How to perform an effective competitor analysis

Jan 13, 2017 by
How to perform an effective competitor analysis

If you’re thinking of entering a new niche and creating a sustainable business for the long-term, it’s essential that you conduct a thorough competitor analysis.

In fact, competitor analyses should be performed by established businesses too, as there are always improvements to be made. The more you learn about your competition, the more you can capitalise on their weaknesses and accentuate your strengths. Quite simply, competitor analysis is an essential exercise if you value long-term profitability.

1 – Pay for products and services

There is only so much you can learn by checking out landing pages and website copy. If you really want key insights into competing businesses, it’s ideal if you can become a customer. If you’re selling physical products, this is usually inexpensive, but purchasing online services can be worth the cost too.

Other than getting a thorough understanding of the product or service, you will pick up additional information such as what kind of upsells they use, what their packaging is like, how good their customer service is, how long they take to deliver and more. This will give you inspiration to make your businesses and services better, particularly in the areas in which your competitors are weak!

2 – Check out their sites

A company’s site is the portal where their customers interact with their brand, so this warrants careful examination. Check out how good their navigability is, what menu options they have, what types of incentives they’re using for opt-ins, how their blog is formatted, and so on. After going through a handful of competing sites with an analytical view, you’re sure to find things that you can improve upon.

Additionally, it’s worth entering all of your competitors into Similar Web. This innovative tool provides you with key information about competitors, such as how much traffic they’re receiving and what their average bounce rate it. You may wish to create a spreadsheet and start logging these vital statistics.

Social media3 – Examine their social media accounts

Another thing to log in your spreadsheet is how many followers your competitors have. Record the amount of fans each competitor has on each social media platform (Instagram, Facebook & Twitter primarily) and then log the total amount. If you cross reference this information with the bounce rate and traffic statistics from Similar Web, you’ve probably got a good idea of who your leading competitors are, so examine them more thoroughly.

Aside from these quantitative details, you should also scope out social media with a qualitative approach. Check out what types of posts are resonating with their audiences, what types of thumbnail images they include and how they interact with their fans in general. This information can be vital when you’re constructing your own social media strategy.

4 – Interview their customers

Using social media, you may be able to discern which followers are also paying customers of your competitors. Feel free to message them and ask them why they chose your competitors services. More importantly, ask them what can be improved about your competitors services so that you can offer something more valuable!

In the age of information, it’s so easy to adopt a narrow-minded approach to your business and completely forget to connect with people directly. After all, it is people who are paying to keep businesses afloat, so you should try to learn as much as you can about the customers within your niche.

Zachary Cohn, in an excellent Slideshare presentation about customer interviews, advocates the importance of talking to an abundance of people rather than basing your strategy off one single opinion. He states:

Keep talking to people until you’re hearing the same stories over and over and over again.