5 Benefits of Conducting a Competitive Analysis
Getting Ahead of Your Competitors
The key to an organization’s success is creating a solid business strategy that sets it apart from the competition. While creating a vision, defining targets, and making fact-based decisions are all critical when developing a business strategy, an important aspect is conducting a competitive analysis.
A competitive analysis is a strategy that allows you to identify your competitors and evaluate their marketing strategies, services or products they provide. By choosing the right competitors to analyze, finding the correct data, and understanding how to use these insights to your advantage, you can make informed business decisions backed up by data to help your business grow.
Competitive Analysis Framework
Your competitive analysis framework compares your company’s performance against your competitor. It gives you a comprehensive understanding of your opponent. However, your competitive analysis’s focus may vary, which will affect how it’s structured. For example, you may want to look at your competitor’s overall marketing strategy, which will require you to understand your competitor’s target customers, current market share ownership, and what makes them unique. Similarly, you might want to focus on its social media tactics, which will investigate channels used and frequency of posts, types of content, and engagement.
The Benefits of a Competitive Analysis
A benefit of a competitive analysis is it allows you to understand how to put yourself ahead in a crowded marketplace. Additional benefits include:
Fine-tuning your messaging
There’s one crucial question to ask to differentiate you from another brand: Why should they choose your business? It’s essential to find and understand what unique selling point(s) sets you apart from the competition. You’re no longer just selling products and services – you’re selling benefits, value and positive experiences. Between analyzing mission statements, researching partnerships and reviewing product descriptions, you can use this as an opportunity to find distinguishable talking points that you can leverage against competition.
Establishing a benchmark
Benchmarking establishes a point of reference for measuring growth that is beneficial for both startups and well-established organizations. Using this data can give you an accurate reading of previous and present performance and identify improvement areas.
Identifying market trends & gaps
When completing a competitive analysis, it can reveal trends in the marketplace that provides an opportunity for you to differentiate your brand’s products and services. Alternatively, it can also point out market gaps. The analysis allows for planners to develop matrices for underserved or even unserved areas in the market.
Uncovering product improvement or developments
If there’s anything that the COVID-19 pandemic taught us, it’s that customer needs changed quickly and drastically. To understand how to improve or develop new products to meet customer requests, read through your and your competitors’ customer reviews. Your competitor’s responses could help you get ahead of knowing their pending improvements.
Understanding your weak points
Through items like SWOT analysis within a competitive analysis, you can identify your weak points and prepare for potential market changes and threats.
The Top 3 Mistakes to Avoid
Conducting a competitive analysis helps you stay on top of your competitors while also learning from them too. However, it’s easy to encounter pitfalls that that may throw off the insights you’ve gathered. During this process, be aware of the following to ensure you’re getting the most out of your competitive analysis:
Update your insights
One mistake that businesses tend to make is that they forget to or blatantly don’t revisit their original insights. This is detrimental as companies are always evolving. Competitive analyses are ongoing, and not reviewing your original insights can negatively affect your data.
Use your data
Competitive analyses are time-consuming. If you’re taking the time to complete one, you must be sure to use the data to your benefit. When you have the findings, develop a strategic plan and execute the unique angles you’ve discovered during the process, whether through marketing or product development.
Have a plan
It’s essential to set your objective when putting together an analysis. Otherwise, the undertaking will be much harder, and you’ll create more work than you need to. Define your goal and decide what you want to learn about your competition before beginning research.
Are you looking to perform a competitive analysis to get ahead in the marketplace? Contact us today.
Jessie Koerner is a Senior Account Executive at Mulberry Marketing Communications, an award-winning full-service B2B communications agency based in Chicago, London and Australia. She has a deep passion for media relations, strategic PR and marketing campaign planning and content creation.