Learn How to Use a Competitive Analysis to Assess Your Marketing Strategy
“Good enough” is not good enough. As Jim Collins stated at the opening of his book Good to Great, “Good is the enemy of great.” If you settle for good instead of striving for great, your customers will switch to a competitor whenever they offer a better deal. Therefore, it’s important to put things into context with a competitive analysis.
A competitive analysis is a tool that you use to get a deep, nuanced look at how you’re doing in comparison to your top competitors. It involves analyzing your operations, marketing, and other areas, and concretely contrasting them with your competition. It’s your guide to being “great” and not just “good.”
Here’s why a competitive analysis is important, as well as some tips and tools for how to perform one.
Why Should I Do a Competitive Analysis?
Research found that 67% of strategic planners believe companies should consider competitor reactions when making decisions. However, less than 10% recalled having done so themselves, and less than 20% expected to do so in the future. So, what gives?
It’s easy in the hustle and bustle of running an organization to get so caught up in your daily operations that you forget there’s a world outside your office. However, if you’re not putting what you do in context of what your competitors are doing, how do you measure your success?
For example, you might be making more sales now than you were this time last year, or a few years ago. Yet, what if your competitors are still making far more sales, or if they’re rapidly increasing their market share? In that case, you may be doing better in a vacuum, but relative to your competition, you’re doing worse.
Unfortunately, business doesn’t happen in a vacuum. Your customers don’t just only look at your company. Your customers try to gather as much information as they can and judge you relative to your competitors.
In fact, studies show that 89% of consumers do competitive research online before a purchase. The average B2B buyer is 57% of the way through a purchase decision before they even talk to a sales rep. Your clients are effectively doing their own competitive analyses. Doing one yourself will help you see through their eyes.
A well-executed competitive analysis helps in the following ways:
- Provides a more objective view of your market position.
- Helps you understand your target audience’s decision-making process.
- Illustrates where you should be concentrating your marketing efforts.
How Do I Perform a Competitive Analysis?
While there’s no single correct way to perform a competitive analysis, we’ve developed a method that serves our clients well. Once you’ve chosen 2-4 top competitors you want to compare, it just takes four steps:
- Determine what metrics you want to analyze,
- Make a plan and gather the information,
- Use online tools to deepen your analysis, and
- Put it all together into a useful format.
What Questions Do You Want Answered?
Before you can do anything else, you have to set your goals. In a competitive analysis, that means laying out all the questions you want to answer with your research.
It helps to start by establishing a few general categories before filling them in with questions. We use categories like operations, marketing, sales, content, SEO, and social media. Depending on your focus, however, your categories may be different.
Next, draft questions to fill each category. It may be helpful to have your team brainstorm together to create large lists for each one. Then you can cut it down to a more manageable length that makes sense.
Here are a few general examples of questions we try to answer as part of our competitive analyses:
Products & Services
- What is their market share?
- What are the primary industries they serve?
- Do they sell online or through brick-and-mortar locations?
- How does the company differentiate their products/services from competitors?
- What channels are they selling through?
- Who is their target audience?
- Do they have multiple locations? If so, how does this give them an advantage?
- What are their potential customers’ objections or reasons for not buying? Why do existing customers stop using their service?
- Do they have a company blog? How often are blog posts published?
- Do they post webinars or videos? Do they have a podcast?
- Does the competitor create custom infographics or other graphics?
- Are there testimonials or case studies on their website?
- What websites do they have reviews on? Are they mostly positive or mostly negative?
Content & SEO
- Is the content structured for readability? (Bullets, headings, bolded text, etc.)
- What types of topics are they covering?
- What keywords are they focusing on most? How well do they rank for your primary keywords?
- Does their content get shares and reactions on social channels? What topics?
- What social channels do they use?
- How often do they post? Do they get engagement?
- How many fans or followers do they have on their social channels?
- What is the primary social media channel with the most engagement?
How Will You Gather the Information?
When you’re done, it’s time to plan out how you’ll actually research the answers to those questions. You’ll need to be able to get relevant information to answer them both for yourself and for each of your top competitors that you want to analyze.
You have a few different options for how you can obtain the info you need. At first, you’ll want to start with online research. You should be able to uncover a lot
just from investigating competitors’ websites and social media profiles. You can also scope out their locations using Google Maps and Street View, check employee salaries on Glassdoor, search for mentions in the news, and even request an online quote for prices.
Another source of potentially valuable information is your customer base. Customer interviews are a great way to figure out why they chose you over your competitors, what factors they considered, how they perceive your companies, etc.
Next, you could do some direct research. That might involve calling the competitors from a phone number not associated with your business, or sending someone to check out their sales floor. Depending on your industry, you may be able to talk to a competitor’s sales rep or collect marketing handouts while posing as a potential customer. This isn’t always possible, but can help you get really concrete information.
Finally, there are online tools you can use to get deeper information about their online marketing, including their SEO efforts and social media activity. Let’s go over some of the more useful ones.
Which Tools Can Deepen Your Analysis?
There’s only so much you can learn from looking at the front-end of a competitor’s website. It also may not be clear how your social media activity compares just from glancing at recent activity. Here are some tools you can use to deepen your analysis and make it more useful.
This site lets you see what tech your competitors are using for their web development. Are they using WordPress to manage their content? Do they use Google Analytics and Facebook Pixel to track their SEO and social? Are they using WooCommerce for their ecommerce platform? Do they have plugins like Yoast and Wordfence? If so, then BuiltWith will show you all this and more.
SEMrush makes it easy to compare social media, paid ads, backlinks, and other metrics between you and your competitors. You can view audience sizes, activity, and engagement across social media platforms, all visualized so it’s easy to understand. You can organize the information with date ranges or by post type, hashtag, number of comments, etc. It also lets you see competitors’ paid ads, how well they’re doing, and what keywords they use. You can even compare how many backlinks you’re getting.
This one’s more specific to social media. While SEMrush gives you a great visual overview of social media activity and engagement, Sprout lets you dive deep into the details of individual social media platforms. For example, you can compare Facebook audience growth across several of your accounts, against specific competitors.
How Will You Put It All Together?
All of that data won’t mean anything on its own. For it to be useful, you have to synthesize it into a format that’s easy for your team to draw insights from.
So, one of the best ways to ensure a comprehensive and useful competitive analysis is to enlist the help of marketing professionals.
At Frontier Marketing, we perform detailed competitive analyses for our clients throughout the Chicago area. We then translate those analyses into easy-to-understand SWOT analyses and concrete recommendations. If you’re ready to put your business in context with a competitive analysis but aren’t ready to take on the task all on your own, give us a call and let’s discuss your options!