Brands often conduct market research to find new customers while doing competitive analysis to differentiate their business from competitors. This analysis will enable small businesses to gain a competitive advantage and thrive.
When did you conduct market research and competitive analysis for your business? Some businesses downplay the value of this important analysis, while others simply do a quick check on their competitor’s social media presence and website. You could be missing important information that could grow your brand.
In this guide, you will gain insight on conducting a competitive analysis to give your brand a competitive edge in the market. The difference between growth and stagnation, failure and success, could be market research and competitive analysis.
Market Research Helps You Find Customers
If you want information about market drivers and customer needs, you will need to conduct market research. The data from market research is essential for sound decision-making by project managers.
Problems solved by market research
Project managers and business owners make several business decisions facilitated by market research. Some of these problems include:
Thorough market research helps you identify prevailing market needs and address customers’ needs. The data can also help to establish market size and segmentation. With this information, you can track a customer’s journey and create better marketing models.
Market research will help determine the demand for your product or service. This data will enable you to solidify pricing by examining the prices for alternative products. Examining your competitors’ products will enable you to decern features of your products you can improve.
Investigating the ideal marketing options
Market research also helps with determining market saturation. You will know similar options available for customers. This knowledge is essential in creating messaging and in measuring marketing campaign results.
Location and Risk mitigation
Understanding the blend between economic trends and human behavior can help grow your business significantly. With market research, you can mitigate risks even before your business becomes operational.
Market research equips you with demographic information to help you determine where your customers come from and their income range.
You can use existing sources to do market research or conduct your study by directly asking questions to potential customers. Though using existing data may not be time-consuming, it may not provide accurate information specific to your audience.
If you want to conduct your own research, you can use several methods, including surveys, focus groups, questionnaires, and in-depth interviews.
Intent Data Can Give You What You Need To Succeed
Knowing what your customers are looking for and searching for will give you a cutting edge over your rivals. It also enables you to solve the problems they are facing right away, without wasting time trying to prise what they want from them. This becomes even harder if you’re selling to other businesses, or in the B2B niche.
Businesses can be harder to sell to, but with the right intent data, you can target people who are already looking for the services you offer. It’s made up of page clicks, how much time they spend on a page, etc. With that information, you’ll already be offering something that people are searching for. It’s the kind of market research that makes a huge difference.
Competitive analysis is a study you conduct to determine how your competitors work and discover areas to out-perform them. This analysis will enable you to see your competitors’ moves that you would otherwise not know about. Though the market could be crowded, you can focus on your top 3 competitors to gather relevant information.
Identify your competitors
Correctly identifying your competitors is the first thing you should do to help you compare data accurately. Since what works for a similar business may not work for your brand, you do well to divide your competitors into direct and indirect competitors.
Direct competitors are businesses operating in the same geographical area and offer products that can substitute yours. On the other hand, indirect competitors offer different products from yours but can satisfy or address the same customer problem.
In your competitive analysis, you want to focus on direct competitors. You do not want to spend too much time studying indirect competitors because your target audiences vary. Nevertheless, keep a close eye on them because they can easily cross the line to direct competition.
A probable market shift where indirect competitors become direct competitors underscores the need for competitive market analysis. Otherwise, you may realize the change when it is too late to recover.
Know your competitors’ products
The success of any business is determined by the quality of its product or services. You want to analyze your competitors’ products or services and establish their pricing and discounts.
Determine if they are high-cost or low-cost providers, their market share, and whether they focus on a one-off purchase or volume sales.
Furthermore, you can endeavor to know their ideal customers and how they differentiate themselves from competitors.
Study your competitors’ sales strategy and results
Though it is challenging to conduct your competitors’ sales analysis, it is worth the effort. Establish what their sales process looks like and the channels they sell through. You could also be interested in whether your competitors operate in multiple locations, expanding or scaling down.
It is also important to know their yearly revenue and total sales volume. Ask yourself why customers buy from these competitors and the level of salesperson involvement in the purchase journey. You could also study customers who ended their association with the company and the reasons for doing so.
Information from public companies is easily found in the published annual report, but if your competitors are privately owned companies, you may need to do some sleuthing for the information.
You can also search through your CRM or interview customers who indicated they were contemplating buying from the competition. Request the marketing team to implement a system where potential customers are asked about competitors they are considering.
The system should ask leads (using a form field or one-on-one conversation with a salesperson) about their service providers, companies they have used in the past, and who they are considering buying from.
After identifying your competitor, instruct the sales team to ask why the prospect wants to switch to your product. However, if you lost the deal, follow up with the prospect customer and ask why they chose your competitor. An open-ended question will generate honest customer feedback on what attracts and turns them away.
Examine competitors’ pricing and offers
A few factors determine correct product pricing, and one such factor is your competitors’ prices for similar goods and services. If you believe your products have superior features to competitors, you can charge slightly higher. However, your sales team should be ready to explain the additional costs.
Conversely, if you feel that your product addresses a gap in the industry, you can charge slightly lower than your competitors and appeal to prospects unwilling to break the bank for a product. Ensure your prices are reasonable and resonate with your prospective clients.
You do well also to take note of any offers your competitors give and how to match those perks. Your competitors could provide longer-free trial versions, which could contribute to the loss of customers. If you decern that to be the case, consider how to match those perks.
Examine your competitors’ marketing strategies
You could determine competitors’ marketing efforts by analyzing their websites. You will want to know if they have content marketing strategies such as a blog, white paper, eBooks, webinars, videos, featured articles, FQAs section, podcast, press release, case studies, media kit, etc.
Pay attention to your competitor’s content strategy
You want to keep an eye on the quantity of your competitors’ content items. How many blogs, eBooks, or white papers have they published? Analyze the frequency at which they publish their content; if you find that your competitors have a robust content archive, know that they have been publishing regularly.
Next, evaluate their content quality because if their content lacks quality, the frequency of publication will not matter. Review a few of their blogs rather than examine all their posts for easy comparison.
As you examine their sample content, look for accuracy, grammar and spelling mistakes, depth of the content, tone, readability, visibility, and availability. You do well to examine their infographics and images used within the content.
When you fully understand your competitor’s content marketing plan, establish if they are using them to generate leads.
Learn the technology stack your competitors use
Understanding the technology your competitors’ have deployed can help your company enhance its momentum. For instance, you may realize that your competitor uses strong customer service software to get starling customer reviews that you could implement in your organization.
Determine the engagement level for competitors’ content
You could also look at how your competitors’ target audience interacts with their posted content. You can consider the number of shares, comments, and likes a content generates and see which topics have better engagements. It is also advisable to check which media generates more engagement and why.
It is also important to keep in mind that just because something works for your competitor, doesn’t mean it will for you. Bitcoin has been popular lately, so perhaps a competitor’s post about adding Bitcoin payments was popular.
However, if anything to do with Bitcoin isn’t relative to your particular business, this could be ineffective for you, or could even push people away if they think you are trying to jump on a bandwagon. Other similar examples could be thought of as well.
Check their strategy to promote content marketing
After looking at content engagement, know-how your competitors promote their content. Take a look at their keyword density, image ALT text tags, and use of internal linking.
Analyzing keywords will help you know those working well for them that you haven’t used. You will also know their highly shared content to help determine the correct social media pages to use.
You could also establish their backlinking strategy and sites sharing their content. Additionally, you can ascertain their keywords’ difficulty level and sites that refer traffic to your competitor’s site.
Benefits of Competitive Market Analysis
It lets you know what makes your product stand out and its unique value proposition. This knowledge helps you develop an effective marketing plan.
It helps you identify your competitor’s shortcomings, exposing marketplace opportunities. You can test new marketing strategies that your competitors are yet to explore.
Competitive market analysis also helps you know your competitors’ right moves. This information will enable you to upgrade your marketing campaigns to stay relevant to industry standards.
Looking at your competitors’ customer reviews will inform you of what their products lack so that you can add this feature to your product and address consumers’ concerns.
Competitive analysis will also provide you with benchmarking information to measure your growth.
Challenges of Competitive Market Analysis
Though examining competition is generally recognized as beneficial for a business’s long-term success, some experts have cautioned against flawed competitive market analysis. Experts reason that competitive analyses based on inaccurate or incomplete data can mislead a company to develop faulty business strategies.
As business competition becomes stiffer, competitive analyses have expanded in complexity and become more time-consuming. It requires dedicated resources to conduct effective market research and analysis. Nevertheless, others observe studying competition and keeping pace with their products and strategies can help a business create its unique product design.
Some argue that strictly benchmarking your business performance against your main competitors can negatively affect your profitability and create a false sense of security. You may fail to make necessary changes to your business because you feel it is doing better than the competition. Your competitors could be performing at the lowest levels.
Furthermore, every company is unique, and what works for one may not work for another. Other experts also argue that too much focus on competitive market analysis could blur your vision, spending little time planning for the future.
If you want your business to stand out, you need an effective strategy that champions uniqueness and differentiation in the marketplace. However, ineffective competitive market analysis encourages imitation and tweaking competitors’ products.
Overemphasis on the competitive analysis and following your competitors’ every movement could mean focusing on the wrong guys. It is shortsighted in range, possibility, and depth, resulting in your business running in cycles.
An occasional scan of your competitors’ actions could be valuable in making a sound decision. Nevertheless, you should be interested in advancing your own business to achieve your outlined goals.