A strong brand helps you to stand out from your competitors, reinforces why you are the right choice, and builds brand loyalty for repeat business. But how do you know how your brand stacks up against the rest of the market?
Competitor analysis will give you plenty of data that can help you define your unique value proposition. It will also allow you to identify which products or services to develop, based on which of your competitors products are most popular, as well as exposing your competitors’ weaknesses so you can capitalise on them by improving a product that your competitors fall short on. You might also uncover market segments that aren’t fully served by your competitors.
It’s really important to do regular competitor research, so I’ve highlighted some key steps to help you do your research.
The competitors you pick for analysis will determine the insights you get at the end, and the decisions you’ll make as a result. So, it’s critical that you include different kinds of competitors in your analysis if you want the results to be comprehensive.
Obviously, you want to look at your direct competitors – those who solve the same problem as you, for the same types of customers, with a similar product or service. But you should also look at competitors from these other two groups as well:
· companies who solve the same problem as you do, for the same types of customers, but they do it in a different way
· companies who solve the same problem in a similar way, but for different types of customers
For example, let’s say I was opening a mid-range Italian restaurant on the high street. A direct competitor would be another mid-range high street Italian restaurant, because they serve the same types of food to the same types of customers who are looking for a dining out experience that won’t break the bank. But I could also look at an Italian takeaway business, because although they offer a different solution (it’s takeaway, not a dine-in experience), they sell to the same types of customers that I would. On the other end of the scale are Michelin-star Italian restaurants – they offer a dining out experience with similar types of food, but to a different group of people with a much larger budget who want a more luxurious experience.
It’s always good to start with a company overview to get an impression of their scale and who’s involved in the business.
What’s the size of the business? How many employees do they have? What year were they established? Which locations do they operate in? Do they have multiple offices or stores You can usually get most of that information from their website, a Google search, or LinkedIn.
You could also look to see if they’re recruiting at the minute – take a look at job posts on LinkedIn – these can sometimes tell you how well their business is performing or if they’re looking to grow their business in a certain direction.
You could go one step further and explore what their corporate culture is like – if you go to glassdoor.com you can see if any employees or ex-employees have left reviews about what it’s like working for the company.
Products or services
Next you need to look at what they’re selling – their products or services – and look at what the key features are. How does this compare to yours?
What about pricing? Do they offer discounts for certain groups of customers, or special offers? Are there any new customer incentives? Do they offer packages?
An important part of competitor analysis is looking at the customers they attract and what people have to say about their brand. While it may be easier to gather this information about your own customers because you have access to behind-the-scenes data for your business, there are a few ways you can get some really good insights about competitors’ customers too.
Firstly, there are numerous review sites to check out, like Google and TrustPilot. As well as finding out what their customers are saying about them, you may be able to glean who these types of customers are.
There is a social listening tool called Mention.com that you can sign up to use on a free trial. This is really good for measuring your competitors’ share of voice. This is the volume of mentions they get online compared to others.
You can also create a Google alert for each of your competitor brands, so you get notified whenever anything new is published about them – this is great to make sure you don’t miss when they’re in the news or being mentioned online.
Share of voice isn’t the be all and end all though – what if they have a lot of mentions but 80% of them are negative? So, the next thing to look at is sentiment. This will reveal what their customers love and hate about their business. Make sure you’re looking at what is being said about them and not just how many times they’re mentioned.
You can find out where your competitors’ customers hang out by looking at which social media platforms your competitors use. Are there any that they have a large following on that you’re not currently using? Where do they get the most interaction from followers? What are they saying on there?
Social media is another great place to look for reviews left by customers. You can also search to see what they’re tagged in, who is talking about them, and what they’re saying.
You can also use Facebook to see if they are running adverts across Facebook or Instagram. Click on their Facebook page and go down to the ‘page transparency’ section and click ‘see all’ - you can then click to go to the ‘ad library’. If they are running ads, take a look at the messaging, images and calls to action they’re using in their social media adverts.
Another way to get a bigger picture of where they’re spending their advertising budget is to look for sponsored content online.
Type a search into Google with “sponsored by [company name]” (in speech marks) or you can try searching with: “author” “[company name]”.
Make a note of the platforms they’re appearing on and who those platforms are targeted at – maybe you should consider if it’s the right place for you to have some sponsored content there too?
Take a look at how your competitors offer customer service to their customers.
What contact details do they publish on their website? How easy is it to contact them? If they have an enquiry form on their website, fill it in and see how long it takes for them to reply - what messages or acknowledgements do you get along the way?
What about live chat – is that a function on their site?
And social media – do they use this to offer customer service too, with easy access to messenger or instant chat?
When you’ve finished reviewing your competitors, take a look at what you’ve learned and think of all the ways your brand or products/services stand out.
Where are you strong in comparison and where are you weak? What changes can you make to your advantage?
For example, if their customer service is lacking, this is a great area to capitalise on – make sure you highlight the quality and responsiveness of your customer service in your own marketing.
As Richard Branson once said, “strike the right balance between respecting your rivals and focusing on how you can beat them, and you’ll have a wining formula.”