By Michael Akins on Jan 6, 2022
If you want to beat your competition, it must be part of your digital marketing strategy to know your competitors as well as possible. It’s not enough just to know your ideal clients.
You also need to ask (among other questions)
In other words, to understand your competitors, you must develop a competitor analysis.
In a competitor analysis (or competitive analysis) you compare yourself to your competitors. There are many ways to do this, but we will be covering some of the most popular and effective. All competitor analyses focus on generally the same elements, but use different ways to display the data. Choose what works best for your business.
To be successful as a business, you must understand your competition. Perhaps their weakness is your strength. You can highlight that in your marketing. Maybe something they’re doing is working well. You can take that strategy and put your own spin on it. The information from a competitor analysis will give you an edge in marketing and help you decide where to take your business next.
One of the most popular competitor analysis methods is the SWOT Analysis. The acronym SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It requires you to consider the following for each competitor you analyze.
Strengths: What is this business really good at? What gives them an edge over everyone else in the industry?
Examples: The company may have great brand recognition, unique products, extremely professional customer service or operational efficiency.
Weaknesses: What is this business bad at? What makes them weaker than other businesses in the industry?
Examples: The company may have no brand recognition, products that aren’t unique, poor customer service or slow operations.
Opportunities: These are positive like strengths, but relate to outside factors in the world instead of within the company. What in the world is happening that puts this business in the perfect place to grow?
Examples: Society’s desire to reduce pollution makes electric cars attractive. The global pandemic made video call technology like Zoom a necessity for every household.
Threats: Consider outside factors as we did with opportunities, but ask what negative external factors threaten this company’s success?
Examples: Society’s desire to reduce pollution may make some cars less desirable. The global pandemic prevented people from spending money in the travel industry.
A SWOT analysis is an effective way to quickly assess the state of your competitor and how you compare. You can even choose to do a SWOT analysis based on segments of the company instead of the company as a whole. For example, focus just on how your competitors use marketing tools. A SWOT analysis is a great tool to guide a competitor analysis discussion with your team.
Sometimes, viewing graphs and other data maps help you understand the state of a business better than words can explain. Most of these tactics can be drawn in a visual graph somehow. But perceptual mapping is specifically made using a graph. And this tactic focuses specifically on customer perception of a factor compared to the reality of that factor.
How it works: Choose the businesses, including yours, you want to compare. Next, pick two factors to compare and set them up on a graph. For example, the first could be the perceived price of services from low to high on the x-axis. The second could be actual pricing quality from low to high on the y-axis.
Graph each business on a point using your chosen factors. Step back to view the graph. Where do you fit on the graph in comparison to your competitors? Is the way you are perceived in line with what you offer? Are you where you want to be? If not, how can you change that? Perceptual mapping is a great visual to present to a marketing meeting to begin a discussion on where to improve your customer perception.
Every digital marketing strategy should include a customer journey map, also known as a user journey map. This tactic is valuable to your company as much as it is to compare your competitors.
How it Works: List out every way a customer interacts with the business. You can do this for your own company and also for competitive companies. For example, you might list company websites, social media platforms, physical stores if applicable, advertising channels, email, phone or any other mode of communication.
Analyze the journey a customer may go through from never hearing about the brand through making a purchase. Is there any crucial communication getting skipped in your company? In your competitor’s company?
You can also use this method to map out what you want your customer journey to look like in the future.
This next tactic allows you to focus on a broader scale. Instead of looking at individual businesses, Porter’s Five Forces examines the whole industry or segment within an industry based on the following:
This strategy is perfect for assessing the current state of an industry. It allows you to consider long-term challenges or opportunities that may arise for you and your competitors. Predict the industry’s profitability as a whole, and then consider how to strategize your piece of the pie.
Successful businesses know who their competitors are, what they are doing and how they compare. There are many tools out there to help you assess this. Each one measures a slightly different aspect of the business or industry so determine what you need for your digital marketing strategy.
A SWOT analysis gives you a quick overview of all internal and external strengths and weaknesses. Prefer to discuss the state of your industry or niche as a whole? Porter’s Five Forces is the tactic for you. Perceptual mapping and customer journey maps put you in the mind of the customer.
The variety of tactics means you can choose what you want to improve first. Then find the tactic that is best suited to measure this. Strategize with a purpose using already perfected tactics. And use the knowledge you gain to come out above your competitors.
If you need help, don’t hesitate to call a good local marketing agency. Call Umbrella Local for a free consultation if you would like to help learning more about your competition and strategizing how to gain more market share.
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