Do You Know What Your Competitors Are Doing? Create a Competitor Analysis in 5 Easy Steps,
“A horse never runs so fast as when he has other horses to catch up and outpace.”—Ovid
In the cacophony of the heated business world, if you are not first, you are last. Rising competition has forced seed stage startups to start walking before they even learning to crawl.
According to leading marketing experts, most Americans are exposed to anywhere between 4,000 to 10,000 advertisements every day. Just take a quick look around. You are leading a life that was implausible for even those born with a silver spoon in the last century. This means that your target consumers have more options today than ever before, and perhaps there is no need to reinvent the wheel.
Serial entrepreneur, billionaire, and Shark Tank judge Mark Cuban rightly believes that business is the most competitive sport. His advice to modern entrepreneurs? “Work like there is someone working twenty-four hours a day to take it all away from you.”
Cutthroat competition drives young entrepreneurs, and this has made America the new breeding ground for competitive and tech-driven business owners. So if you are looking to stand up and stand firm against your rivals, competitor analysis can be the way forward.
The golden question: What is competitor analysis?
When was the last time you decided to pay heed to your existing competitors and new entrants in the market? If your answer takes you back a couple of months, then you need to pull up your socks and seek as much knowledge about your close challengers as possible.
Let’s first start with the definition of competitor analysis. Competitor analysis is defined as a business strategy used to identify existing as well as new competitors in the market. Once identified, this process allows you to research your competitor’s products, services, sales, and marketing strategies.
You need to realize that there is a lot more to building the right competitor analysis framework than simply stalking your rivals on social media or scrolling through their website. The right competitor research can help you identify key parameters like competitors’ market share and dominance, their service standards, product/service differentiation, and more.
Addressing the elephant in the business jungle
An old saying might claim that ignorance is bliss; however, in today’s concrete business jungle, you can’t afford to ignore even the smallest competitor. Perhaps, being alert to your rival’s every possible move is the only way to survive.
Contemporary business owners have a lot on their plates, such as building the next best product, hiring the best talent, and managing plunging finances. However, most entrepreneurs still undermine the sheer potential of their rivals, and most don’t know where to start.
Feeling caught up in the relentless pursuit to overcome your competition? Well, you’re not alone on this journey. The presence of a dominant player in the market does not mean you pack your bags and let them rule. Competition has helped businesses improve and offer better products to the masses. Take the case of Google and Yahoo, for instance.
Google was not a household name if you rewind the clock to the year 2000. It had just a mere 1% share of the market and Yahoo, on the other hand, dominated with 56% of search engine referrals. By the year 2002, Google had significantly improved its algorithm, giving rise to faster and more accurate search results, and the rest is history. According to Statista, Google has a dominant market share of 86% worldwide.
How to do a competitor analysis the right way
Competitor comparison or analysis is not a one-day job but an ongoing process. We have curated a few proven steps that will help you become a research-driven business and rise above any prevailing biases.
1. Identify your top competitors
You can start by creating a small list of six to 10 competitors using Google search results and Alexa rankings. Try including businesses that operate in your location, sell similar or identical products, share the same target audience, etc. You can also float a survey asking your users about similar brands they engage with other than you.
2. Create a competitor analysis template
Creating a template will help you jot down various criteria for comparing your brand to others. The comparison parameters that you certainly need to include are as follows—product range, pricing structure, lead generation sources, marketing channels, and offers/discounts to new customers.
3. Divide competitors into primary and secondary
Primary competitors are your company’s direct competition as they sell similar products/services to a common audience. Secondary competitors, on the other hand, sell identical products but to a different audience.
4. Capture data using the right tools
Once you have compiled the list, it is time to dig into the right data using tools and platforms such as Facebook Audience Insights, Alexa, and BuzzSumo. You can also use a bug tracking software to trace security-related bugs and prevent your rivals from breaking into your business data.
5. Analyze gained data
They say that the devil is in the details. This captured data will help you get a clearer picture of your position in the market. You can also perform a SWOT analysis to identify your top strengths, weaknesses, opportunities, and threats.
Rising above “analysis paralysis”
Analysis can help you add a pinch of clarity to your competitor research soup. However, a little excess, and you can find yourself in a paralyzed process. You need to realize that over evaluating the competition in the market can make you lose track of what makes your brand unique. Devote ample time to exploring your competitive advantage instead of converging all your energies on your rivals.
Also, competition should not be always about playing the wrong tactics or letting others down. You can up your creative game and marketing to seek the attention of your target users. Take this fun, yet creative, burger war, for example.
Fast-food giant McDonald’s came up with a witty and creative billboard to troll one of its all-time rivals, Burger King, in Brussels, Belgium. The big banner read: “Served by a king, or served like a king? Discover our table service at McDonald’s.”
Stop living in denial
In the business world, there is no such thing as free lunch. You need to stop living in denial and accept that competitors are out there, waiting for you to make a mistake.
Conducting research on your competitors will help you gain a bird’s eye perspective of your market so you can spot every rival. After all, nobody motivates you better than those who want to see you fail.