From a marketing perspective, understanding your competition and what they are doing is essential to a successful business. Conducting a competitive analysis will allow you the opportunity to look at your competition with a critical eye on their marketing efforts and will provide you with some insight that can be used to make your startup’s marketing strategy achievable.
Essentially, a competitive analysis does two important things: it determines the strengths of your competitors by determining what they are doing well and where their focus lies, and it also identifies their weakness.
It is crucial to know what the competition is doing, where they are marketing, how they are reaching their customers and what they are providing. This knowledge also enables you to see where the competition is falling short in their marketing approach, so you can highlight the benefits of your own products or services.
Why is it so important?
Marketing success is not always immediately achievable. It takes a period of time to build a successful campaign that can be analyzed and adjusted to work more effectively.
By conducting a competitive analysis, you can evaluate the competition’s achievements and shortcomings so you can develop your strategy in a more insightful and productive manner.
Competitive analysis can provide the following benefits:
- You can create a unique selling proposition of why and how you are different
- It affords you the opportunity to explore marketing ideas that reach a broader audience. You can plan a dynamic marketing strategy that you can improve upon and revise according to your developing needs
- You can improve your offerings to better meet the needs of your audience
- You have the opportunity to focus on brand awareness
- You can gain inspiration and access to what the audience is responding to or what they want more of
- It enables you to learn more about your target audience. How can you reach them, acquire them and, most importantly, keep them?
Related: Competition: Its Power in Business and When to Fold
How to create a brief competitive analysis
Step 1: Identify the competition
Pick three competitive businesses that fall into the large, mid-size and startup space. This allows you to see marketing strategies for businesses with a variety of spending power, audience size and reach, compared to those who are starting up, like you are. The varying perspectives and methods allow for inspiration and greater insight.
Step 2: Visit their websites, analyze their social media platforms and perform a Google search to see their methods of advertisement
Find out where your competition is promoting themselves and compile a list for deeper review.
Step 3: Conduct a SWOT analysis
SWOT stands for strengths, weaknesses, opportunities and threats. For a marketing SWOT, look specifically at the products or services overview, the website, customer reach, the content (including tone and additional blogs or other offerings), social media platforms (including frequency of posts and engagement), direct marketing initiatives (including email campaigns, product and service reviews) and ad purchasing for each competitor.
Where are their strengths and weaknesses, where is there an opportunity to enhance your product or service, and where is the threat to their business from a marketing perspective?
Step 4: Analyze your findings
When analyzing these competitors, identify where they have gaps, where can you improve your service offerings, where can you reach your customers and where can you fulfill a need.
Take a comprehensive look at the results of your analysis and make recommendations to your marketing strategy that will position your company in a way that allows you to be competitive and successful in reaching your target audience.
How can you connect and offer a product or service that has longevity? Where is the competition missing the opportunity to connect, and how can you fulfill that need?
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Final thoughts
Even though this is a quick overview of how to analyze your competitors, it should provide you with a solid starting point to begin your analysis and spark your inspiration. Complete these types of reviews often in order to continually provide the best products and services to your target audience.
A competitive analysis will help you understand your competitors, but most importantly, it will help you understand your own business, so you can provide and connect in a deeper way with your startup’s potential customers.
