As small business owners, it can be tricky for us to distinguish ourselves from the crowd of competitors we inevitably end up facing. Each of us vying for precious customer attention with unremitting zeal.
It can often seem like a full-time job just to stay on top of our rival’s competitive advantages. But conducting a thorough competitive analysis can be advantageous in many ways.
A competitive analysis is a type of market research that focuses primarily on identifying and analyzing your company’s main competitors. This involves researching their products or services and sales techniques. From there, you can identify areas in which your own business could improve.
The advantages of regularly performing one of these analyses are plentiful. It allows you to identify market trends among the more successful of your competitors and consequently adopt their techniques for yourself. Thus, enabling you to market and sell more effectively, and boost those positive customer reviews.
Perhaps more critically, you may be able to pin down a gap in the market that hasn’t been explored yet. If nothing more, you will recognize the precise level of competition you’re up against, leading you to make wiser business decisions.
For a real life example of how competitive analysis can work, take a look at Airbnb. They were able to analyze the declining success of their competitors in the traditional hotel business among lower socio-economic classes, and generate a business model in response.
Now let’s outline a few basic steps you can take to perform a competitive analysis.
Identify your competitors
The first step involves identifying who your competitors truly are. You may already have an idea of who your rivals are and think you may as well skip this step. All the same, you should try searching for your own business online and see what the engine throws up. You may be surprised.
Also try keyword research related to the product or service that you sell. You should see similar companies given as suggestions for searchers who could end up being prospective buyers.
Make sure you’re only considering competitors who are running a successful brand. While you never want to copy something your competitor is doing, you can often find inspiration from what they’re doing and do it better.
Now that you’ve identified your competitors, it’s time to start collecting information.
Check out competitor websites
Keeping your own website in mind, take a trip over to your competitors’ pages. Start making notes. It might help to make a little table or spreadsheet to keep track of your notes across all of your competitors.
The kinds of things you should pay attention to are:
- Style/overall tone of website
- Website speed (You can use Google PageSpeed Insights to test website speed)
- Search engine optimization
Compare these factors to your own website. How could you adopt some of these features or aspects to improve your business? Perhaps your ecommerce platforms need a revamp.
Some specific advice regarding search engine optimization is outlined by Corinne McCarthy, an SEO & Online PR Specialist for Web Talent Marketing. In an interview with Small Business Trends, she recommends using third party tools such as SEMRush to find keyword data about your competitors. These tools will tell you what other companies are using your keywords and how you rank against them.
While you’re on their websites, look out for an option to sign up for a newsletter. Your competitor may be using software offered by a marketing company that designs newsletters for you. Sign up for your competitor’s newsletter and look to the bottom of the emails to see what marketing company has provided the email.
This may provide beneficial knowledge of reputable marketing companies. Newsletters are a great way to stay connected with your customers.Investing in some newsletter software may be what your marketing is missing.
It’s worth checking out what sort of social media presence your competitors have. What platforms do they use? How often do they post? What kind of content do they produce? Can you estimate a budget for the production of this content? Try to assess what techniques they are using to keep their users engaged.
Different industries will use different platforms and have different posting habits. For example, a fashion company is likely to use Instagram primarily. Go to their Instagram page and assess their content.
You may also be able to use LinkedIn to see who your competitors are doing business with. You may find that they are using a more reputable supplier of goods that you didn’t know of before. Or you may discover new technology that could help streamline your business.
For example, if your business utilizes call centers, maybe the implementation of cloud PBX solutions and an IVR system would put you in league with some of your competitors. Are you definitely using the best call center software?
Get Ahead With Competitive Analysis
A competitive analysis can be the difference between a successful business and a flop. There’s no room for procrastination when the level of competition is so high. All your rivals are conducting this kind of research so if you want to keep pace, you better follow suit.
Richard Conn – RingCentral US
Richard Conn is the Senior Director, Search Marketing for RingCentral, a global leader in unified communications and VoIP Service. He is passionate about connecting businesses and customers and has experience working with Fortune 500 companies such as Google, Experian, Target, Nordstrom, Kayak, Hilton, and Kia.