By on Jul 31, 2021
Sometimes you may find that business competition comes from surprising places. A competitive analysis helps you identify your main market competitors and determine the best ways to surpass them. You can’t be a frontrunner unless you know who you are running against. You also need to understand changing market trends, challenges and opportunities so you can adjust your strategies.
A competitive analysis checks your competition positions themselves in the market, what their strengths and weaknesses are compared to yours and what unique value proposition could prompt your target audience to buy from you instead of a competitor.
This guide will give you a basic understanding of competitive analysis, but developing a good competitive analysis takes time and expertise. You may want to hire an experienced digital marketing service provider to develop a competitive analysis for your business that provides a solid foundation for your continuing marketing efforts.
For now, keep reading for a simple framework to do competitive analysis in eight basic steps.
First, you’ll need to figure out who you’re really competing with so you can analyze data accurately. Here’s a few ways to do that.
A SWOT analysis essentially compiles a company’s Strengths, Weaknesses, Opportunities and Threats. This is a great tool to visualize how you fare against other businesses.
To get started, try to find out what assets (equipment, technology, network, etc.) the brand has along with any intangible assets (such as memorable branding) that might give them an edge. Identify which processes or aspects of the customer experience your competitor could improve and areas that they might neglect or miss. (For example, do they have a weak online presence?)
Attention to customer experience is one of the key factors in building a successful ecommerce business. Use this opportunity to close the gaps on your website by looking at what your competitors are doing.
Try this research framework to effectively glean meaningful insights into your competitors’ UX (User Experience) and CX (Customer Experience).
How various competitors price their products gives you some baseline data on how to price your product. As you analyze the prices, however, avoid focusing on the dollar value alone. Try to determine ways in which you could tie in extra value to your prices. For example, according to a Pulse Survey, 43% of all consumers are ready to pay more for greater convenience such as faster shipping or low-hassle delivery.
Try to pinpoint the product features that overlap with your competitors by finding out your competitor’s core product features and the product features that are unique to you. You must also analyze how your product features fare against those offered by your competitor and whether your competitor supports multiple platforms (such as desktop, iOS and Android).
Learning the type of technology your competitors use can be advantageous in upping the momentum for your brand. An easy way to discover this is to analyze their websites with BuiltWith. Alternatively, you can also use What Runs, which is a browser extension that analyzes any webpage you browse.
Pay attention to the types of supporting systems they use such as payment processors and email marketing service providers. Look out for any innovative technologies such as AI and chatbots that you might not be using and any hidden opportunity where you can offer a better online shopping experience.
If you sell products, be sure to compare your shipping options and pricing to those of their competitors. Shipping is a powerful determinant for most online shoppers. According to a recent study, Amazon is by far the most popular online retail website with monthly traffic average of almost 3.68 billion visitors in 2020. Part of that appeal is Amazon’s attractive shipping options.
Here are some shipping options you will want to compare:
If your competition is offering shipping options that you don’t, seek out different logistics providers to estimate if you can offer similar or more competitive rates. Typically, ecommerce brands should be able to negotiate bulk discounts for long-term contracts. Alternatively, you can try marking up some products’ prices to offset part of the shopping costs.
The next important step in analyzing the competition is looking at what customers are saying about them. Social media platforms like Facebook, Twitter, LinkedIn, Instagram and whatever others may be used by your target market are a goldmine for voice of customer (VOC) data.
With a tool like Semrush, you can examine the content pieces that attract the highest visitor numbers and monitor their social media audience growth dynamics. You can then leverage these insights for good brand positioning.
To have a bird-eye view and an always up-to-date competitive intelligence, monitor your competitors’ social media using the Facebook Pages to Watch feature or by including them in your social media analytics tool. The Facebook Pages to Watch is a feature that gives you an oversight of the level of engagement and audience growth of other Facebook Pages.
Comb search engine results with tools that analyze which keywords your competition ranks for and how they acquire backlinks to their websites.
Monitor online coverage by setting Google alerts for their brand name. Check their traffic volume and sources with a tool that provides website traffic analytics along with an overview of the main referrals.
Developing a good, working competitive analysis sounds like a lot of work, and it is. It requires expertise and time, but it is the basis for any successful marketing effort. An accurate competitive analysis is so critical that you may want to call in local marketing agency experts to help you with it.
Don’t hesitate to call on Umbrella Local. We can help you with your competitive analysis and any other digital marketing service you need. Don’t wait for your competitors to gain more market share. Contact Us today.
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