The Importance of Competitor Analysis
As a Digital Marketer, knowing what your competitors are up to is key to business success. It’s fair to say that there are no businesses out here that operate in a bubble without considering what people in the same industry are doing and how they’re operating. Therefore, Competitor Analysis is important and must be implemented if you wish for your business to grow.
What is Competitor Analysis
Before putting this into action, it’s important to know what Competitor Analysis is. It’s exactly what it says on the tin, which is analysing your competitors (in-depth). In simple terms, it is the process of finding out what people in the same industry as you are doing in terms of techniques and strategies that makes them successful as well as unsuccessful. In turn, this provides you with the information that will allow you to analyse and improve what you are currently offering (if needed).
You can do this for specific areas of your business that you are trying to improve (i.e., social media campaigns, website etc) or you can focus on the business as whole by looking at all key aspects that would make your service successful. What many may not understand is that looking at your competitors allows you to look at your own business even closer which is always good to do.
Another great thing about Competitor Analysis is that you get a better understanding of your market and who the key players are. Whilst researching your competitors, you may find businesses that do exactly what you’re doing or other businesses that may appeal to the same audience as you are but not providing the same service as you – Which should give you a variety of ideas and a better understanding of the market you’re in.
In Digital Marketing, the focus is to get consumers to become loyal to our business and advocate them to others for our brand to grow. Therefore, our focus would be on typical areas such as understanding our competitor’s business, what they are trying to promote, how they are doing it and what has been a success and failure.
Top Competitor Analysis Tips
Here are 7 steps to take:
1. Identify your competitors and which category they fall into: Know who your competitors are and try to split them into categories:
. Direct competitors – Those who do exactly what you’re doing and have a similar target audience.
· Indirect competitors- Those may not sell/ or provide the same service as you but target the same audience similar as you.
· Replacement competitor – Not in the same industry as you are however still meeting your target audiences’ needs.
2. Make a Competitor Matrix: This is when you make a spreadsheet or create a folder you
can use to gather all information you get as you research your competitors.
This allows you to be organised as you keep everything in one folder to refer
to should you need to look back at something.
3. Research background info:
This is where you gather your competitors’ background information (i.e what has made them who they are). You can get basic information by looking at their websites, articles, and social media pages. You can also find out about their location (as this may have an impact on how they operate) and the size of their company.
4. Identify who your competitor’s target customers are:
It’s important to know who your competitors are appealing to the most to be able to see how you can meet their needs in a better way. You can do this by studying their language through social media posts, identify their mission statement and make notes on how to improve these methods.
5. Try to apply the Marketing (4Ps):
· What product/service are they selling
· Their prices (how much they charge)
· What techniques they use to promote their product/service
· The place where the product/service is being sold/ where the service is being provided
6. Analyse your competitor’s strength and weaknesses:
Based on all the information you gathered, you can see what your competitors are doing right or wrong and what to take to improve as well as leaving out. The findings of this research would be what determines the success of your competitor analysis.
7. Use digital marketing tools:
There are various digital marketing tools available to help gather some insights on your competitors or the market. These include
Google Adwords, Google Analytics, Google Console and UberSuggests from an SEO/PPC point of view.
To conclude, Competitor Analysis is a key aspect to your marketing strategy as well as for the growth of your business. Whilst many may argue that it’s time consuming, it’s important to be continuously up to date with the industry you’re working in and what your competitors are doing to adapt, attract new customers and how they turn their customers into advocates. This will help you to benchmark your own success and to implement any changes that may be required by identifying both your competitor’s strengths and weaknesses and opportunities for you to grow and stand out against competition.
Digital Marketing Assistant
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