Any brand’s success lies in its struggle to remain ahead of its competition and offering value-added products or services to consumers. Conducting a competitor analysis plays a vital role in this aspect to build a strong and successful brand. Competitor analysis is documentation that helps evaluate strategies that competitors use.
Additionally, it also helps determine the competition’s strengths and weaknesses compared to your service or product. Understanding and implementing the knowledge gained through analysis helps build future strategies, brand health, and effective management. Analysis of competition gives you an edge to overcome the shortcomings. It gives your brand a distinct advantage to stand toe-to-toe or even surpass your competition.
Importance of Competitor Analysis for Businesses
The primary aim of competitor analysis is to identify the current and potential competition. Achieving competitor insights relies on two steps; the first step is to look at the market from the consumer’s perspective. You have to group all the competitors to identify the pattern of attracting potential buyers. The second step is to group them according to the various successful strategies and understand their motivation.
Once grouped, you can study the various strategies and tactics they use and identify vulnerable areas. Analyzing the strengths and weaknesses of a competitor gives you this insight. However, strengths and weaknesses are all about the presence or absence of critical skills and assets to survive and dominate the market.
Today, the paradigm of the market has shifted from traditional marketing to digital marketing. You cannot overlook the importance of knowing what other brands do online. The information becomes the basis of your next digital strategy. With this idea in mind, competitive analysis should become an essential part of developing a digital marketing strategy. After a thorough examination, you can implement a plan and use a traffic checker to monitor your strategy’s progress and success continually. It will let you determine your standing compared to all the rivals standing in the digital arena.
Benefits of Competitor Analysis
Helps Tuning and Developing a Unique Selling Proposition (USP)
The deciding factor that sets you apart from your competition is customer consideration. Competitor analysis gives you an insight into what other brands consider as their defining aspect. When analyzing competitor USP and comparing it with your own, you take points that surround your brand. These points give a clear picture of your distinguishing factors. The best way to establish USP is to compare mission statements, integrations, products/services, value proposition, and anything else that your brand can leverage over the competition.
Improvement in Existing Products and Services
Consumer needs and expectations grow as the business expands. To keep yourself in the consumer’s eyes, you have to evolve your products/services accordingly. One way to achieve this is to analyze existing customer reviews as well as read competitor review. Comparison of reviews allows you to tap into the market deeper and anticipate customer needs for the future. You will also gain insight into what the competitor has planned for the future and take measures to stay a step ahead.
Establish Brand Benchmark
Benchmarking is a process by which a brand sets a foundation point to measure their growth potential. Startups and established businesses benefit from benchmarking after unlocking and analyzing historical data. The data points towards customer opinions regarding you and your competitor and yields a great understanding of growth and scalability. By understanding the past and present of the brand, you can make improvements and increase ROI.
Identifies Gaps in Research and Development
Competitor analysis goes beyond feedback and consumer-centered content. It gives an idea about the talent your competitor has hired. The identification helps in the R&D section to bring anticipated trends forward. It also helps paint a broader picture of the workplace culture and other factors that increase brand loyalty.
Discovery of Threats
The most beneficial aspect of competitor analysis and its dynamic nature is to keep yourself updated with market threats. You discover the challenges that your competitor faces to make contingency plans accordingly. You can anticipate potential changes in the market, risks, and demand patterns to turn them in your favor. Once you know about threats, you can place yourself in a better position to deploy countermeasures and come out on top.
What Competitor Analysis Helps us Understand?
- One of the main reasons for competitor analysis is to comprehend competitors’ advantages and disadvantages.
- Analyzing the competitors help you formulate various strategies for short and long term effectiveness. By determining your position in the market, you take early steps to streamline communications and operations.
- You create a more diverse buyer persona and reveal the objectives of your competitors.
- The analysis helps you learn the reasons behind unsuccessful brands or failed campaigns. The learning gives you guidance in forecasting the assets and skills needed to beat the competition and emerge as the market leader.
- Competitor analysis guides you in fortifying your strategies and face the challenges that come your way.
Customer Perspective as a Source of Analysis
Take Customer Personas as a Start
The first place to start is to create customer or buyer personas that are descriptions of people involved in decision-making. Before running an analysis, read your existing personas or develop new ones for better understanding. Put yourself in consumers’ shoes and determine the factors that they want in a brand to make a buying decision. Take your time and develop a buyer persona as the initial step of competitor analysis.
Understand their Journey
After you have understood buyer personas, the next step is to understand their buying journey. Map the point from where they start researching and then make a purchase decision. It is better to approach a customer’s journey from a consumer’s perspective using surveys and better understand their purchase behavior.
Gaining Most Value from Competitor Analysis
- Run regular competitor analysis to understand the market from the perspectives of consumers.
- Design a systematic approach for competitor analysis to run it regularly and identify changes immediately.
- Decide which rivals should be analyzed by reviewing them and ensure their relevancy.
- Decide the data that is fit to capture and study. Capturing and collecting data makes it easy for you to learn the competition and convert it into a SWOT analysis. SWOT analysis works as an executive summary to decide the right course of action.
Competitor analysis is a factor that determines a turning point to establish a successful brand. The importance of rival examination lies in the fact that you gain valuable information to dominate the market and increase your customer base. You can leverage both traditional and digital aspects to strategize and gain a competitive advantage.