We are always looking for growth opportunities whilst keeping an eye on our competitors and this is where an effective competitor analysis can work.
The purpose of a competitor analysis is to understand your competitors’ strengths and weaknesses in comparison to your own and to find a gap in the market.
A competitor analysis is important because it will help you recognise how you can enhance your own business strategy and how you can out-do your competitors in these areas to keep your customer attention. Giving yourself an “unfair” advantage over others in your sector.
What is the point in doing a competitor analysis?
This being said, a competitor analysis is much more than just comparing yourself to your competitors, it’s a way to determining what your customers are looking at and engaging with, that way using your strategy to appeal to these tastes and interests.
In fact, it is the perfect opportunity to look at your business from the perspective of your customers, to look at what you’re doing and what you can do better. By understanding your customers and their journey you can begin to pinpoint what you should be doing, what your competitors are doing and how you can cater to these needs better than others.
The importance of comparing yourself to your competitors
Before you can start you need to understand who your competitors are, the best way to determine if another business is a key competitor you need to ask yourself, what service are they providing, are you targeting similar audiences and are they operating closing to you. And sometimes it’s as easy as typing the terms you would like to appear for in search and seeing who comes up on the top of the listings.
According to Study.com there are 3 main types of competitors:
- Direct competitors: “A direct competitor offers the same products and services aimed at the same target market and customer base, with the same goal of profit and market share growth. This means that your direct competitors are targeting the same audience as you, selling the same products as you, in a similar distribution model as you.”
- Indirect competitors: “An indirect competitor is another company that offers the same products and services, much like direct competitors; however, the end goals are different.”
- Substitute competitors: “Another company offering a product or service to your customers that you also provide.”
Once what sort of competitors you would like to be compared against has been considered, it is important to understand how you stand out.
You need to ask how you compare against your competitors and how you can distinguish yourself against them. By analysing their activity, understanding your target audience, you can also begin to identify more opportunities and pinpointing threats which you can improve on to enhance your own business strategy. This way you can begin to analyse what your competitive advantage is and where you need to improve and how you can begin to capitalise on this information by improving your business performance.
Once you have understood what your competitors are trying to achieve, who they’re talking to and on what platforms, you need to understand what strategies they have employed so you can match this and in the long run, stay ahead of the curve.
The importance of staying ahead
In order to stay ahead you will need to continue to understand your customer requirements while keeping up with the latest industry trends, this way you can ensure that you are keeping ahead with others in the industry. It’s key to perform a competitor analysis on a regular basis and committing to this. We recommend performing some sort of analysis once a year.
So why is a competitor analysis important?
In an ever-changing industry, there are always new innovative ways to expand your strategy which may you want to remain on top of to effectively stay ahead of your competitors as well as keeping the attention of your customers.
The importance of a competitor analysis cannot be over-estimated. Analysing your competitors is a simple, yet effective marketing tactic to make sure you are keeping up and matching the efforts of others in the industry, ensuring you remain relevant and don’t get drowned out against their efforts. Allowing you to implement a marketing strategy that will strengthen your online position and expand your online footprint.
If you're looking for assistance in conducting a competitor analysis as part of your wider marketing strategy, Kayo Digital agency in Kent can help. We offer Kent digital marketing services, as well as SEO, software and app development, website hosting, cutting-edge web design and more. To find out how we can help your business, don't hesitate to get in touch.