How to Do a Competitive Analysis for Your Marketing
Competition is everywhere. Unless you’re in a hyper-niche market, like selling luxury ice cubes or beard insurance (yes, those two things actually exist), there are probably several companies in your area who are selling a very similar product or service.
Taking a look at these competitors, specifically as it pertains to their efforts in digital marketing, can give you a leg up in understanding how you can differentiate, ultimately using that information to improve your digital presence and create a better experience for your prospects and customers.
But wait, shouldn’t I be wildly creative and forge a new path?
Not necessarily.
You can be creative in your content development, but there’s no need to try and build a new road where it already exists. For example, if your top five competitors are all extremely active on Instagram but aren’t posting on Facebook at all, maybe there’s a reason. Maybe engagement on Facebook is a juice ain’t worth the squeeze situation. Take everything you see with a grain of salt and make your own margarita, but it’s important to know the landscape before you jump in.
Decide the purpose of competitive intelligence
What do you want to know? Are you curious how other businesses are pricing their products or services? Do you want to know what offers they’re making, if they’re discounting products, bundling, or how they’re talking to prospects?
The competitive intelligence work you do can (and should!) be tailored to your specific business goals. It’s yet another tool in your toolbelt for prioritizing your marketing efforts.
Getting set up for your competitive analysis
Using a spreadsheet or basic table (or even pen and paper if you dare go old school like we love to do):
List the criteria in the left-hand column: Consider key metrics like price, offers, product features, social media platforms, social media posting schedule, brand style, type of content, value proposition, who they seem to be talking to, and customer feedback/reviews.
List your own business in the second column: The main purpose of doing this is to see how you stack up, right?
List other competitors across the top in the third, fourth, and fifth columns: We’ll figure out who they are below.
Seem like a lot of work? We’ve done the heavy lifting for you. We’ve created templates to help you compare offers, social media, and SEO metrics and perform your SWOT analysis. We’ve also included a blank template so you can add some points of comparison that are unique to what you’re looking for.
Analyze the competition
Now that you have the spreadsheet locked and loaded, let’s get to work.
Make a broad match list of all of your competitors, big and small, near and far, super similar and close-ish. Think about:
Local competitors: Look in your town, neighborhood, and shopping center; the closer to home, the better.
Niche competitors: If you offer online services, these competitors don’t even need to be in the country if they’re directly competing for eyeballs from your same audience.
Competitors serving the same space: The juice bar is competing with other juice bars, but it also competes with coffee shops, smoothie bars, bar bars, ice cream shops, and anywhere else someone can go to satisfy their desire for a drink. A CrossFit gym competes with other CrossFit gyms, but it also has barre studios, yoga classes, running clubs, and anywhere that people are paying to do group fitness.
Choose 3-5 to focus on: These tend to be businesses that are the most similar in size, offerings, price points, years in business, and audience. It’s a good idea to follow and track all of the businesses in your space, stay up to date on industry happenings, etc., but for this exercise, hone it to a handful.
Dive deep with your top few matches. Check their online everything. Scour their website. Sign up for their newsletters and review their social media footprint. Get to know them as though you might buy from them. Call them and ask questions about what they offer. Unless you’re a major local celebrity, odds are they’re not going to recognize you if you drop by the store or call them on the phone.
Evaluate: As best as you can, follow the user journey from end to end. Make a note of what competitors are doing well, who they are talking to/targeting, and what they’re not doing great at. Look at their tone, style, messaging, graphics, and the whole vibe of what their online experience is like. Be sure to take notes in your comparison tables (download them for free if you haven’t yet).
Draw conclusions: You’ve got all this info; now we’ll help you put it together in a meaningful way.
Find the gaps
At this point, you have a bird’s eye view of what your closest match competitors are doing. Now, look for the gaps. Compare across the different brands. What can you infer about the industry as a whole, including the audience, products, or services?
Draw conclusions and find key takeaways from what everyone else is doing. You might even use our free download to create a SWOT analysis for your business based on your competitors to identify your business's strengths, weaknesses, opportunities, and threats. What’s being left out, what’s not being done. Where can you shine? These areas can become your competitive advantage.
Look at where your competitors are strong → are there any areas you now decide aren’t worth the competition?
Look at where your competitors are weak → Is this a space you can swoop in and capture some market share?
Here’s an example of how that might play out.
Say you’re a gym, and after reviewing your competitors, you find that pretty much everyone in your area is pushing the same offers: sign up today, and we’ll give you the first month at 50% off, yada boring stuff, amirite?
Instead, you look for an opportunity to differentiate yourself. What if you could bring people into your gym not with a discount but with an add-on, like a complimentary nutrition consultation or another individualized session that enables you to connect with that prospect and potentially sell them not only on your group classes but other offers that might help them?
Evaluate your offerings
Once you’ve identified the gaps, look in the mirror at your own offers. Do they feel effective and like they’ll be compelling for your ideal audience? Are your services and prices competitive, or are you happy to differentiate on price because you’re selling a premium product? Are your structures simple and easy to understand? Are you differentiated from the crowd? Does it matter? Think about what actions you should take and what’s less important.
Maybe you’re a boutique fitness studio that’s meant to be at the top price point; in that case, you shouldn’t price down your offer simply because competitors are doing so. If you’re a financial planner and your competitors all seem to be spending a lot of time on Instagram, it doesn’t mean you have to do that right now, or even at all.
Competitive analysis is meant to guide your decision-making process, not make the decisions for you. Ultimately, your strategy is unique to your business, and just because others are doing something doesn’t mean you should.
Take the next step and implement your strategy
Now, you have a wealth of information to help guide you in developing a strategy. Still not sure where to head from here? The team at Big Bad Marketing is happy to help you. Schedule a 15-minute consultation call, and we can review your competitive intelligence and figure out the next logical steps based on your findings.
Cheers, to scoping out the competition and using it to build a bigger, badder business!
