Regularly conducting a competitive analysis helps keep up with trends and technologies while identifying gaps in your business.
- You may want to conduct a competitive analysis every quarter or once per year, or when releasing a new product or trying to grow a business quickly.
- Steps to conduct a competitive analysis:
- Identify key competitor
- Assess their pricing structure
- Research competitors’ marketing and sales strategies
- Pay attention to competitors’ content and online presence
- Identify any technologies and tools you should incorporate
It’s helpful for any business to know what’s out there in the market, even if yours has been established for a while. Competitive analyses assess the industry and look for gaps in the marketplace. They help an organization keep up with trends, so it’s never falling behind competitors. And they assist in devising more effective marketing, enabling business growth.
So, when should you conduct a competitive analysis? And how do you go about doing it? Here is a guide to some best practices:
When to conduct a competitive analysis
Depending on the industry, you may think that what you have will never go out of style and always be unique. That might be the case, but consumer priorities and preferences continuously change. These shifts may be due to trends or sudden, major events. For example, a service to clients where you typically meet in-person likely shifted to virtual meetings during the pandemic.
You should stay up to date on what’s happening in your industry and with your target audiences. It takes research and evaluating competitors provides even more insight into how to keep improving. The effort involves assessing what other businesses are doing and what works for them and what doesn’t. You may uncover gaps they’re not filling and find a new service, product, or market.
When was the last time you did a competitive analysis beyond the quick perusal of a website? You should be conducting them regularly so that you’re not missing opportunities or threats.
Otherwise, essential times to conduct a competitive analysis include:
- When you’re working on a new service or product
- When you’ve noticed a dip in sales or interest
- When you see a competitor doing really well
- When you’ve received negative customer reviews
- When you want to improve marketing campaigns, including reach and ROI
- When you’ve noticed changes to your bottom line or cash flow
- When you want to scale and grow the business
It’s never a bad idea to set a goal to do a competitive analysis at least once a year or even quarterly, especially when a business is in its early stages and is still changing rapidly.
How to conduct a competitive analysis
Whether you’re releasing something new or just conducting an annual competitive analysis, here are some steps to do it:
1. Identify key competitors
First, create a list of your closest competitors. These are the businesses that are similar in size, scope, and products or services. They also may serve your same geographical area and thus your ideal audience. Identifying your biggest rivals is vital to ensure you’re looking at information that relates to your organization the most.
2. Assess their pricing structure
How are competitors pricing their products? You won’t be able to effectively price yours without looking at what the competition is doing and accounting for the market. You can then decide whether to charge more because you have a leg up on quality, offer an additional perk, or price below competitors to provide a more affordable option.
3. Research competitors’ marketing and sales strategies
Where are they investing their dollars? What tactics are they using to reach people? Are they doing something exciting and bringing in new customers? What can you incorporate into your marketing approach that will do the same? Are they missing out on an opportunity that you could leverage?
It is crucial to understand what others in your industry are doing to attract leads and get the word out about their products or services.
4. Pay attention to competitors’ content and online presence
Similarly, also look at the type of content competitors produce and where they’re posting it. Most important here is probably social media and perhaps a blog.
What social platforms are they most engaged with, and how are customers responding? How often do they post? Are they engaging with people? Do you notice anything they’re not doing that would help them in their strategy, like focusing more on design or hiring a content editor?
5. Identify any technologies and tools you should incorporate
Finally, a competitive analysis reveals innovations and technologies that have become prevalent in your industry. Sometimes, simply adopting a new software platform can do wonders for your competitive edge. Research the tools that others are using, their cost, and their potential benefits.
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