Competitor analysis is the first step when starting a new business project, be it a brand or a product. It is also important to attack the market or a new area. If you associate spying on competitors with competitor analysis, you make a huge mistake.
The marketing rules have their roots in the scientific approach, just like the military strategy. Observing and studying, even predicting, the opposing team’s actions are essential always to make pertinent decisions oriented towards the final victory. Therefore, analyzing the competition does not mean looking at their social profiles or checking on a map where they are located. There are much more, and broader considerations are needed.
Advantages of competitor analysis
Identifying competitors only makes sense if you can define their strengths and weaknesses, comparing them with your business. Only in this way will you draw up a correct analytical framework on the opportunities that your project will have and the areas for improvement to work on.
The final benefits?
1 – Optimize investments: you will know what to invest in to offer what consumers expect or want from businesses like yours.
2- Plan marketing actions: your communication will influence and will be influenced by competitors. Preventing their moves knowing what they will leverage will always give you a competitive advantage, placing you among the leaders in user perception.
3- Relevant pricing – you will certainly establish the value of your product starting from the costs that your business requires. Still, your profit margins can also be higher thanks to the feedback that competitors will offer you. The consumer recognizes the value of a product through the design, and the price displayed, even before the quality of the product itself.
The most important elements of competitor analysis
To start- Are you thinking of opening a business or relaunching one? Do you want to penetrate your market better but feel limited by the presence of your competitors?
Start by identifying which ones are, at least those in direct competition with your business according to these parameters:
1 – Geographical area of relevance: consider not only the physical location of the store, but the area covered thanks to delivery or shipping services and the efficiency of the same.
2 – Reputation: comparing yourself with all activities similar to yours could take you a lot of time. Therefore, select only those who can be perceived as your peers, who have a reputation equal to or better than yours.
3 – Services: the services offered can make a difference. Considering those who work differently, it could always be an alternative for the customer.
For example, a pizzeria that only takes-out remains data to be analyzed even for a pizzeria that only serves at the table. The customer may always prefer to stay in their slippers and at home to enjoy a good pizza.
You can use the web to identify the competitors you should include in your analysis. Use the keywords you would like to be found by users and enter them on Google or the main social networks. They will give you the results your customers would most likely find when searching for businesses like yours.
Competition analysis by lists
Don’t just make a bulleted list of all the competitors you want to include in your analysis.
You will need at least 3 lists:
1 – Strengths: fill out the list including only those activities that share the same strengths or strengths that you have identified as determining in the market. You may not even be present in this first list, but this data would immediately give you important information, ie, on which elements you need to improve.
2 – Weaknesses: Include activities penalized by the same weaknesses or deficiencies at the service level. Also, in this case, you don’t need to be on the list, and it will be useful for you to evaluate what absolutely must not be missing in your business plan.
3 – Customer point of view: It is the most difficult list because you will have to think with your customer’s mind. It will be easier to compile this list after listening directly to a sample of users. How do consumers perceive the activities that are the subject of your analysis? And in what order would they place them in a good ranking?
The investigations necessary for this list could influence the previous ones; just ask the strengths and weaknesses of the competitors directly to the public questioned. You can use online survey tools like eye10.io, taking advantage of the power of mail marketing, but only if you have acquired enough contacts in your mailing lists.
Conclusion: Competitor analysis is not a one-time process but an area of study where you should periodically commit your resources. The market changes, new businesses are born, and others close; Your analysis could become obsolete in a few months. The tools like eye10 will help you better understand how your competitors work; Simultaneously, they will also analyze your web performance and find data about your company that will allow you to improve continuously.