Competitor Analysis Made Simple
Competitor analysis can feel like a daunting task, but it’s one of the most important steps for any SME business looking to grow. If you don’t know who your competitors are, how they position themselves and what they’re doing well, you’ll struggle to carve out your place in the market.
But rather than obsessing about your competitors are doing, a better approach is to break your analysis down into simple, actionable steps. By doing this, you’ll gain valuable insights that can shape your marketing strategy. In this article, we’ll guide you through a straightforward approach to identifying and analysing your competition.
Step 1: Identify Who Your Real Competitors Are
Real vs Perceived Competitors
It’s important to identify who your real competitors are, i.e. those whose products or services your target buyers evaluate alongside yours. Primary competitors are those offering nearly identical products or services. Then there are secondary competitors, who may sell similar solutions but cater to a different market segment. Finally, tertiary competitors target the same audience but with completely different offerings.
Understanding these categories is key. Sometimes, businesses get so focused on direct competitors that they overlook companies that might be gaining customers through alternative solutions.
Methods to Identify Competitors
Finding competitors is easier than you think. Start with a simple Google search. Review sites like Trustpilot often have sections highlighting alternative products. Check who’s active at industry conferences and events. Also, don’t underestimate the power of your customers, ask them who else they considered before choosing you.
The goal is to build a solid list of competitors. Aim for three to five, this will help you determine how competitive the landscape will be.
Step 2: Identify Competitors’ Customers and Expectations
Finding Competitors’ Customers
Want to know who your competitors’ customers are? Start by checking their social media profiles. Look at their followers, read comments on posts and see how people engage with their content. Review sites are another goldmine for finding and learning about competitor customers.
Customer Metrics to Measure
Understanding customer demographics such as age, gender, location, occupation and income can give you a huge advantage. As mentioned already, customer reviews can reveal even more, such as what they like, dislike and expect from the product or service.
By understanding who your competitors are selling to, you’ll be better equipped to tailor your marketing strategy and offer solutions that meet their expectations.
Step 3: Analyse Competitor Positioning and Messaging
Positioning and Messaging Overview
What promises are your competitors making?
To compete effectively, you need to understand how your competitors are positioning themselves. What promises are they making? What’s their tone of voice? Look at their website,social media, press releases and product copy. Pay attention to how they describe their USP.
Tools and Resources
Manually analysing marketing materials can still give you valuable insights. The key is consistency. Competitors that maintain a clear, cohesive message across channels tend to stand out more with customers.
Step 4: Define Competitors’ Story and Unique Selling Point (USP)
Competitor Story and Key Features
Your competitors’ story often holds the secret to their success. What narrative are they telling? How do they highlight product benefits and customer pain points? This is where their brand identity shines. Take note of how they weave key features into their marketing to create a compelling story.
Identifying the USP
A simple formula can help define a competitor’s USP:
[Competitor] is confident that customers will choose [their product] because it solves [customer problem] better than any alternative, thanks to [key differentiators].
Identify these elements for each competitor and you’ll have a clearer picture of how to position your business more effectively.
Step 5: Compare Price Points and Offerings
Pricing plays a major role in your customers’ decision-making process. If you can, look up your competitors’ prices directly on their websites or through e-commerce platforms. Also, consider additional factors like shipping policies, promotions and bundled offers.
You don’t necessarily have to match your competitors’ pricing, but knowing where you stand can help you create offers that appeal to your audience’s budget and expectations.
Step 6: Conduct a SWOT Analysis
Now that you’ve gathered all this information, it’s time to summarise it with a SWOT analysis. This helps you visualise where your business fits in the competitive landscape.
Strengths and Weaknesses
Identify what your competitors are doing well. Are they known for having a superior product or exceptional customer service? On the flip side, what are they doing poorly? Weak social media strategies, outdated websites, or limited-service offerings are opportunities you can capitalise on.
Opportunities and Threats
Opportunities might include emerging trends or gaps in the market that your business can fill. Threats, on the other hand, could involve new competitors or changes in customer preferences. Regularly updating your SWOT analysis ensures you stay ahead of market shifts.
Final thoughts
Competitor analysis doesn’t have to be a complex process. By following these steps, you’ll gain a deeper understanding of your market and develop strategies that help you stand out. Now this isn’t going to magically transform your business overnight, but the insights gained will position you for long-term success. It’s information that you don’t have currently, and it will always be helpful. Just remember not to over-analyse and keep the process simple.
Feeling overwhelmed by competitor analysis? We can help. Reach out to our team today for tailored insights and strategies that drive growth.
