Competitive analysis is an integral part of any business development. This is an ongoing process that spans many different areas of your business strategy. Regardless of your business type, you can single out five key points in each competitor’s analysis:
Which are the competition’s prices?
One of the most important points in a competitive analysis -either online or offline- is the comparison of prices. Check the competition’s products / services offered and the pricing policy followed. Is the competition cheaper or more expensive than your business? Try to understand why. Price is an important factor for the consumer when he sees the products next to each other.
Notice: this doesn’t mean that you should drop prices just to be cheaper than the competition. This would affect your profit margin and lead to long-term business losses. However, you need to know the difference so that you can adjust accordingly. For your research, price comparison sites will also help you, as well as visiting physical stores. Things get more complex when you provide services. Even so, you should know the competition’s price and benefit range.
What market share does the competition own?
Definitely, in a competitive analysis, you need to determine the competition’s market share. In order to achieve this, you must first know the market’s total sales and then work out an approach concerning the competition’s sales.
The overall market’s size can be found relatively easily, as data is available from institutions, chambers of commerce, etc. On the contrary, it is quite difficult to determine the competition’s share, especially if you are not a professional and need to collect data.
In digital marketing, we often use the data provided by Google related to the search term results that interest us, in order to understand the size of active demand.
What marketing strategy does the competition follow?
The competitive analysis also includes the marketing strategy analysis. The strategy followed by your competitor can reveal something really interesting about your own strategy. Examine how strong the competition’s presence is in the acquisition channels.
- Use the Facebook Ad Library to track its active advertising on Facebook & Instagram.
- Use analytics tools such as SimilarWeb to understand changes in traffic and acquisition channels.
- Follow social media and subscribe to the competition’s mailing list in order to receive updates on the designed campaigns.
- Use a web tool such as Pixida basic to understand where you stand in relation to your competitors.
Keep notes on what the competition thinks is important. With marketing competition analysis you may discover a new sales channel that you were unaware of, until now. Maybe you didn’t give the importance needed in a channel and eventually lost a business opportunity.
What is the competitive advantage?
Why would a customer buy from your competitor? Is it a matter of price? Is it the brand credibility created? You need to be able to collect all the information needed to understand what makes your competitor better than you or others.
The ultimate goal is of course to understand what you can improve in your business so that, at the end of the day, you stand out from the competition.
Which are the differences between your and the competition’s eShop/ Website?
Examine the entire customer experience that the competition offers: from the homepage to the completion of the purchase. Pay attention to the way the products are presented, the titles, the descriptions and texts used.
Competition Site Audit
You can use speed calculation tools such as Google’s Pagespeed insights to check the competition’s website loading speed. You can also use online SEO Audit tools in order to evaluate the website’s structure concerning SEO.
Finally, it is worth doing a technical check on the technologies and add-ons that the competition uses. This can be easily done with the free tool Builtwith which will give you all the necessary information that you can get from a simple navigation.
How do you write a competitive analysis?
Collect all the above, as well as any other information that you consider important to record about competition. The simplest way is an Excel sheet or a spreadsheet which you will fill in with all the necessary information per competitor.
Make sure to regularly update the data collected and highlight the points you consider important for improving your business.