Competitor Analysis

What is a competitor analysis?

A competitor analysis is when an organization sets out to evaluate and categorize their market or industry competitors to have a better understanding of their strengths, weaknesses, and processes with a direct contrast to their own. These competitors will have similar services, pricing, products, strategies, or audiences and should be evaluated based on a predetermined set of business criteria. 

When done correctly, and with the right competitive intelligence tools, a successful competitor analysis makes it possible for a business to see competitors through the eyes of shared customers as a way to identify areas to improve for continued success. 

Steps of a competitor analysis

As an organization conducts a competitor analysis to evaluate other companies, products, or marketing strategies, it’s important to follow these steps for the analysis to be as useful as possible. 

• Choose the competitors to analyze within a sector or market
• Determine the aspects of a competitor’s business to analyze
• Narrow down where to start looking for the data, whether it be their website, within search engines results pages, financial reports, or social sources
• Apply insights to the business model as ways to improve and grow

Basic elements of a competitor analysis

What a competitor analysis will look like will depend on the industry a business is within. The common elements that are typically included in a competitor analysis are:

• Website features: search tools, design, menu layout, product images, calls to action
• Customer experience elements: mobile design, customer support workflow, checkout process (if applicable)
• Social media strategy: platforms used, posting frequency, customer engagement
• Content marketing: content types, posting frequency, SEO strategy, link building strategy
• Marketing initiatives: promotion types, discounts, or coupons
• Email marketing strategy: abandoned card campaigns, newsletter, promotions
• Customer reviews: common complaints, the language used to describe products/services

Benefits of conducting a competitor analysis

Whether conducted by business owners, startup founders, marketers, product managers, or entrepreneurs, there are many benefits to seeing a competitor analysis through from start to finish.

• Narrow down the ways a business, service, or product needs to be improved
• Remain up to date on marketing trends, industry best practices, and product offerings
• Provide insights into how to adjust processes to better serve an audience or group of customers
• Uncover new strategic opportunities to improve products or services
• Better set benchmarks and measure future growth of an organization 
• Come to more informed decisions
• Discover new ways to speak to customers 
• Reveal where competitors are throughout every stage of business

Competitor analysis best practices

Before a business begins a competitor analysis, an understanding of the best practices involved is key to ensure no data is left uncovered.

• Understand who the direct (offering the same service or product in a similar geographical area), indirect (offering the same service or product in a similar area but serving a different need or audience), and tertiary (offering a product somewhat similar but doesn’t compete) competitors are
• Conduct the analysis over the course of multiple days
• Learn the technology or software a competitor is using
• Deep dive into a competitor’s website, customer experiences, pricing models, social media feedback, online reviews, company culture, and market position
• Pinpoint the ways a competitor is unique and what is being advertised as their best quality
• Use tools to continuously stay aware of competitors and fill any business gaps
• Make any improvements deemed necessary to remain a successful organization