Can you recall, when was the last time you ran a competitive analysis for your business? And most notably, do you understand how to do one effectively? Suppose the previous “analysis” you ran was a quick perusal of a rival’s website and social media presence. In that case, you’re most likely losing out on essential intelligence that might help your business grow and increase the risk of failure of your business. Competitive analysis can help you learn the ins and outs of how your competition works, allows you to avoid mistakes made by your competitors, and determine possible opportunities where you can out-perform them. It also enables you to stay top of the market and ensure your product consistently fits market standards. Let’s dive into a couple of more advantages of conducting competitive analysis.
It helps you identify your product’s unique value proposition and what makes your product different from rivals, which can notify future marketing efforts:
- Allows you to determine what your rival is doing right. This detail is vital for staying pertinent and ensuring your product and marketing campaigns surpass industry standards.
- It tells you where your rivals are failing, which helps you identify opportunities in the market and test out new, unique marketing methods they haven’t benefited from.
- Learn through consumer evaluation of what’s missing in a competitor’s product, and consider how you might add features to your product to fulfill those needs.
- Supplies you with a benchmark against which you can measure your business growth.
Convinced, yet? Next, let’s dive into how you can carry out a competitive analysis for your own company and avoid mistakes made by your competitors.
What actions should I follow?
There are several steps that you should follow to get all the necessary information about your competitors.
Identify your competitors
Who are your competitors? You might be able to call one and even two of them off the top of your head. However, there are most likely other companies that don’t appear like threats now, but with a couple of adjustments could chip away at your customer base. Make a list of all of the companies providing similar products and services or targeting similar markets. If this is your first time doing rival analysis, narrow the list to the 4-5 companies that provide the most significant hazards to your business. How to do that?
- Divide your “competitors” into 2 categories: direct and indirect.
- Direct competitors are businesses that offer a product and services that could pass as a comparable alternative to yours.
- On the flip side, an indirect competitor provides products that are not the same but could please the same client’s need or resolve the same problems. It appears easy enough on paper, but these two terms are frequently misused.
- When comparing your product, you must just concentrate on your direct competitors. This is something many brand businesses get wrong.
Keep these businesses on your radar, considering that they could shift positions at any time and change over into the direct competitor zone. This is also one of the reasons why you’ll want to run a competitor analysis regularly. The market can and will shift at any time, and if you’re not continuously scoping it out, you won’t know these changes till it’s too late.
As you go on, you might also select to go into the marketing strategies of businesses that aren’t your direct competitors, like similar organizations throughout the country. Although your consumer base may not overlap, their methods might provide some great concepts.
Identify what your competitors offer
Any company has an outstanding product worthy of attention. You’ll want to analyze your competitor’s product and the quality of the service or products they’re providing. You should also take note of their pricing and any discount they’re offering to the clients. Some concerns to think about include:
- Are they a low-cost or high-cost business?
- Are they working generally on volume sales or one-o purchases?
- What is their market share?
- What are the attributes and requirements of their perfect customers?
- How does the business highlight itself from its competitors?
- How do they distribute their product or service?
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Study your competitor’s sales tactics and result
Running a sales analysis of your competitors can be a bit difficult. You’ll wish to find the answers to questions such as:
- What does the sales procedure look like?
- What channels are they selling through?
- Are they scaling up or down?
- Do they have partner reselling programs?
- What are their consumer’s factors for not buying?
- What are their incomes each year? What about total sales volume?
- Do they regularly discount their service or products?
These helpful pieces of info will provide you an idea of how competitive the sales process is and what information you need to prepare your sales representatives with to compete during the last buy stage. For publicly held businesses, you can find online annual reports, but you’ll have to do more deep investigations to find this info from privately-owned companies. You could find a few of this information by searching through your CRM and connecting to those customers who mentioned they were considering your rival. Find out what made them pick your services or product over others out there.
To do this, run a report that reveals all prospective deals where there was a determined competitor. If this information is not something you presently record, talk to marketing and sales to execute a system where potential customers are questioned about the competitors they are considering. Essentially, they’ll need to ask their leads (either through a kind field or during a one-on-one sales discussion) to recognize who their present company is, whom they’ve used in the past, and who else they are considering during the purchasing process.
Once a competitor is identified, have your sales team dive much deeper by asking why they are considering switching to your product. If you have already lost the deal, make sure to understand why you lost to your competitor. What services or features attracted more customer attention? Was it about price? Or because of your sales process? If they’ve already made the switch, learn why they made this decision. By asking open-ended questions, you’ll have truthful feedback about what clients find appealing about your product and what might be turning clients away. As soon as you have addressed these concerns, you can begin scoping out your rival’s marketing efforts.
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Take a look at your competitor’s pricing, as well as any sales promotions they offer
Several significant aspects go into correctly pricing your product – and one significant one understands how much your competitors are charging for a comparable product or service. If you feel your product offers superior features to competitors’ products, you might think about making your product or service more pricey. Nevertheless, if you do that, you should ensure your sales reps are ready to explain why your product is worth the additional expense.
Additionally, maybe you feel there’s a gap in your industry for affordable products. If that’s the case, you might intend to charge less than rivals’ and appeal to potential customers who aren’t looking to break the bank for a high-quality product. Obviously, other elements go into correctly pricing a product, but it’s critical you remain on top of the market to ensure you’re pricing your item in a way that feels affordable to the customers.
Furthermore, take a look at any benefits your competitors offer and how you might match those promotions to complete. For instance, possibly competitors provide a significant recommendation discount or a month-long free trial variation. These perks could be the factor you’re losing clients, so if it feels sensible for your business, consider where you may match those advantages – or offer some unique benefits of your own if rivals’ do not provide any.
Compare one competitor to another
You wish to compare each competitor to your business, however, it also helps compare them. After all, this business might be vying for your clients, but that does not suggest they run the same way. As soon as you have collected all the information you can about these companies, compose detailed profiles that allow you to see how they run the business and how significant a threat they may be.
The easiest method to do this is with a side-by-side comparison. Include the products and services they offer, business categories, locations, target audiences, distribution channels, unique capabilities, and anything else that would make one product stand apart from the rest. Save one space to compose a profile of your own company. This will help you with the following action.
Identify your unique position
Despite all the apparent resemblances between you and your rivals, there must be enough difference between each business that there’s a unique market position for everyone. What will yours be? Thanks to competitive analysis, you have a much better idea of what your competitors provide. Now it’s time to find out where you stand in relation to them. Using your profiles and SWOT analysis, identify what you do that others don’t, or perhaps what they don’t do as well. This could be a unique product or an extensive series of products. Whatever it is, make sure it’s a clear assessment based on your rivals’ research and analysis.
Perform a SWOT Analysis to learn your competitor’s strengths, weaknesses, opportunities, and threats
Customers are continuously looking for new places to get what they want. Even if they’re loyal to your business, they’re still looking at it in the context of other businesses. Online competitor analysis permits you to view your business as consumers may see it, revealing its strengths and weaknesses in addition to the future opportunities and threats to its presence. These are precisely the details you’ll require to perform your SWOT analysis. Using the profiles of your business and its competitors, recognize the following:
- Strengths: What does your business do well? What do you provide that the competition doesn’t?
- Weaknesses: Are there areas where rivals perform better than your company?
- Opportunities: Are there any new trends or changes in competing businesses that could benefit your company over the long term?
- Threats: Which trends or competitive activities could trigger a disruption in your business?
This analysis will identify areas you might need to improve, in addition to places that you can use in future marketing and branding efforts.
Once you’re done, use your SWOT analysis as input for developing or further refining your Product Development Strategy. It should help you focus on priority goals and initiatives. If you need some guidance with this process, then JetRuby has something for you. As we’ve been on the digital market for more than 10 years with lots of startups, we felt their anxiety and doubts during the initial launch stage. For that reason, we have developed a technological flow that can potentially cast all of your worries away, and it starts from the Product Development Strategy Session. It is a free business consultation where your team and ours will create a general plan covering the future product cycle and an action plan with high-level features for your first steps. Got interested already? Leave your short project description, and we’ll be in contact with you within 24 hours.
Learn what technology stack your competitors’ use
Understanding what types of technology your competitors’ use can be critical for assisting your own business to reduce friction and increase momentum within your company. For instance, possibly you’ve seen positive reviews about a competitor’s customer care – as you’re conducting a research study, you find out the customer uses effective customer service software you haven’t been benefiting from. These details should provide you with the opportunity to outperform your competitors’ processes. Alternatively, you may think about taking a look at rivals’ job listings, particularly for engineers or web developers. The job listing will likely point out which tools a candidate requires to be familiar with – a creative way to discover the innovation your competitors’ usage.
How do you stack up against your competitors?
No marketing strategy can exist in a bubble. You need to understand what your rivals are doing so you can develop a plan that makes you stand out. The Internet has made this info much easier to discover, however it can still be difficult if you’re new to competitive analysis, specifically if you are a newbie entrepreneur who is still finding his method around your first startup while selecting a technological partner who might potentially raise higher than your competitors.
Now that you’ve analyzed your competitor’s behavior and what’s going on in the market, you should have a good sense of the best course of action for your business to require to make money from your competitor’s activities. When your competitor deals with a failure, it’s essential to keep in mind that this isn’t an automatic win for your business but a unique chance to learn from your competitor’s mistakes without suffering the same consequences. By seizing the opportunity, comprehending your competitors, listening to the marketplace, and taking the best strategy, you can be strategic and quickly make money from your rival’s failures.
If you’d like to get an in-depth look at what others in your industry are doing and use that information to improve your strategy, Jetruby can help! Contact us today to speak with a strategist about how our Internet marketing team can use competitor research to help your business grow. As we’ve been on the digital market for more than 10 years with lots of startups, we felt their anxiety and doubts during the development cycle. For that reason, we have developed a technological flow that can potentially cast all of your worries away, and it starts from the Product Development Strategy Session. It is a free business consultation where your team and ours will create a general plan covering the future product cycle and an action plan with high-level features for your first steps. Got interested already? Leave your short project description, and we’ll be in contact with you within 24 hours.