Starting a Competitor Analysis – Do I Have Any Competitors?
Do you know how to conduct a competitor analysis? As a small business, you are likely to be in competition with other businesses to attract customers. You may think that the product or service you offer is so unique that no other business offers the same – but is that what your potential customers think?
If your product/service is that unique, you may have a problem finding customers who don’t know the product/service exists – but that is a whole different blog post.
Why Should I Conduct a Competitor Analysis?
I wouldn’t suggest getting too hung up on what your competitors are doing on a (say) weekly basis, but I would suggest undertaking a competitor analysis every 6 – 12 months and certainly when starting out in business. If you can understand your main competitors – from the point of view of your audience – and how they are promoting their products/services, you will be able to identify:
- The ways you can make your offering different – price point, customer service, added value, etc.
- Different content you can produce to attract your ideal audience. (Identifying your ideal audience is covered in a separate blog post).
- What marketing content seems to have worked for your competitors (and not worked) so you can put your own spin on it. Don’t copy ideas directly as that doesn’t do anything for your reputation, but take a concept and add your own branding/ideas and viewpoint.
- What social media channels they are using and which are resulting in engagement. Make sure comments/likes or not just from the same people/staff.
- Successful engagement will come from the audience of the business.
- The keyword phrases they are using on their website, hashtags, and social profiles. You might find new phrases you haven’t thought of or see they are not making use of optimisation across websites and social.
- The customer journey on the competitor’s websites. What ideas can you use to improve the customer journey on your own site?
- The language used on all their marketing content. Do you need to change the language you use?
- Any reviews the competitor has received – both positive and negative
Who Are Your Competitors?
From the point of view of your audience, you need to consider both direct and obvious competitors and indirect competitors.
An independent coffee shop (Cathy’s Coffee) has just opened in my nearest town. There are direct competitors – other independent coffee shops and tea rooms as well as a global brand.
There is also indirect competition such as a book shop, delicatessen, a bakery and pubs that offer coffee and an antique shop. Even the curry house sells takeaway coffee during the day.
In addition, there is competition from substitute products. Particularly post Covid, drinking high-quality coffee at home is an alternative to getting your coffee from a coffee shop.
The owner of Cathy’s Coffee needs to consider each of the competitors and note down:
- How the experience offered by Cathy’s Coffee is different.
- What products and services are offered by Cathy’s Coffee compared to the competitors.
- Opportunities for promotion include channels, keywords/hashtags/competitions based on what the competitors are doing/are not doing.
- The strengths/weaknesses of the competitors compared to Cathy’s Coffee.
- The changes that need to be implemented by Cathy’s Coffee to compete with the competition.
How Many Competitors Should Be Reviewed?
You need to be realistic about who your competitors are. If you are a local business, you can easily identify the competitors within your location. As a business offering products or services nationally you may find it harder. In my opinion, you need to identify the main competitors who will be found by the audience who will realistically also find you.
For example, Concise Digital offers web design services (amongst other things) – as do many businesses in the UK. We can look at our competitors locally – in the Faringdon / Oxfordshire area. However, since much of our business comes from personal referrals based on business networks I belong to, it would make sense to also consider website designers who also attend the same business networks.
This may still give me a long list so I would tend to select 4 – 6 competitors to identify how we can position ourselves to look different.
This Seems Like a Lot of Work
Competitor analysis can be very informative and give you lots of ideas for content and how you can position yourself for the next year. It can make a real difference to your business’s success. However, it is only worth doing if you are going to make an action list, prioritise actions based on quick wins/ most impact, and set a timeline to implement each action.
HubSpot has a competitor analysis template that you can download for free if you subscribe to their mailing list. It contains all the information for you to look for in your competitors and your own business.
Let us know if you have any questions or would like any help conducting your competitor analysis.