When introducing a new brand or product, you rarely enter a completely open field. Maybe they’re not direct competitors, but there are always other brands or products in the market that will compete for your target audience’s attention. Even in an established market with an established product, it’s helpful to know how you stack up.
That’s why it’s so important to have a firm understanding of who your competitors are and how they position themselves.
Here’s what you need to know to survey your competitors and position your brand or product for your customers.
How to Complete a Competitive Analysis
A competitive analysis gives you the lay of the land, allowing you to enter the market with confidence. A competitive analysis evaluates your business’s competitors, their products or services, and their marketing strategies to identify strengths, weaknesses, and potential opportunities to differentiate your brand or product.
A common mistake when completing a competitive analysis is putting too much emphasis on the competition and not enough on the customer. After all, positioning doesn’t matter much if it doesn’t resonate with your audience, so make sure you’re also looking for opportunities to gain insight into your competitors’ customers as well.
Identifying Your Competitors
The first step in a marketing competitive analysis is to identify who your competitors are. This includes not just direct competitors but also any companies that offer a similar product or service to your own.
In general, there are three types of competitors to consider:
- Direct: Competitors that offer a product that could be directly substituted for yours.
- Indirect: Competitors that offer different products but can be used instead of yours to solve the customer’s problem.
- Replacement: Competitors that disrupt the market; they can be similar products or products that solve similar problems, but what’s important is that they change how customers think about the problem. Uber, for example, is a good example of a replacement competitor for taxis.
It’s important to consider both large and small competitors, as well as those that operate in different markets.
Gather Information About Your Competitors
Understanding their target audience: Once you have identified your competitors, the next step is to understand their target audience. This includes analyzing their marketing messages, brand positioning, and the demographics of their customer base. By understanding your competitors’ target audience, you can better understand how to differentiate your own marketing efforts.
Evaluating Their Marketing Strategy
A key part of a marketing competitive analysis is evaluating your competitors’ marketing strategy. This includes analyzing their marketing channels, such as social media, email, and advertising, as well as their content marketing efforts. At this stage, evaluating how they use creative on each platform is important as well.
Analyzing Their Products and Services
Another important element of a marketing competitive analysis is analyzing your competitors’ products and services. This includes evaluating their features, pricing, and overall value proposition.
Assessing Their Strengths and Weaknesses
A marketing competitive analysis should also include an assessment of your competitors’ strengths and weaknesses. Where do they thrive, and where do they leave customers wanting? Customer reviews are a great place to start; they give you a glimpse into not just what your competitors say about themselves but also what their customers think about them.
Identifying Opportunities and Threats
Finally, a marketing competitive analysis should include an assessment of opportunities and threats in the market. This can help you identify areas where you can capitalize on trends or shifts in the market, as well as potential threats to your business.
Don’t Forget to Challenge Your Assumptions
It’s your job to think about your business and your customers every day. Over time, you’ve made assumptions about what you think your customers need, how they see your business, and what problems your product or service solves.
All that information you’ve already collected is incredibly valuable, but it can also leave you with blind spots that open up vulnerabilities for your competitors.
Blind spots happen when you’re too close to a market, and you don’t notice small, subtle changes. They happen when you make certain assumptions or hold some ideas as absolute truths that are no longer true.
Spelling out what you think is true about your audience and challenging it can help test your assumptions. A great place to start is to analyze your brand’s social media activity and website activity. Those are two opportunities for your customers to give you direct feedback on your messaging and positioning.
On social, the feedback comes in the form of engagement on posts and reviews. On your website, feedback is less direct, but reviewing analytics like bounce rate, time on page, and goal completions will give you a sense of how well your messaging is landing.
This kind of analysis helps you optimize your company’s most valuable resources: your time and money. You can identify problem areas, test new messaging, and get real-time results.
Overall, a competitive analysis is an important tool for businesses of all sizes. By understanding your competitors and the market, you can make informed decisions about your marketing strategy and position your business for success.
