tool to get a complete 360-degree view of your industry, competitors, and consumers.

Step 3: Analyze Your Competitor's Content Strategy

A content marketing plan is very important for eCommerce.

That's why you should also look at the content plans of your competitors. 

Look at the material that does the best for your competitors with Buzzsumo or a similar tool.

Just type the URL of your competitor's site into the search box and let the computer do its thing.

Within a few moments the system will show you the top content on the website.

Use this information to your advantage and dig into the details.

Ask yourself:

Which content type is popular on the site?

Is it list posts, ultimate guides, how-to posts, infographics, interviews, case studies, ebooks, videos, or original research?

How long are their posts?

On average, how long are the top-ranking competitors’ posts? You must match or beat their length to stand a chance of beating them.

Which headlines dominate on the site?

Do they use numbers headlines, how-to headlines, question-based headlines, fear-based headlines, best… headlines?

What sources do they quote often?

Do they reference trade journals, industry reports, authority niche blogs, or original research?

What kind of imagery do they use to support their points?

Is it stock photos, custom images, screenshots, videos, infographics, screenshots, presentations, pull quotes, data visualizations, or memes and GIFs?

What is special about their content?

What makes it different, unique, or more impactful?

What might be missing in their content?

Identify what’s missing from their content. To beat the competitor, not only must you match what they are doing, you must do more.

Which keywords are they ranking for?

What are the top keywords dominated by your competitors? Which viable long-tail keywords can you target to topple them?

What are their content distribution channels?

Which social media channels does the competition use to promote their content? How many shares do they typically get? Do they use paid promotion to spread their content far and wide?

You can't just read your competitor's blog to find answers to all of these questions. You need to read the text and break it down.

Step 4: Scrutinize Your Competitor's Pricing Strategy

Find out who your competition are? Yes, check.

Looked at the website of a competitor? Yes, check.

looked at their content strategy? Yes, check.

The next step in the framework for competitor research is to look into how the competitors set their prices.

Pricing has a huge impact on how buyers act. 

Someone who wants to buy something will often ask, "How much is it?"

So checking out how other people price their goods or services can help you set prices that will draw customers. By looking at prices, you can also get a sense of how the competition is doing. 

First, look at the pricing pages of your rivals.

Find patterns on the pages.

Competitor Pricing Analysis: 5 Key Factors to Implement

Here are 5 questions that you should consider about your competitor's pricing approach:

For service-based business owners, does the competitor publish their prices or keep them a secret?

What good things can you do with this information? For example, if your rivals hide their prices, you could make yours public so that people don't have to go through an extra step in the buying process.

What incentives do they use to entice buyers?
  • Free shipping
  • Expedited shipping
  • Discount coupons
  • Discount on next purchase
  • Money-back guarantee
  • Free set-up or installation
  • A free gift with specific purchase
  • Priority support
  • Free customization
How do they use copy on the sales page?

Weigh the copy they used to sell the product. How long is their copy? Do they include a FAQ section? How do they present the product benefits? How do they overcome potential objections? What’s the tone and style of their pricing page copy? e.g. level-headed, cheeky, casual, professional, or witty.

How do they structure their pricing pages?

Do they use pricing tables or product categories?

What is their SaaS products pricing strategy?

How do their prices scale? What’s the average monthly cost per user? Do they offer a freemium plan? What’s their most popular plan and why do users opt for it more than other plans?

If you know how much your competitors are charging, you can use a penetrative pricing plan to get into a market that is already very competitive.

You can get into a market by offering your goods and services at a lower price than your competitors. This is called penetration pricing. This helps you get into the market more easily and get more customers more quickly. As a new business, people are more likely to buy from you if your products are much cheaper than those of your competitors.

As soon as you have more customers, you slowly raise your prices. 

Are you going to charge more than your competitors?

Not a problem.

But you need to add more features to the offering and make it better all around. This will make people want to buy your new item. At the same price, it will be hard to get people to buy your product if it has benefits that are the same as those of your competitors.

It's even worse that you'll be a newcomer to the market. People would rather stick with names they already love than try a new one.

Step 5: Analyze Your Competitor's Funnel

This is the fifth step in the competitor analysis approach. It's time to look at the onboarding and funnel processes.

A funnel that gets a lot of sales is the key to running a successful business.

You should look at the channels your competitors use.

How?

Easy.

Follow them through the whole buying process. Become a customer of your rival. I know it sounds like a sneaky way to look at your competitors, but it really does work. Take a moment to think about it. How can you find out how your competitors make money without actually becoming a customer and living the life of your competitors? This method is the best.

What are you trying to find?

First, find out how people buy from you. How many steps do they usually take to go from being strangers to being happy buyers? Where are they from? When they're ready to pay, what pages do they usually look at?

To find out everything:

  • In one case, begin the buying process but do not complete it in order to learn how they handle follow-ups.
  • In another case, make the purchase to see how they welcome new customers.

Here is a paid traffic conversion funnel that illustrates an example.

Notice the two routes that lead to a sale—the direct route from the FB ad and the indirect route for those who didn’t buy the first time around via FB re-marketing.

Here’s a funnel example of a service-based business that starts with a free report.

Check off the following items on this list as you look at competitor marketing channels to get the most out of your competitor analysis:

  • Find out what kind of funnel your rival uses.What kind of funnel is it? Is it a cross-sell and upsell funnel, a social media funnel, a product launch sales funnel, a free advice funnel, or a webinar funnel?
  • Find the funnel's money-making spot.Find out whether your competitors make money on the front end or the back end of their funnel by looking at their competition analysis.
  • Find any holes or chances that got missed in the flow.Are there places in the tube where leads stop coming in? How can you close the hole when you set up your funnel?

Your competitive study of the funnel must also look at how competitors bring in new customers. A strong customer-hiring process makes the experience great for customers and makes them more loyal. In the long run, you make more money.

Check out how they treat new buyers.

Ask these 4 important questions in your onboarding competition analysis:

  • Do they have a welcome email series?
  • Does the company teach customers how to use their product?
  • Does the company have product walkthrough content?
  • Does the brand provide enough support to clients?

Step 6: Spy On Your Competitor's Social Media

Are you ready for the last step in the plan for competition analysis?

Spying on your rivals on social media is a surefire way to learn more about them. No, it's not the scary movie kind of job, but it is still a mission.

Join the social networks of your competitors to find out:

  • Which content gets likes, shares, and comments.
  • See which influencers they follow.
  • Pay attention to how often they post.
  • Dissect their popular posts to see how to improve yours.
  • Identify which social channel drives the most traffic to their site.

To make the job easier, use tools like Hootsuite and Sprout Social to keep an eye on your business on social media.

The whole process is about finding out what they're doing on social media and using that information to make your business stronger in the market.

Competitive Analysis Template

Here’s a competitive analysis template that simplifies the process.

Just fill in the blanks of the free template and you are good to go.

Competitive Analysis: Staying One Step Ahead of the Competition

That is how you do competitor analysis.

Use competitor intelligence to improve your strategy, position your brand in a unique way, and break into new markets.

Leave your competitors trailing in the dust by being smart with your competitor analysis.

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