Why is Competitor Research Vital for Your Marketing Strategy?
Good competitor research will make or break your business. Take the time to work on your competitor analysis. The point of analysis is to help you understand your business better and focus on important issues. By the completion of the research, you need to have answers to the following questions: Do you understand the industry that you work in? How do you rank in that industry? Who are your direct and indirect competition? What is your added value? How do you compare to each of your competitors and what are your strengths and weakness? Who is your targeted audience?
There are many different techniques and models to conduct competitor research but I feel those 3 are the easiest to understand and to use and they cover all major factors.
The only 3 Competitor Analysis Models You Should Use
The Competitor Array
This is a simple model of analysis that will help you rank each and every one of your competitors by Key Industry Success Factors.
• Define your industry. (scope and nature of the industry)
• Determine who your competitors are.
• Determine who your customers are and the benefits they expect.
• Determine what the key success factors are in your industry.
• Rank the key success factors by giving each one a weighting. The sum of all the weightings must add up to one.
• Rate each competitor on each of the key success factors.
• Multiply each cell in the matrix by the factor weighting.
One of the simplest yet the most important models analyzes your business’s inner strengths and weakness and outer strengths and weaknesses and opportunities and threats. SWOT will help you to understand your business’s added value and detected the threats that your business is facing. It can also help map opportunities that you might have missed without SWOT.
• Strengths – What are the products or services that give you an advantage over your competitors?
• Weaknesses – What are the things that are holding your business back?
• Opportunities – Look back at the strengths that you wrote down and think of how you can turn them into business opportunities.
• Threats – What elements hold you back or hurt your business.
This is an advance version of the PEST analysis model. It is an analysis of the environment that your business will be operating in. Many startups find their target audience in other countries and have to work on localization of their product and get an in depth understanding of an unfamiliar environment. The PESTLE model analyzes the following environment factors:
|Political factors||Economic factors:
|Social factors||Technological factors:||Legal factors||Environmental factors|
|Trading policies||Disposable income||Ethnic/religious factors||Technological development||Employment law||Environmental issues|
|Government changes||Unemployment level||Advertising scenarios||Research and development||Consumer protection||International|
|Shareholder and their demands||Foreign exchange rates||Ethical issues||Trends in global technological advancements||Industry-specific regulations||National|
|Funding,||Interest rates||Consumer buying patterns||Associated technologies||Competitive regulations||Stakeholder/ investor values|
|Governmental leadership||Trade tariffs||Major world events||Legislations in technological fields||Current legislation home market||Staff attitudes|
|Lobbying||Inflation rate||Buying access||Patents||Future legislation||Management style|
|Foreign pressures||Foreign economic trends||Shifts in population||Licensing||Regulatory bodies and their processes||Environmental regulations|
|General taxation issues||Demographics||Access into the technological field||Environmental regulations||Customer values|
Online Tools that will Help You with Competitor Analysis
• SimilarWeb is a great tool to get a ton of information on your competitors and all you need to do is enter their domain. You’ll get information such as traffic sources, search keywords including CPC costs to subdomains, etc. All in all, it’s a great tool to have in your toolbox.
• Spyfu is another one that can help you find out what your competitors SEO and PPC technique is. It’s more AdWords focused and it provides you with ad rank and bidding. The site can help you a lot with keyword research and AdWords strategy.
• Google Alerts monitors your competitor’s online reputations by sending emails whenever Google’s crawler finds new mentions on the web.
• What WordPress theme is that is a great tool to see what lies behind your competitor’s website. If it is a Word Press based site, this tool will give you the breakdown of what WP theme they use and the installed plugins
After completing the research, make sure that you have a full understanding of the following:
• Understanding of the industry your business operates in and how do you rank in it
• You mapped your strengths and know how to turn them it to a business opportunities
• Find your added value and define your targeted audience and niche
• You understand the environment in all of its aspects
I know that it is a lot of work but competitor analysis is a crucial part of building your marketing strategy and identifying your business KPIs. Also, it’s important to stay alert and repeat competitor analysis every six months.