Simply being aware of your competition isn’t enough to get ahead of them. You need to analyze what they’re doing, how they’re doing it, and then figure out how you can make your brand stand out next to them.
When you and your competitors are lined up in front of customers, you want them to pick your brand, but how can you get that result if you’ve nothing to benchmark against?
In this article, we’re talking you through how you can perform a competitor analysis to ensure you’re ahead of the game. Consumers have so much choice now, so let’s make sure you’re the obvious one.
Why Is It Important to Research Competitors?
All brands are after one thing: market share. More market share means you have a competitive advantage, but it also increases your bargaining power — particularly when negotiating better pricing from suppliers.
And how do you get that bigger slice of market share? By conducting a competitor analysis.
Competitor analyses help you understand your competitors’ weaknesses and use them to your advantage. Their weaknesses can become your strengths — which presents an opportunity for your brand to get ahead. A competitor analysis helps you strengthen and clarify your value proposition.
How to Conduct Competitor Analysis in 3 Steps
There are three essential steps in competitor analysis: identifying your competitors, analyzing their customer journey, and reviewing their marketing strategies.
1. Identify Your Competitors
Once you’ve identified your competitors, consistently measuring their performance helps you understand your own growth as a brand.
So, how do you identify your competitors? First, you need to understand your brand. Who are your customers? What is your product or service? Now, go out and search for other companies with a similar offering. You should focus on both direct competitors and indirect competitors.
To find your direct competitors, market research would suffice. A quick Google for your product type will throw up all competing search listings.
Take a look at their website to ascertain whether you class them as a competitor — i.e. they market to the same audience, their product is pretty much in the same ballpark — as in, it solves the same problem.
You could keep tabs on all competitors, but that’s not realistic. So pick a mixture: some other competitors around the same level as you and the best of the best (the market leader). Remember, you need someone to aim for.
By indirect competitors, we mean companies who market to the same audience you do but are an alternative to your product or service.
As an example, let’s look at Freshly and Graze. Both are food subscription services but both have different target audiences.
One targets people wanting snacks, and the other fully-prepared, fresh meals. Graze wouldn’t need to keep too close an eye on Freshly, as they’re an indirect competitor. But if Freshly started offering a treat box, then they’d step into the direct competitor group.
That’s why brands need to keep indirect competitors in their peripheral vision — one day, they might diversify.
2. Analyse Your Competitors’ Customer Journey
You might not know what your competitors’ are planning behind the scenes, but they’ve got a website with all kinds of information just floating out in the public domain, waiting to be explored.
Visit your leading competitor’s website and take the journey through their site as if you were a customer. Are there any nice touches you think you could apply to your journey? Maybe you like their welcome email or their cart prompts?
Take time to look at their pricing strategy. Are you offering comparable pricing? If not, is there a reason? Are you a cheaper alternative? What is it that makes them command that price? Is it just their higher level of brand awareness?
To get a real idea of what their weaknesses are when it comes to their customer experience, head over to Trustpilot. On Trustpilot, you can filter reviews by "bad", "poor", and "average" and scan through them to pick up any patterns to customer complaints.
While you’re analyzing customer complaints, stop by their Twitter page and click on "Tweets and replies" to gain further insight into their customer experience.
Analyzing customer journeys, particularly of the brands that are storming way ahead with their market share, is crucial to understanding what your similar audience wants. Remember, they’re market leaders for a reason.
Exercises like these can help you identify the weaknesses of your competition without resorting to invasive detective-worthy tactics.
3. Review Their Marketing Strategy
Reviewing their marketing strategy is another crucial step in your competitor analysis. You need to gather the information that tells you how they’re marketing their products, find out what they’re doing differently to you — and the same as you. If they’re performing better at the channels you also target, why?
Other questions to think about:
Do they have a blog?
Are they creating blog content regularly?
What kind of blog content are they creating?
What are they doing with that blog content? Repurposing, etc.?
Which social channels are getting the most engagement?
What kind of social content performs the best for them?
How often do they send email campaigns?
What kind of content is in their emails?
There are a lot of questions to ask yourself at this stage, but they’re all answers that can help you shape your future strategies and help benchmark your brand going forward.
3 Tools to Help You Analyse the Competition
You can only analyze so much manually, but that’s why tools and software exist — to help you gain better insights which ultimately means better marketing decisions
1. SEMrush
SEMrush packs many marketing tools into one platform. They market themselves as an online visibility platform, supporting you as you analyze and improve every aspect of your digital marketing. From SEO, PPC, and content marketing to their market explorer — they’ve got you covered.
The market explorer tool is pretty sophisticated, helping you truly understand the competition you’re up against. Not only does the tool promise to help marketers reveal key players in any industry, but it also enables the user to analyze new and emerging markets - and we all know that analyzing new markets and niches means one thing, and that’s swiping a bigger chunk of the market share.
With SEMrush, you can effortlessly compare growth rates against competitors, establish the game changers, the niche players, and the established players — all at a glance.
2. Facebook Ad Library
Knowing what your competitors are offering their customers gives you the opportunity to undercut their offer, or plan a better, more attention-grabbing offer to overlap theirs. Facebook Ad Library is like a window into your competitors’ sponsored ads, all in one place.
You can view all sponsored ads or filter by Facebook, Instagram, Messenger, or audience network and take a peep at their live offers.
We searched for "Headspace" — a leader in their field, bringing meditation to the masses — to see what kind of offers they’re currently peddling on social media:
Source: Facebook Ad Library
You can see they’re aggressively pushing 30% off their membership across different countries. It’s insights like this that can help you keep tabs on your competitors' marketing strategies so you can prepare a counter-campaign to challenge them for new customers.
P.S. Learn how Headspace replicated successful brand campaigns to accelerate growth in our Headspace case study.
3. Latana Brand Tracking
We had to go ahead and put Latana on the list! Latana has helped many brands use brand monitoring to gain insights into their competition. Understanding how people perceive your brand gives you power, for sure, but imagine being able to analyze audience performance across your competitors, too?
Our tool provides unprecedented flexibility in exploring and comparing brand data for you and your competition. It's possible to customize your dashboard to fit your needs using combinations of geography, time period, KPIs, brand, and audience segments.
And the best part? Lantana has a dedicated team of experienced researchers that provide end-to-end support, using tried and tested methodologies to ensure data you can trust.
Latana is an essential tool for any brand trying to gain market share. If you don’t know how you measure up to the competition, how can you plan where you’re going?
Final Thoughts
HelloFresh overtook 100s of meal delivery competitors and remain the number one meal subscription service, turning over 3.75 billion euros in 2020 (partly due to COVID-19).
How did they overtake the competition and sustain their lead? They’re expecting to grow a further 20-25% in 2021, by the way. In an interview with Inc.com, co-founder Dominik Richter puts their success down to data.
Richter says they focus on their target customer by analyzing data, fine-tune their marketing strategy (again, using data), and continue to improve their offering by using... more data.
But having access to data isn’t enough. It’s also how you extract information from that data and which tools you use to make sense of that data that matters.
Data unlocks opportunities for any brand, regardless of sector, product, or service offering. Data gives you precise answers to the many questions you have about your audience — their perception, where you sit in the marketplace, and how you can get ahead of the competition.
That’s why competitor analysis is so important to everything you do for your brand. Without it, you’re treading water, pushing marketing tactics out into the ether with no direction.
So go out and experiment with different tools and see what information you can unearth to help keep your brand at the forefront.
