In Part One of our series on conducting a competitor analysis, we discussed some strategies you can use to study businesses providing the same products or services as you. This second installment provides more ways you can research the other businesses in your niche. Keep reading for more things you can include in your competitive analysis.
The way your competitors deliver services or products or their distribution channels also contributes to customers' overall experience of the brand. For instance, a company that sells all products or services directly to consumers and on a website will have a different messaging than a company that sells through stores.
Companies might also have extensive supply chains with multiple third-party contractors like wholesalers and retailers, which impact the business. You do not need to get into detail about your competitors' distribution chains. You only need to know how they are delivering their services or their products.
You can see this on their website. If you can buy or subscribe directly from it, they are a DTC or direct-to-consumer business. For most SaaS or digital-first companies, their only distribution channel is their website. Transacting entirely online has its strengths and weaknesses, and if you don't have a 100 percent digital product, you need to consider these when choosing your distribution channels.
Identify and list down your competitors' brand codes, the distinctive aspects of their brand like logos, colors, slogans, fonts, mascots, writing style, hashtags, and other consistent aspects. Marketing is successful when people readily associate the brand codes with the company. As such, you shouldn't settle for having a logo and themes; you should look into developing a distinct style of communication.
You can evaluate someone's product and business from the point of view of a consumer. When you shop at the company, you get a front-row seat of how they treat customers, the options they provide to shoppers, and other things that you cannot if you're on the outside looking in.
While ghost shopping, don't just browse; buy a product, try a service, and use it as intended. You can also note the customer journey through the physical store, through their online shopping channels, or by ordering something on their mobile app. Note problems like hitches in online shopping, unreliable customer service representatives, or unsatisfactory in-store experiences. Take note of what they do well, too; these are things you want to deliver or surpass.
Note the tactics they use on leads, customers, and loyalists. Does the messaging change? Are they likely to offer more discounts to regulars? Do they upgrade or upsell, especially if you become a customer? Knowing what sales strategies they use in given situations provides clues about what works and what doesn't work for particular companies.
In some industries, representatives' friendliness matter a lot. A rep's personable attitude can spell the difference between closing the sale and losing a customer. Their attitude can contribute (or detract from) customer satisfaction and retention. It can cause people to convert, especially if their friends and family talk about how easy it is to transact with a particular company.
When ghost shopping, check your competitors' onboarding processes and efforts at customer retention. If you're a service provider, these things matter much more. Companies that sell physical products, especially food or perishables, are unlikely to have a highly-involved customer retention program. However, digital or SaaS companies would need to put more effort into delivering value to their customers.
Once you've gathered all of the data you need, you can put them together in a SWOT analysis. This type of document provides an overview of a company's Strengths and Weaknesses. It also highlights Opportunities it has yet to tap and Threats to its growth.
A company's strengths are its advantages over its competitors, while its weaknesses are the things its competitors do better than it. Meanwhile, opportunities are external conditions or factors that can help the company grow, while threats are external conditions that do the opposite. Note that unless you have insider information on a company, any SWOT analysis you make as a competitor will be from your observations. Also, note that SWOT analyses only serve to summarize your findings. You typically have to gather your data before accomplishing one.
A competitive analysis is crucial to forming a marketing strategy that can stand in any business environment. A plant won't thrive if you don't know how to care for it properly; similarly, you need to know the conditions on the ground before you enter any niche or market. Note as well that competitive analyses should happen once a year. Markets and businesses evolve, and you need to update yourself with what your competitors are doing to provide better service.
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