Competitive market analyses give you perspective on the current business landscape. They help you identify and capitalize on your competitor’s weaknesses, improve your communication, and establish gaps in the marketplace. With that information you can outmaneuver your competitors and position yourself as an industry leader to your customers.
Here are 6 things to keep in mind when you are performing your own competitive analysis.
Hire the right people for the job
When creating an internal team to conduct your competitive market analysis, identify candidates that have strong writing skills, advanced research skills, and are analytical thinkers. Candidates should also be familiar with the current industry landscape and should have an idea of who the direct and indirect competitors are.
You may consider hiring a consultant or outside marketing firm to do your competitive market analysis. The benefit of this is to have an objective, non-biased third party to evaluate your competitors, but also see how your company fits in the marketplace. Outside firms may also have extra resources and experience in conducting customer focus groups or mobilizing secret shoppers. Research-based firms will have experience tracking down your competitors’ sales volumes, annual reports, and past marketing strategies.
Don’t just look at your biggest competitors
It’s common to focus the majority of your resources on your “head-to-head” competitors. These competitors sell very similar products and tend to have similar customers to you. However, also consider your first and second-tier competitors. First-tier competitors sell similar products to you but don’t have the wide selection of products that you have. Second-tier competitors sell substitute products to yours and are considered indirect competitors. Companies trying to shake up the industry will often start as second tier competitors and eventually cut into your market share.
Get a mix of qualitative and quantitative information
Business executives rely heavily on data to support their decision-making process. However, true analysis of a competitive landscape requires the context that qualitative information provides.
For example, one area you should focus on in your competitive market analysis is customer reviews. Quantitatively, you can look at the ratings on Google Reviews or Yelp to establish a numerical value for the customer experience. Qualitatively, you can put the ratings into context by categorizing the reasons customers gave for those ratings. From there you can differentiate a low rating from a poor customer service experience and a low rating due to product deficiencies.
Observe the selling process in person
When possible, conduct in-person evaluations of retail locations or customer service experiences. This can be done through store visits or with secret shopper experiences. Have your team members or secret shoppers evaluate each in-store experience on the following criteria: 1) The overall cleanliness and design of the facility, 2) How quickly they were greeted and helped by sales personnel, 3) How knowledgeable and experienced the sales personnel were, and 4) The overall customer experience and likelihood to visit the store again.
By performing in-person inventories you can identify key attributes in the selling process and see how the in-person experience differs from the online experience. You can also identify if certain promotions or sales tactics are only used in stores, rather than online.
Perform market analysis audits regularly
A competitive market analysis is not a one-time-only audit. It should be completed whenever you are adjusting your marketing plan, launching a new product, or looking to change your existing target markets. At the very least, you should perform a new audit once a year. Additionally, you should stay informed about new competitors and add them into your existing analysis when they bring their products to market.
Share the analysis widely within your company
It will be tempting to only share the finished competitive market analysis with your executive board. However, by communicating the analysis to your company broadly, you can align various departments under a common framework. For instance, sales teams, marketing teams, and customer service teams will be able to look at the competitive market analysis and apply their knowledge base to adapt to the changing landscape. These departments can then work better together because they have a common unifying set of insights to work from.
By following these six tips, you can get the most out of your competitive market analysis. Once you have a better idea of where you stand in your business landscape, you will be able to be proactive as opposed to reactive in your business decisions. This will allow you to compete more effectively and capitalize on your competitors’ weaknesses.
About Weber Associates
Weber Associates is a Columbus, OH-based consulting firm. Since 1985, we have blended the creativity of a marketing agency with the analytical rigor of a consultancy to help our clients solve real sales and marketing challenges so they can significantly grow revenues and customer loyalty.