If you are planning to start a business, introduce a new product, or expand into a new market, you must analyse your competitors. This will give you an idea of the direct and indirect competition you face as well as how your offering stands out.
It is also worthwhile analysing your competitors on an ongoing basis. This ensures you keep up with changes and improvements they make, as well as how those changes and improvements might impact your business.
Competitor Analysis Tips
1. Understand What You Are Trying to Find Out
Knowing who your competitors are, what they sell, and how much they sell it for is not enough for proper competitor analysis. As you need more information than this, the following questions are a good place to start:
- How many competitors there are, how big are they, and what is their location?
- What are your competitors’ strengths and weaknesses?
- Where possible, find out your competitors’ turnover and profit
- What products and services do they sell and, crucially, how do those products/services differ from yours?
- How does the competitor’s offering compare to yours in terms of your USP?
- How does the competitor’s offering compare to yours in terms of quality?
- What do your competitors charge and what discounts and promotions do they offer?
- What’s their advertising and marketing strategy?
- Do you know your competitors’ plans for the future?
- Why would a customer choose a competitor rather than you?
By getting answers to the above questions, you will have a much clearer picture of your competitors and how customers perceive them in the market.
2. Be Honest and Focus on Your Customers
When getting answers to the above questions, it is important you stay honest. There is no point looking at your competitors in an overly optimistic way. You won’t learn anything, and you won’t find ways to improve your business.
In addition, always try to look at your competitors from the viewpoint of your customers.
3. Focus on the Main Competitors
Don’t analyse your competitors based on who is the easiest to research. Instead, you should always focus your efforts on the main competitors, so you have as good an understanding as possible about the businesses who are getting customers that could be yours.
If you have a lot of competitors, focus on the top five.
4. Do Thorough Research
The questions above give an indication of the amount of research you will have to do to conduct competitive analysis. The more you do, the more beneficial the analysis will be to your business.
Also, remember that competitive analysis is not a one-time project. You should learn constantly about the activities of your competitors to help you keep ahead of them.
5. Buy Something
Becoming a customer of your competitors is the best way to understand the customer experience. This applies to the purchase process, customer service, quality of product, and more.
6. Conduct Surveys
You should speak to customers to get their viewpoint. Ideally, this should be both your customers and your competitors’ customers. A survey is an ideal way of doing this. The survey should include questions about their experience, what they like about you/your competitors, and what they would like to see improved.
A point above talks about competitor analysis being an ongoing process. You can do this by being active in your local business community and within your industry. This means attending trade shows and conferences, taking part in local business events, and becoming a member of relevant organisations.
For more tips, professional advice, and practical help with your business, please contact a member of the Gilroy Gannon team today.