Marketing Basics: Competitor Analysis
In part 2 of my Marketing Basics series, I want to talk about getting the most out of your competitor analysis (by the way, make sure you read part one of this series about defining your target audience.) When I’m getting ready to write copy for a new client, I always ask them about their competition. See, it’s important that you know your enemy better than they know themselves. It’s the only way you can properly position yourself in your industry.
Here are some questions you should answer when performing competitor analysis.
1. Who are my main competitors? This should be a fairly simple question to answer. All you have to do is figure out which companies are taking up the piece of market share that you want. If you only provide local services, identify the main competition in your area. Be realistic. Don’t think that some “small fry” isn’t really a competitor. Make sure you leave no stone unturned when identifying your competition.
2. What are their strengths and weaknesses? Again, be realistic when answering this question. Recognize what your competition does really well. Also, dig around and figure out where they come up short. Maybe they don’t provide the level of customer service you can provide. Perhaps they don’t have the capabilities to take on large clients. Remember, any weakness of the competition presents an opportunity for you to capitalize on it. I also recommend examining the online presence of your competition. Find weaknesses in their SEO, social media marketing, link building, and other areas, and do your best to take advantage of it.
3. What do I offer that they don’t? This goes back to the question above; it’s called finding your competitive edge. It could be as simple as finding a service you offer that the competition doesn’t. Or it might be that you provide a price that they can’t match. The point is this: find something of value you can provide to your consumers that you your competition can’t. Once you identify your competitive edge, drive it home in your website copy, advertisements, taglines, and anywhere else your brand name comes up.
4. Are there potential customers that my competition is overlooking? When starting a new business, your first instinct might be just to pattern it after one of your competitors. This means going after the same customers as your competition. While that might end up being your only option, take some time to see if there are any customers your competition is missing out on. For example, look at Nintendo. Their video game system, the Wii, is aimed at the customers the Sony PS3 and Microsoft XBOX 360 are ignoring. By creating a video game system that focused on being user-friendly (meaning anyone—even my mom—can pick it up and play it) instead of designed to attract hardcore gamers, the Wii has consistently outsold the competition.
5. How does my pricing compare with others? Now, this isn’t to say that you should always focus on offering the cheapest products or services out there, but the fact is you can’t just ignore the pricing structure of your competition. There’s nothing wrong with being more expensive than your competitors, but just make sure you provide something of value that justifies the extra cost to your consumers. If your target audience can’t understand why they should pay more for your services, they’ll just buy from the competition instead.
When’s the last time you performed a competitor analysis for your business? Would you add any questions to this list?