Building a successful business requires offering products that stand out among competitors on the market.
In order to craft these distinctive offerings, you must know who exactly you’re in competition with and what they’re offering. Although not all businesses can afford to hire a professional to do a competitor analysis, you can do it yourself with a competitor monitoring software tool and create your very own competitor analysis.
Below are some tips to get you started.
Identifying Your Top Competitors
You don’t necessarily have to list down every possible competitor in your niche; identify the top 10 and go from there. You’re probably aware of local competitors, but if you are still unsure, search Google and social media.
When identifying your main competition, consider those with the same size and scope as your operations. Once you’re done listing them down, write a description for each of them explaining why you consider each one a main competitor. Don’t forget to write down their basic details and offerings.
Collecting Relevant Details About Your Top Competitors
Now is the time to put your research skills to work. At the very least, research the following information:
Services and/or Products – Assess your top competitors’ offerings so you can compare them to what you’re offering. When evaluating your competitors’ offerings, check out the quality, certain features that you consider pros and cons, and where they make or source their offerings.
Prices – What do you think about the prices of their offerings? Are they fair or not? Does pricing differ for customers and channel partners? Do they have a discount policy? Are you able to estimate cost their pricing’s cost structure?
Market Reputation – For this one, reach out to your competitors’ customers, distributors, partners, and suppliers. Specifically, try to find out their opinions on your competitors’ offerings, customer service, marketing tactics, and sales practices.
Branding and Positioning – Check out your competitors’ websites, social media, catalogues, brochures, and product documents. Figure out their USP (unique selling point) and target market.
Evaluating Your Top Competitors’ Weaknesses and Strengths
Having a written assessment of your main competition would enable you to compare your performance with theirs. Focus on listing down every weakness and strength you can think of. This assessment would give you a clear idea on how you may be able to adapt your approach to leverage their weaknesses and counter their strengths.
Determining Your Competitive Advantage
Once you have thoroughly analyzed your competition, you’ll be better equipped to determine what your competitive advantage is. In general, your competitive advantage must be something distinctive that will appeal to and answer your target market’s pain points. This will aid you in creating your brand image and messaging.
Done right, your competitive analysis report will be able to help you in your efforts to be the best among your competitors. Knowing exactly how your business stacks up against your competitors enables you to make wiser decisions and employ more tactical improvements in your organization.