Every entrepreneur who wants to stay ahead in the market niche today must know how to conduct a competitive analysis. A competitive analysis is very important for your business but unfortunately, a good number of business owners do not know how to go about it. In order to know how receptive the market is to your business and what works or does not work, you have to understand how other businesses in your industry function. A competitive analysis gives your company an edge over other companies; you can learn from the mistakes your competitors make and avoid them. Also learn from their strengths which can help you grow your business. Below are easy steps that can help you conduct a successful competitive analysis.
1. Define your goals (why do you carry out the competitive analysis).
The first step in a successful competitive analysis is to define why you decide to carry out a competitive analysis. Are you going in for the competitive analysis to improve your brand and gain an edge over your competitors? Do you want to make your customer experience better than that of your competitors? Or are you trying to drive more traffic to your business than your competitors? These are some of the questions you should ask yourself.
Ask yourself what you are trying to find out, how you plan to get your data, what information you want to have and from who? Answering the above questions will help you determine what type of data you need and design a good strategy to make your competitive analysis successful.
2. Identify your competitors.
The next step in conducting a successful competitive analysis is to know who your competitors are. There are two types of competitors, direct competitors (those who offer the same products/services and target the same customer base as your business) and indirect competitors (those who sell similar products/services but target different customers). You may be confronted with thousands of competitors depending on the type of business you run, which will make it impossible to conduct a competitive analysis for all. So it is important for you to choose your top competitors for the analysis. There are many tools on the web that can help you research your top competitors. Google search companies that offer the same products/services as your business and choose those who top the list and work with them.
3. Identify competitor’s strengths and weaknesses.
Once you’ve identified your top direct competitors, the next thing to do is to analyze their businesses from the perspective of strengths, weaknesses, opportunities and threats. Try to find out in what domain your competitors excel. Find out what their strengths and weaknesses are, what area they neglect, what gives them an advantage over you and what you can do better than your competitors. Use the information you get to weigh your competitors’ strengths over your weaknesses. Focus on the areas your competitors are missing, it might be a great opportunity for your business to gain an edge over them. With the data you get, improve your own business and focus on specific areas you can capitalize on.
4. Analyze your competitors’ online presence and customer experience.
Most if not all consumers are ready to abandon a brand if they have a bad experience with them. Customer experience is a factor that every business will want to improve and surpass other businesses with. You need to analyze your competition’s online presence to see how functional their websites and social media pages are and how they engage with their audience.
5. Talk to your competitors’ customers.
Reach out to your competitors' customers and talk to them directly to find out who they are, what they need, if they have had a bad experience with your competitors and why. This is one of the easiest ways to learn more about their customer experience. Also ask your competitors’ customers what they would like to be improved. Once you gather the answers to your question, implement them to your own business. When you find out what is lacking with your competitors, make it known to their customers that you will fulfill those business needs. This will help you gain more customers.
6. Check online reviews.
Try to know how various customers appreciate your competitor’s goods and services. Visit their social media business pages and sites such as Google and yelp to read what their customers say about them in reviews. Consider how they reply to those reviews and how they reply to each customer’s queries and negative comments on their social media pages. By reading online reviews, you may fall on positive reviews as well as negative ones that will give you an insight on the strengths and weaknesses of your competitors. Based on that you can now determine what you will do to boost your customer experience by providing better customer service and correct all your failings.
7. Use research tools.
There are many online research tools to ease your competitive analysis and make it more efficient. Conducting a competitive analysis is essential to growing your business but can be very tedious and time consuming when you look at multiple competitors. Research tools such as SEMrush, Siteliner, Brand24 and others can help you identify competitors, track their content, and analyze your results.
The above steps will help you have a clear picture of how to gain an edge over your competitors. All the information you get will help you decide what changes need to be made to optimize your business. Hopefully the above helps you to conduct a successful competitive analysis.
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