How to Conduct A Competitive Analysis
In the fast-paced arena of marketing, where businesses constantly vie for their target audience’s attention, staying ahead of the competition is paramount. A critical element in this strategic endeavor involves assessing your competitors.
Categorize Your Competitors
The first step to evaluating the competition is categorization. Divide your competitors into three categories: primary, secondary, and tertiary competitors.
Primary competitors have the same audience as you, offer the same product, or both. There are several other data backup companies geared at small businesses, so these are the competitors you’ll want to keep the closest eye on.
Secondary competitors are in the same areas as you but offer a higher- or lower-end version of your product or offer it to a different audience. In this case, companies that provide backup services for individuals or huge corporations would be similar, but they’re not targeting the same SMB audience as you. Another example would be companies that install in-house data backups — they’re not offering the same service, but they’re solving the same problem and competing for your customers.
Tertiary competitors offer related products and services to the same audience, so they might present partnership opportunities. In your case, a company that provides software for sending large files might be a good example. Keep in mind, though, that tertiary competitors can rapidly become primary competitors if they choose to expand — if the company that sends large files decides to offer archiving services, you suddenly have a new competitor.
Act Like a Customer
The next step is to examine their website, social media pages, and overall customer experience. What’s the best way to see how they treat their customers? By pretending you are one. Look for info on their websites, contact a sales representative, take a look at their support documents, and see how easy it is to sign up, then compare that process to your own company.
How does the photography and imagery on their site compare to yours? Do their CTAs lead to useful, relevant content? Are you prompted to sign up for their email list? What kind of promotions do they run? Sign up for their newsletter, read a few blog posts, and abandon a product in the cart to see how the company reacts.
Positioning and Pricing
While you’re reading up on your competitors, take a look at what their major differentiator is — both according to them and from what you can see yourself. If you are a B2B technology solutions company, for example, is the competition offering more intuitive software? Better data encryption? More rapid restoration of data in the event of a catastrophe?
A lot of companies’ major differentiator is price, so make sure you take stock of their pricing, too. Do they offer higher or lower prices than you? Do they offer discounts for long-term subscriptions that you don’t? Do they run promotions more often than you do? If you can do better than their pricing, great! If you can’t, you’d better bring something to the table that makes up for the premium cost you charge.
See What Customers are Saying
Finally, comb through reviews on Google, Yelp, Facebook, LinkedIn, Glassdoor, and anywhere else you can find them to see what their customers are saying. Remember, good reviews and bad reviews are equally useful. Take stock of what positive features are mentioned the most in the positive reviews, and look for anything the negative reviews have in common.
Finding patterns can help you inform your positioning. If the positive reviews talk about the product and the negative reviews talk about customer service, you might win over customers by putting your superior service front and center.
In business, knowledge is undeniably powerful, and knowledge to give you a competitive edge derives from a thorough evaluation of your competitors. Evaluating competitors to help shape your approach to the market is not merely an initial step; it’s an ongoing, dynamic process that keeps you finely attuned to the ever-shifting landscape of your industry. By continuously monitoring your rivals and adapting your strategies accordingly, you can maintain an edge, ensuring that your strategic positioning yields optimal results.