Launching a company, product or service without doing a market study is crazy. It's like jumping into a pool without knowing if it has water. It used to be difficult to analyze the competition, but today you can do it almost without moving from a chair or your sofa if you use a laptop.
You just need to know the right tools to do that competitive analysis. And in this article, we’re going to tell you which ones are the best. Are you ready?
Who are your competitors?
Your competitors are those that operate in the same market or sector where you plan to implement your business idea, and you must identify them by their names. When we talk about competitor analysis in business, we can establish two degrees according to how they affect your business area:
- Direct competition: those businesses that target the same market. That is, they sell the same product or service and target the same customers.
- Indirect competition: these are companies that operate in the same market, address the same customers, but offer a substitute or alternative service or product. If your business idea is a coffee shop, your direct competition is all the coffee producers, and the indirect competition is the producers of substitute hot drinks such as tea.
When was the last time you did a competitive analysis for your brand?
For some companies, competitor analysis tools boil down to looking at their competition's profiles on social media on a daily basis and many marketers don’t take full advantage of competitive audits due to lack of time or information. However, knowing what other companies are doing to position your product and brand story is crucial for your content to attract your ideal consumer.
In addition, conducting competitor analysis plans and making a comparison will make it easier for you to take advantage of your competitive advantages in the best way. Consequently, you’ll know in which aspects or areas your product, service or company excels, and this can lead you to win a part of the market that may not be so satisfied with a competitor. So, focus on your advantages to enhance them and your ideal clients will recognize them and choose your brand over others.
Why is it important to conduct a competitor analysis?
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There are numerous benefits that you can obtain when carrying out a competitor analysis in business. An example of the advantages that this process brings to you is that it allows you to:
- Know the commercial strategies of other companies to make decisions that anticipate their plans and campaigns.
- Find needs in the market. This way you can develop new products or services with a high demand projection.
- Understand better all the customers in the market (both yours and your competitors' customers). By doing so, you can personalize your products/services to the maximum.
- Discover methods and ways to optimize your processes to achieve and exceed the agility, productivity and performance of leading companies.
- Design tactics that are more creative and effective than those of your competitors in terms of your advertising and marketing campaigns.
- Offer pleasantly different experiences to your consumers during the purchasing and customer service processes.
- Make more intelligent and accurate investments in terms of technologies, professional profiles, advertising media, content formats, distribution channels, among others.
How to do a competitor analysis?
The following steps are essential when you are about to analyze your competition:
1. Identify your main competitors
Before getting down to business with the analysis, your priority is to know which brands work for the same sector of the market that you’re targeting.
Because the market is so large, you can’t identify all the brands or products that are in competition with what you sell, but you can make a list of the main competitors. You can use certain criteria such as the interaction and distribution channels, the geographical area in which they are active, the coincidences between the business images (such as logos, colors or concepts) and the values that each brand represents, among other aspects.
If you don't know how to identify the companies that are your most direct competition, you can help yourself by using a search engine such as Google and see which companies appear when you use certain keywords that identify your business.
2. Compare the content of your competition
Once you have a list of the companies that seem to be your main and most direct competition, analyze their content to verify that they are indeed the brands or companies most similar to yours. Make a list of about 15 or 20 companies, which is enough for you to progressively delimit which ones are the most relevant.
When you start the content analysis, you’ll realize how true it is that these companies aim at the same type of customers as your company and how similar they are concerning other elements, such as the vision or values that drive them to be part of the market.
We recommend that you don't get rid of the names of the companies that you discarded. In the future, they can become a reference for a renewal of your business or become your new competition. In addition, these companies are part of your indirect competition.
Also, detecting strengths and weaknesses, both yours and those of your business competitors, allows you to execute strategic actions to evolve and make quite important competitive differentiation. By knowing your weaknesses, you can make decisions to address and improve them, preventing your competitors from taking advantage of them.
3. Analyze the data with specialized tools to audit competitiveness
Once you carry out a first evaluation of the content, you can do a second round with a specific tool, such as their software or online platforms and services.
This will help you identify more specific and technical elements, such as the scope they currently have with their content, the interaction they have with their readers (in the case of blogs) or viewers, as well as the reputation they have on social networks, the number followers, the frequency of their publications and other elements that will help you calculate their success and market penetration. Some competitors analysis tools are:
Klear. It is perfect for analyzing various social networks such as Facebook or Instagram and is available in more than 20 languages.
Hootsuite. This is an ace of tracking and analysis of social networks. Even if it helps to analyze your metrics, it doesn't mean you can't get information from the competition. You just have to place their data and it will also help you monitor specific hashtags or keywords.
Social Buzz informs you about real-time searches in networks such as Twitter, Google+, Facebook and LinkedIn. Once you enter your competitor's name, it will offer you information about their social relevance.
Alexa: Here you will find the famous world ranking of websites and some other data. Alexa is a software made up of a set of tools that allow you to know the traffic of your website, the topics that are trends in Internet searches, search the keywords of the moment, how is the performance of the website, etc. With Alexa, you can get a statistical analysis of important SEO metrics to achieve a better web positioning in Google.
Ahrefs: It will help you increase your search traffic, investigate competitors and monitor your niche with data on backlinks, referral domains, anchor texts, referral IPs, organic traffic, keywords, websites and competitors' domains.
Moz: Moz works for web analysis, SEO and keyword tools, which will also help you analyze those of your competitors.
SEMrush: Follow, monitor and analyze your competitors in an automated way and in real-time extracting data of web traffic, SEM, Display ads, SEO, social networks, brand reputation.
Once you have performed your competitor analysis with these tools, highlight the most prominent interactions, both positive and negative. Having them identified will help you better understand what your competition's qualities are, as well as their areas of opportunity. That will give you clarity about where you can take advantage.
4. Study your SEO strategy
In this digital age, online strategies in terms of marketing and sales take on greater importance than offline ones. For this reason, brands are becoming more and more present in the Internet ecosystem. This way, by analyzing your competitors' online presence you can:
- Understand how they are investing in paid campaigns (such as Google Ads and social media ads).
- Find out what their organic positioning tactics are (such as content themes, keywords or strategic alliances for link building).
- Find out what formats are working best for their audiences (such as photographs, short or long videos, articles, eBooks, and so on).
- Know the digital technologies they are using (such as payment gateways -if it is e-commerce-, smart chatbots, mobile applications, among others).
- Understand which channels are having better receptivity (such as which specific social networks, messaging applications, streaming platforms, etc.).
And especially, study the SEO strategy of your competitors. This is decisive when it comes to evaluating and comparing your place within the search engine ranking. This, without a doubt, is also important when defining the number of clients that each company attracts and retains.
Identifying your keywords is fundamental. If you notice that there is a group of keywords in which your competitors stand out and you consider that these topics aren’t the specialty of your company, you can always create content for the same line of business.
5. Compare your competitive advantages and generate a strategy
Consider making a global comparison of all the data you collected from the companies that are your competition and identify in which aspects your business or brand exceeds them.
This step is one that will define the type of strategy that you’ll use to improve performance and reinforce the distinctive elements of your brand or business, either because you have a better quality in an area or because you know that you have the necessary elements to stand out.
For example, if a brand that is your competition doesn't have good reviews regarding its customer service (neither on its social networks, on its website or in Google reviews) you can focus on generating a competitive advantage by offering exceptional customer service.
So, while maintaining the quality of your product or service, you’ll have good control of your online reputation. By doing this, you will gradually improve your position in the market, because customers will start giving positive reviews about your company, either online or in person.
Performing an effective and continuous analysis will differentiate your brand and allow it to obtain better performance. Try these tactics and make them stand out!
Actions speak louder than words
In the world of business and entrepreneurship, the worst thing is to stay still. As Albert Einstein said: "Life is like riding a bicycle. To keep your balance you have to keep moving".
And that's where the importance of analyzing the competition lies, in discovering new business niches, new services and products that no one had offered before. The analysis of the competition is the way to put your ideas in front of the mirror and see their defects and weaknesses, as well as their strengths and opportunities.
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