Everyone wants to get an edge on their competitors, but we don't need to tell you that. The core principle for how to beat your competitors is almost zen-like: understand them. Knowing their motivations, strengths, and failures, is a huge part of finding what you can do better than they do and where your business can really shine. In this post, we'll give you six steps for understanding your competitors in a way that means staking out your corner of the market.
1. Understand Their Motivations
Try to understand the market through your competitor's point of view and determine what they're trying to achieve. Are they targeting new trends in the industry? Are they attempting to capture new clients or attain a greater market share? Are they focusing on new marketing techniques?
This is an important first step because it's going to influence the way you interpret the information you gather in the rest of our steps. It also helps you understand where you compete directly within your industry, as well as shed light on areas that could be a unique selling point (USP) for your business.
2. A SWOT Analysis for Strengths and Weaknesses
SWOT stands for strengths, weaknesses, opportunities, threats. SWOT analysis is a straightforward method for creating a solid and visual understanding of all the factors that affect strategic decision making, wherein S/W are internal, and O/T are external. By looking at your greatest threats, and your worst weaknesses, you'll determine where your company's biggest issues are.
But it's important to see the factors in a formalized way, especially with regards to your competition. This is a direct outgrowth of understanding their motivations, because while many businesses use this approach for risk management in the proposal process of new campaigns, you should create one for competitors. Regularly analyzing your competition using SWOT in conjunction with a self-analyzed SWOT for your business allows you to better determine where you'll be strongest, to hit your competitors where they're weakest, and vice versa.
3. Compare Against Their Marketing Bridge
The marketing bridge illustrates the five major factors of completing a sale: your business positioning, price/value, advertising, merchandising, and personal selling. These factors further break down into important points such as location, competitive pricing, and customer service. Like the SWOT analysis, you should develop an understanding of your competitor's marketing bridge — this could include analyzing competitor’s locations or their price/value, etc… — and compare it to your own, point for point. Secret shopping a competitor can also provide very valuable information. This will give you an entirely different understanding of where you're excelling, where you need to improve, and what areas you can take advantage of because your competition isn't.
By using this step in conjunction with the results of your SWOT analysis, you'll be able to clearly identify a USP that may not have been so easy to pin down before. A USP will, more than most things, solidify your place in the market by meeting needs your competition hasn't begun to address.
4. Comprehend Their Advertising Failures
One of the earliest things we're taught in life is to learn from the mistakes of others, and that's no less true in business, especially in advertising. Identifying your competition's failures in general is useful, but if you key into their advertising failures during your competitive analysis, you can use this as a reference when developing your own marketing efforts. If they engaged in a marketing campaign that backfired, don't assume you'll just do a better job of doing the same thing — identify why they failed and improve your marketing. That may mean doing a similar thing differently, or it may mean avoiding what they did altogether.
5. Analyze Their Online and Digital Marketing Presence
Aside from their brick-and-mortar and in-person tactics, you need to pay attention to your competition's online presence. It's an undeniable fact that you need to have a website and social media presence to thrive, even if your business doesn't utilize any kind of e-commerce, analyzing what competitors have done well — or poorly — is imperative. As with SWOT and the marketing bridge, you need to compare your presence to theirs. Here's a few of the things you should consider:
- Site design aesthetic
- Site functionality and ease of use
- Content (e.g., videos, pictures, outbound links for social media)
- Load times
- Mobile optimization
- Local search optimization
- Brand app
- Site/app features, especially new rollouts (e.g., e-commerce, pickup in-store, setting appointments)
Another key factor that needs to be discussed is keywords. If you can determine which keywords your competition is winning, that will give you an idea of how to design your own keyword strategy. Which keywords are worth competing over, and which are so over-used they're not worth utilizing? Remember to utilize long-tail keywords as well.
6. Monitor Their Social Media for Ongoing Analysis
While we firmly recommend you regularly run SWOT and market bridge audits on yourself and your competition, you can't be running them constantly. The easiest way to keep tabs on what your competition is up to is by using what customers are already using — your competition's social media. Assuming they're using their social media even moderately well, this will give you insights into any moderate to major changes they're making, their latest promotions, etc.
Another benefit of keeping tabs on your competitor's social media is catching the moments that your competition misses. An unanswered question or an unaddressed issue could be a prime opportunity for your business to step in and capture the discussion, presenting yourself as an excellent alternative.
Understanding your competitors is important when you're developing your business plan, but that's not where it stops being important. Your analysis should offer insights that give you a clear direction for actionable steps, and it's the key for unlocking how to beat your competitors and establish your position as a leader in your industry.