What is Competitor Analysis?
Competitor analysis is a very crucial marketing strategy that in essence involves you discovering first who your competitors actually are, then analysing them to discover the strengths and weaknesses of both current and potential competitors. Analysis of your competitors is very effective, providing strategic context to both offensive and defensive parts of your competitor's campaigns. This allows you to establish a base for your own campaign.
It shows you a wide array of marketing opportunities and the threats incoming from your opposition. The good thing about this is that the biggest threats are also the biggest source to learn from. If you can do what your most competitive adversary can but improve it, even very slightly, then you are doing a better job of digital marketing than they are.
Why Would I Benchmark?
The general purpose of doing benchmarking is to attain an insight on what your competitor’s are doing well, and it allows you to evolve your strategy based on this. This is in no way something that you should be lead entirely by, and what you learn about your competitors does not warrant an instant, rapid reaction. Doing this and changing your campaign in a very reactive way based on your opposition can often do more harm than good. Knowledge is power, and knowing how you stand when directly compared to your competition is very helpful and allows you to better identify your longer term strategy, which, in turn allows you more control and power over your strategy.
Benchmarking also allows you to very quickly identify how your own campaign is going; it allows you to actually see how each change you have made to your campaign has changed your traffic, statistics
and conversion rates
. You can see these changes in real time, and it opens the opportunity for you to see whether a change to your strategy may have effected it negatively as well as positively, this is helpful due to the fact that you can easily identify a change that has made a negative impact on your campaign giving you the chance to revise it sooner rather than later.
How to Rank Your Competition
When you have identified who your competition is then ranking them is very important. The basic way to do this is write a list of your products or services then write your competitors products or services on the same piece of paper and just see how many of them are the same. This is the most basic way to identify who else is directly competing for your customer’s cash, but it very quickly allows you to identify what your customers would be buying if they were not using your products or services.
When you evaluate your competition you should ask yourself a few questions to ensure you are considering all the points of your opposition. You should try to answer more than this, but here are a few good questions to ask:
- Who actually are your competitors?
- Are the products/services that they sell similar to mine?
- What are their strengths versus their weaknesses?
- What opportunities do they hold for me?
- How much of the market to they hold?
- What are their past and current strategies, and what was effective about them?
These are good questions to ask as a baseline as they allow you to identify the bigger competition to the smaller competition. It also allows you to get a good idea of where your company stands compared to the others in the market.
What Can Go Wrong?
Competitor analysis can rarely go wrong, however there are a few things which would deem it as substantially unhelpful and therefore time wasting. When you do compare and analyse your competition it is always important that you have a defined purpose. If you are investing the time and the effort into analysing the opposition, then why are you doing it? There should be an end goal, for example wanting to improve something on your service that your competition do well.
Another shortfall of this is the fact that many people do not know even a tenth of the tools and resources there are for analysing the competition. Nowadays there are plenty of very good tools that are cheap, free or trial based so do some reading of what the best tools are before carrying out competition analysis with no real idea of what to use.
Remember that this process is ongoing, and is not effective in any way if it is not done regularly due to the fact that companies change their strategy and update it many many times a year. Also when analysing other companies it is important to realise that they are much the same as you, and as such they are likely doing a very similar thing to you. This is why it is important to keep your campaigns as up to date as possible, and to evolve with the market you’re in.
Finally some organisations and business carry out competitor analysis then it sits on a shelf. It’s read for only statistic purposes and no direct action is implemented from the data discovered. If you carry out this analysis then you should ideally be prioritising actions and updates from what you have learned from the report. After this you should also be analysing very closely if your changes have made a positive or negative impact on traffic and custom. Remember doing this regularly and updating your campaign often is the best way to create an ever increasingly effective campaign, and will allow you to stay on top of the market. The more you know about your competition and your market, the less you’ll be surprised by any updates or changes, and the better equipped you’ll be to instantly recover from any market changes.
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