Opinions expressed by Entrepreneur contributors are their own.
In this digital age, competition seems to be more rampant than ever. The attention of customers is scattered due to the many choices they enjoy. Proper competitive research is fundamental to shield and set your business apart.
The best way to stay ahead of your competition is to be aware of them. If you’re interested in competitive research, keep reading. Here’s the ultimate guide on how to use competitive analysis effectively.
What is competitive research?
Competitive research is the act of gathering and analyzing information about your industry. It helps you understand your competitors’ strengths and weaknesses. Effective competitive research is thorough. It looks at your competitor’s marketing strategies, competitive advantages and content strategy.
The primary goal of competitive research is to establish what your competitors are up to and the threat they pose to your business. That way you can create more informed marketing strategies and even reposition to overcome these threats.
It’s crucial to conduct competitive research if you’re serious about the sustainability of your business. Otherwise, your competitors may outshine you and chop your market share.
Here are the reasons you should think about competitive research.
Understand your market
Fifty percent of businesses fail within the first five years. And one of the primary reasons they fail is due to a lack of uniqueness and value. Building a robust audience without a unique value proposition or selling point is challenging.
Competitive analysis helps you discover the core strengths and strategies of your competitors. It also shows you what’s lacking in your market. The ability to understand your competitor and figure out their weakness is the key to improving your USP to your customers.
Improve marketing processes
Your customers buy from you because your products fulfill their needs. If they prefer your competitors to you, it means your competitor’s product, service, or marketing is better.
You need to understand shopping dynamics and the reasons customers buy your products. You’re likely to get caught in price and convenience wars without competitor analysis.
Market research helps you look at the big marketing picture. You’ll understand what drives customers to buy and why some choose rival products. Competitor information can inform your new marketing strategy.
Discover market gaps
A SWOT analysis of competitors partly focuses on competitor weaknesses and their opportunities. These two aspects can help you discover market gaps in your industry.
You’re always in a battle to keep your market share and expand into new segments or areas. The best thing that can happen to you is to uncover and capitalize on competitor weaknesses.
Performing a SWOT analysis can also help you discover underserved audiences and unaddressed needs in your industry. You can maximize your research data to position your small business as unique and cater to the underserved niche.
Informs your content strategy
Effective content marketing starts with market research and competitor analysis. You need to know what keywords and strategies your competitor uses before launching your content strategy.
One big part of content marketing is doing competitive content analysis. You need to understand the gaps and opportunities in your competitor’s content marketing strategy.
Competitive content analysis will thus involve looking at your competitor’s product strategies, quality of content, and SEO. After this analysis, you can create unique and more informed content to differentiate your business.
Keep reading below to learn how to conduct competitive research for your business.
Identify your competitors
The primary reason to do business research is to know who you’re up against. And that is your competitors. They’re inevitable, and you must know how to counter them to stand a chance in your market.
Your competitors can be physical or digital. Physical competitors compete with you for your market share often locally. Digital competitors are those businesses that compete against you through digital marketing.
The first step to finding your direct or physical competitor is to conduct market research. Talk to your current customers to see which products they’ve considered or liked. Look for those businesses selling a similar product or an alternative to your product.
Evaluate online forums and reviews to investigate your audience’s interests. Look for the products or services that earn more recommendations and ratings in your industry.
Conduct an SEO analysis to identify your digital competitors. You can determine which businesses are likely to lure your audience by doing a competitive SEO analysis. These could be businesses using keywords like yours.
Your digital or indirect competitors create content that will likely attract your customer. Another way to find your digital competitors is to look at Google search engine results. Search on Google or a professional keyword research tool using your primary keywords and analyze the results.
Review competitor products
The next stage of competitive research is competitive product analysis. This is a thorough analysis of a competitor’s products to find their strengths and weaknesses.
As a start-up business founder or small business owner, you need to know whether your product has what it takes to succeed. Product analysis offers you data that you can use to innovate your products. Product analysis helps you to understand whether existing products are helping customers. Customer feedback about competitor products can help you distinguish and set your product apart.
The easy way to conduct a competitive product analysis is to buy a competitor’s products. You’ll get into your customer’s shoes which helps you understand their needs. Visit all product pages on your competitors’ websites and review the description. Look at the details and benefits of their product. Establish the more likable features of their product and identify what their customer may not like.
Analyze competitor sales funnel
Analyzing your competitors’ sales funnel can provide valuable insights into your customer’s needs. A sales funnel shows all the stages competitor clients go through before buying.
You can establish what attracts people to their business and their challenges before buying. For example, you can establish users’ experience with a competitor’s website or content.
You want to understand your competitors’ sales and marketing methods. Analyzing a sales funnel is the way to know how your competitors’ sales processes look like.
If they’re attracting many customers, you may want to know how they create high-quality lead magnets. You’ll also want to learn more about their content market strategies.
A competitor’s failures across their sales funnel can help you discover ways to boost your users’ experience. Look at the causes of their bounce rates, abandoned carts and poor conversions.
The best way to analyze your competitor’s sales funnel is to sign up for their email list, consume their content and audit their website. Find out how they approach customer engagements and user experience.
Review your competitors’ marketing approach
A high-level competitive analysis looks at competitor marketing approaches. Your competitors are likely beating you because of their marketing skills and creativity.
Tracking your competitor’s marketing strategy is the easiest way to identify their strengths and weaknesses. The first step in developing a successful marketing strategy is understanding your competitor’s tactics.
Marketing strategies are also evolving fast. Your competitors can leave you behind if you’re not keeping up with the times. Business research can show trends in marketing and highlight gaps in your strategy.
The best place to learn about your competitor’s marketing approach is to check their website—review SEO aspects like titles, meta descriptions, keyword use and content style.
Keep track of your competitors by setting alerts on their brands. You can get updated whenever they’re mentioned online or on Google. This way, you can also know when they share new content.
Look at their social media strategy
Social media is one of the most popular engagement tools. Seventy-three percent of businesses believe social media has been effective for their marketing efforts. And 54% of social browsers use social media to look for products.
A social media competitive analysis is crucial to figure out how to dominate and appeal to your audience. It’s the secret to standing out on social media. You’ll want to know which platforms your competitors are using and how they’re using them. This way, you can choose the right targeting platforms and figure out the right content for your audience. It would help if you also looked at your competitors’ social marketing strategy to build an informed and effective strategy. Look at your competitors’ content style, content type and posting times.
Use analytics to measure your engagement rates and compare results to your competitors. A benchmark will help you know if your social marketing strategy needs improvements.
Identify areas for improvement
Competitive research reveals market gaps and arms you with data to improve your marketing strategy. It’s a tool that helps show your current stand plus your potential in your industry.
You need to make the most of competitive analysis data to take your business to the next level. And for success, you have to normalize competitive research in your business.
Continue to track and observe how your competitors evolve. Keep your eyes on trends and the latest market practices to stay ahead of your competition. This way, you can maintain an up-to-date marketing strategy to boost your competitive edge.
Master how to conduct competitive research
As a small business or start-up founder, you can not risk without knowing what and who you’re up against. Many proactive competitors are striving to control your industry. The way forward is to learn and master how to develop a foolproof competitive research strategy for your business.