Intuit QuickBooks Small Business Index, December 2024
MARKETING
10 easy steps to conduct a competitive analysis to grow your business
Every niche has competitors. It’s unlikely that you’ll be the only provider of a service or product in any industry. Spending some time on competitor analysis is an integral part of growing a small business. Learning what other brands are up to and what strategies they use can help you formulate your own marketing strategy and plans.
Using the right competitor analysis tools, you can quite easily identify your competitors and learn more about their engagement, strategies, and tactics.
If you conduct a business competitor analysis properly, you’ll end up with plenty of quantitative and qualitative data to get a sense of the competitive landscape. You can then use these insights to inform your business plan and formulate your own marketing strategy.
There’s a lot of hype about the benefits of a competitive market analysis and research, but is it really all that? We think so. And after learning more about how it can help your small business in this article, we hope that you will, too.
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What is a competitor analysis?
A competitor analysis is the process of identifying your main business competitors and conducting research to evaluate their strengths and weaknesses.
Once you know your competitors in business, it usually involves researching their products, services, sales, and marketing strategies. You can use this information to build a better business strategy for your own business—and outperform your competitors.
You can use your findings from competitor analysis to guide your business plan, then keep track of your business goals and finances using accounting software like QuickBooks.
Why should you conduct a competitor analysis?
Conducting a competitor analysis offers the following benefits for small businesses:
Keep up with industry trends and ensure your business is meeting industry standards
Identify opportunities to outperform your competitors by understanding their strategies
Uncover market segments where your competitors are falling short and where you can step in to serve the target audience better
Identify the target audience’s pain points, so you can plan and improve your products accordingly
Find out where your competitor’s products have failed and avoid making the same mistakes yourself
Improve your ads and help your content rank higher by using competitive data to inform your search campaigns
How to run a competitor analysis
Running a competitor analysis is not as complicated as it sounds. Here’s how you can go about it in 10 simple steps, and what to include:
1. Identify your competitors
How do you find competitors of your business? Start by building a rough list. You’re probably aware of your local competitors, but it’s always a good idea to dig a little deeper. Search on Google, or use websites like SEMrush or SimilarWeb. See which competitors come up when you search for keywords related to your products and services. Storing this data in spreadsheets makes it easier for you to organise and analyze later.
Categorise your competitors as primary, secondary, or tertiary competitors:
Your primary competitors are your business’s direct competitors. They have similar products or services and share the same target market. These competitors will be the reference brands for your audience when they think about your business.
Your secondary competitors are your indirect competitors. These are the companies that sell similar products and services but to a different target audience.
Your tertiary competitors share the same target audience as your business, but they don’t offer the same products or services. These businesses don’t directly compete with your brand, but they may become future competitors if they decide to expand or change their business. It’s a good idea to check in on these tertiary competitors every once in a while. Tertiary competitors could also become potential partners in the future.
2. Examine their websites and customer experience
Now that you’ve gathered a list of your competitors, you can begin building and analysing their competitive profiles. Start by looking at their business website. How is it designed? How does it perform? Can you do some competitor benchmarking? And how does it compare to your own?
If their site is easier to navigate, contains more relevant content, or has higher customer engagement, you might consider making similar updates to your own website.
3. Identify their market positioning
Do market research as part of competitor analysis. Look at how your competitors position themselves in the market and what their core messaging is. What words do they use to describe their brand and their products or services? What do they consider to be their unique selling points (USPs)? Ask yourself what you can take inspiration from, and where you could differentiate your own business.
4. Review their pricing
An excellent way to determine whether your pricing strategy is right for your target audience is to check out the pricing policies of your competition. Find out how much they charge for products or services similar to yours.
Once you have the pricing info, you can review your own pricing to determine how they compare. If you find your prices are much higher than your competitors, you can lower your pricing, or update your messaging to show why your products are worth the premium.
5. Read their reviews
Customer reviews are a window into how your target audience feels about your competitors. Keeping an eye on customer reviews can help you rank your competitors according to how strong they are. Reviews can also help you in deciding which USPs to develop or highlight in your marketing communication.
For example, if the reviews of your competitors mention that they lack a certain feature, you can promote that feature in your campaigns and messaging to convince customers to switch. Remember to look at word-of-mouth referrals too, as they are so valuable.
6. Review their social media content
While conducting your competitive analysis, make sure to review your competitors’ social media activity. Identify the posts and content that their followers engage with most and take inspiration from it. Look at our guide for Facebook marketing for more ideas.
Determine how frequently they post and which posts earn the most likes or comments, and identify the influencers they work with. On the flip side, identify the content that provokes negative reactions from their followers so you can avoid making the same mistakes on your platform.
7. See which platforms they use
Another way to gather insight into your competition is by looking at the social media channels they use and on which platforms they have the most followers and engagement. This could be an indication of where your shared target audience is most active. If your competition is crushing it on Twitter, it’s a good sign that your target audience lives on that platform.
8. Learn what technology stack your competitors use
Learn about the marketing technology and tools your competition is using, and think about how you could use those tools to grow your own business. Using tech stack tools like BuiltWith, you can find out what tools other businesses use to build their websites and content.
9. Observe what content they produce
Learning about your competitors’ content can help you to improve your own. You might even identify some opportunities that you’ve been missing.
Study your competitors’ blog posts, download their whitepapers, read their case studies, and subscribe to their newsletters. Learn about their multimedia marketing by analysing their videos, podcasts, and webinars, if they create them. Their paid ads and marketing images can tell you how they’re promoting their content—and how their audience is responding to it.
10. Read news about your competitors
Find out how your competitors are mentioned in the news by monitoring the newspapers or doing a Google News search. Seeing how competitors are mentioned in the news can give you an insight into their PR strategy as well as any actions that they’re celebrated - or judged - for by public opinion.
What to do after the competitive analysis is done
Now that you’ve done your competitor analysis, what do you do with all the data you gathered? The answer: use that information to identify new, effective marketing strategies for your brand. Here’s how:
Perform a SWOT analysis
A SWOT analysis gives useful insights into your competitor’s Strengths, Weaknesses, Opportunities, and Threats. Once you’ve completed a SWOT analysis of your competitors, pull your team together and do a SWOT for your own business.
The SWOT analysis elaborates on the internal and external factors that affect a company’s performance. The internal factors are strengths and weaknesses, the external factors are the opportunities and threats that a business might face. By identifying these factors, you can anticipate the future performance of your and your competitors’ brands.
Update your products and services as needed
When you’ve finished analysing the competition, it’s time to get out there and apply what you’ve learned. Design a strategic plan for optimising your products and services. If you’ve identified your competitors’ weaknesses, work towards improving your own products and services in those areas, or launch something new.
You may want to look at these elements of competitive product analysis:
Assessing the pricing of competitor products
Checking their key product features against your own
Defining product USPs and what sets you apart
Looking for gaps in the market you could fill
Review your pricing model
Once you’ve analysed your competitors’ pricing models and know how well they’re received, it’s time to review your own pricing policy. Look at where you stand on the quality vs. quantity spectrum and decide whether you need to change your prices to be more attractive to potential customers. Make sure your value proposition is clear. If your customers are getting better quality and lower prices from your competition, it makes sense that they would choose them over you, so choose your pricing strategy wisely.
Update your marketing strategy
Once you’ve looked at your competition’s marketing strategies and know which tactics are well received by their audience, review your own marketing strategy for gaps. Are there any popular channels that you’re missing out on? Are there any popular topics that you could create content around? Could you experiment with some new marketing or advertising methods?
Are there any drawbacks to competitive analysis?
After doing your competitor analysis, ensure you actually take action from the data – it’s important to do it as part of your business plan, as you’ll likely need to make changes. Competitor analysis can feel like opening a can of worms. And you’ll have to keep updating your findings as the market changes and competitors introduce new products and marketing strategies. However, the effort is worth it to stay ahead of the competition. When conducting your research, be wary of your own biases. Collect enough data to get an accurate picture of the market and where you stand, not just what you want to see.
Competitor analysis tools to use
There are countless tools that could help you to run a competitor analysis. Eventually, they can help you design a successful strategy for your business. We’ve compiled some of the most popular tools out there—choose the ones that work best for your business.
Technology stack
Knowing which technology your competitors are using can help you determine if your tech stack needs improvement. Here are the two most popular tools for analysing tech stacks.
BuiltWith. BuiltWith is a tool that lets you find out what your competition’s website is built with.
Wappalyzer. Wappalyzer is a technology profiler that shows you what tools a website is built with.
Content and keyword tools
The following tools can give you information about your competitors’ content and the keywords that they rank for:
SEMrush. SEMrush is an SEO and search analytics tool that’s used all over the world. It lets you look at your competition’s most valuable keywords, conduct competitor benchmarking, and optimise your own content.
Ahrefs. Ahrefs is a competitor analysis tool specialising in gathering data. It lets you compare your own website with your competitors’ websites on ranking keywords, backlinks, SEO health and more.
Frase. Frase is a content optimisation tool that helps you write keyword-optimised content. With Frase, you can create automated content briefs and manage your content creation process.
Social media comparison tools
Lots of social media platforms offer analytics that can give you an insight not only into your own channels’ performance, but also those of your competitors.
Buzzsumo. Buzzsumo helps you identify which of your competitors’ on-site content is most popular on social channels.
Facebook Audience Insights. Facebook Audience Insights gives you data and information about the audiences related to your niche. You can also get information about your competitors’ audiences.
LinkedIn. LinkedIn provides full transparency of which adverts your competitors are running on LinkedIn. Also look at your competitors’ organic posts and which ones generate the most engagement.
Instagram. Instagram is one of the largest social networks with a heavily engaged audience. You can view your competitors’ profiles to see what kind of content they post and which influencers they work with.
Twitter. On Twitter, you can determine the popularity of your competition by looking at their followers and engagement metrics on Twitter.
TikTok. TikTok is becoming increasingly popular, especially among young audiences. You can determine your competition’s outreach by looking at their followers and content engagement on TikTok.
Bring it all together
Competitor analysis helps you identify your competitors’ strengths and weaknesses, providing you with useful insights for devising your own marketing strategy. Regularly reviewing your competitors’ activity can help you keep up with the latest trends and tactics, identify new opportunities, and prepare for potential threats.
The idea behind competitive strategy analysis isn’t to steal your competitor’s identity but to learn from them and devise a more strategic business plan for your brand. The ultimate winning strategy for any business is to focus on your customers. The competitive analysis gives you insight into better ways to do this.
Using accounting software like QuickBooks also can help you focus on the goals defined in your business plan. We also allow you to see your own finances, compared to similar-sized businesses.
We hope you’ve found this article about how to do a competitor analysis useful. If you’d like to find more ways to grow your own business, try out our latest questionnaire. It will give you a personalised to do list for which steps to take next on the road to business growth.
The information on this website is provided free of charge and is intended to be helpful to a wide range of businesses. Because of its general nature the information cannot be taken as comprehensive and they do not constitute and should never be used as a substitute for legal, accounting, tax or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date. Any reliance you place on information found on this site or linked to on other websites will be at your own risk.
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