Understanding your competition is fundamental to developing a sound business strategy. But how do you go about gathering competitor information, and what areas should you focus on?
In this article, we outline how to perform a competitor analysis in a few easy steps, and provide links to free templates.
Why competitor analysis matters
Competitor analysis involves identifying your main competitors and assessing their websites, marketing strategies and campaigns, pricing structures and shipping or delivery systems.
In this way, you can determine your competitors’ strengths and weaknesses. You’ll also be alerted to any areas where competitors are currently offering customers a better experience or greater value than you are.
The results can help you create a strategy that will give your business that all-important competitive edge.
Nothing stays the same, especially in our current, technology-driven economy. So it’s best to repeat the process of competitor analysis fairly regularly. This will alert you to new competitors and any significant changes in approach by your existing competitors.
Step 1: Identify your main competitors
The easiest way to identify your main competitors is to search online. Conduct searches associated with the products or services you offer and your core business idea. It’s likely that your primary competitors will pop up on the first page or two of the search results.
These are the companies that have the best keywords and SEO strategies – and the ones most likely to poach potential customers.
Step 2: Conduct website and social media analysis
Once you’ve identified your main rivals, visit their websites and social media profiles. Consider what works well and what doesn’t, in terms of design, content and the online processes for buying your competitors’ products or engaging their services.
Assess how they’re engaging with their customers online – for example, through blogs, podcasts, videos, FAQs, buyer guides, case studies and so on. What’s working well? Also, consider how your competitors are using social media sites like Instagram, Facebook, LinkedIn and Twitter, and how many people are following them.
Step 3: Pinpoint important keywords
Identify keywords that your competitors are using effectively online. To do this, you can use a keyword analysis tool such as Google’s Keyword External tool or a number of other free keyword research tools. Typically, you can simply enter a competitor’s website address and the tool will return a list of keywords currently being targeted on that site.
These keywords are a good starting point for further research. Choose keywords that match your market and have good search volumes, and test the results they have when used in searches. This can help you pinpoint effective keywords to use in your own online marketing.
It can save your business time and effort to emulate SEO strategies that are already working for competitors. Doing this may also help drive more traffic to your company’s website.
Step 4: Read customer and company reviews
Independent reviews can help reveal what a business is doing well, and what it isn’t. Try to find as many reviews on your competitors as you can. For example, look at reviews on the companies’ websites and social media platforms, and check customer reviews on sites like Hellopeter and Google My Business.
What weaknesses can you capitalise on, and are there particular strengths your business could develop?
Step 5: Compare pricing structures
Find out what your competitors charge for their products or services. This can give you a better idea what your target market is prepared to pay for similar products or services, and how much leeway you have when setting your own prices.
Of course, not all effective business strategies involve aiming to be the cheapest. People are generally prepared to pay more for an enhanced customer experience, a product or service that better meets their needs and faster or more efficient delivery.
Free competitor analysis templates
A template can guide you through the process of conducting competitor analysis and recording the results.
Try these links to competitor analysis templates, which you can download for free:
What we offer at The Workspace
At The Workspace, we don’t help businesses with competitive analysis. However, we do support entrepreneurs and small businesses by offering affordable, fully serviced offices and coworking space in prime business hubs. All our clients have access to meeting rooms, boardrooms and a range of business services.
Central, affordable office space and easy access to everything you need to run a business can contribute to your business’s competitive edge.