September 3, 2021

Conducting A Competitor Analysis: What To Know, Part 1

Businesses don't thrive in vacuums. Even very niched-down newcomers will need another business to complement their offerings for their company to thrive. Besides having a strategy for creating SEO content, organic growth comes from grasping what people want and delivering.

While uniqueness will get people to notice you, that's not the only thing that drives success. You can still succeed even if you're selling a product similar to what other companies offer. What matters is how you use the circumstances you have—that is where competitive analysis comes in. Here are tips on effectively conducting an analysis.

Identify Your Competitors

Competitors are companies solving the same problems or providing the same services you do. Domino's and Pizza Hut, for example, are competitors since they have the same primary offering. Not all businesses selling similar things are direct competitors, though—Domino's and Starbucks are both places to eat, but they don't directly compete with each other. Cafes are for snacks or refreshments, while restaurants are for more substantial meals.

One way to find your direct competitors is by looking at companies that target the same keywords as you. Some keyword research tools let you check competing domains and their rankings. You can also do this by searching "related:competitor.com" on Google. You can also look at businesses that bid on keywords you do. This approach is more direct than analyzing organic traffic.

Study Their Origin And Background

If you know how a competitor started, you can follow their growth and make educated guesses on why they made certain business decisions. Research puts things in context. Look for the year founded, the number of employees then versus now, the number of customers, and the revenue. Also, check if they had acquired any companies or if they have venture capital investors.

Company overview websites like Crunchbase can provide some of this data. If the competitor is a private company, you can still Google it to learn more. Often, C-level interviews will have these and other information like insights into their challenges, what they consider their most valuable segments and others. LinkedIn is also an excellent place to learn more about your competitors, especially its employees.

Study Their Services Or Products

Knowing what your competitors offer and how it serves or affects the market is vital to creating business opportunities. If they aren't serving a particular segment or popular for specific things, that has implications on how you can differentiate yourself.

Take a moment to look at each product and its features or the solutions it brings. Try these out and note down what they do. Some companies have very complex offerings, and it would take more than an afternoon to study everything they provide, but you need to take that time.

Check their pricing as well, especially for tiered offerings or ones with recurring payments. Note if they do periodic sales or discounts, what these are, and who the target market is for these promos. In some instances, as in some B2B niches, you will have to do ghost shopping since businesses won't have publicly listed prices. You can also ask current or former clients or customers.

Read What People Say About Them

Take with a grain of salt reviews that skew too much to one side. Whether it is too positive or too negative, a highly skewed review might be less reliable than two- to four-star ones. A five-star review accompanied with glowing paragraphs might indicate a super fan, or worse, someone paid to write the review. Conversely, high emotions might result in an outraged one- or zero-star review, which is still unhelpful. The middle ground will show you a clearer picture of the company's products and services.

Be Familiar With Their Positioning And Targeting

Know who your competitors are selling to and try to tease out their positioning. How they want people to perceive their products is vital in determining how you should position your brand. You can either place yours in opposition to theirs or fulfill a niche that they don't.

You can start studying a competitor's positioning by visiting their homepage and looking at which messages are most prominent. These will tell you what segment they're trying to reach and what they want these consumers to know about their business. If they have a blog and regularly create SEO content, this will also point at their positioning.

Dig deeper by reading, watching, or listening to interviews of their C-suite officers. You can also look at the product and pricing pages since some companies name price tiers after their target markets. Some pricing plans list services or features you get at each tier; you can also use this information in your positioning.

Study Advertisements By This Company

Ads are a great place to learn a company's positioning. Since they do not have room for fluff, you can get a great sense of what a company does or who their audience is from a 15- or 30-second ad. Besides TV or internet ads, billboards and print ads are also good sources of insights, especially about established brands with large ad budgets.

Not all places, however, have that much to spend for marketing and advertisements. If you and your competitors are small to medium enterprises, you can check Facebook ads, which are still valuable sources of insights into a company. 

Facebook also allows you to see all the Facebook ads a company runs if you visit their page. Just go to Page Transparency, click "See All," and then " Go to Ad Library." Apply the necessary filters, and you will see the ad variations they have for the location you specified.

Conclusion

Knowing your niche is not limited to having a good grasp of what your intended audience likes. You should also know what other brands provide. If you don't assess what other companies provide and don't study what makes customers choose them over you, you are undoubtedly missing out on growth opportunities. Understanding who is in the arena with you helps you distinguish yourself from them and present yourself in a way that makes people want to choose your product.

Read the rest of our tips for conducting a competitor analysis in Part Two of this series!

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