Developing a Competitor Analysis is a step in the research phase of business planning to help you to understand more about businesses that are in the same consideration set of your customers. What you’re aiming to do by analysing competitors is to gather intelligence about where your ideal customers are going for services or products like yours and to find out why they are not coming to your business.
Whether you are developing a business plan and doing the competitor analysis as part of that exercise or whether you are looking to make improvements in your products or marketing, doing this research will reveal insights that will be helpful to you.
Choosing Businesses for your Competitor Set?
To select which businesses to research you will use several sources. Firstly, you may already know of businesses that you identify with as competitors. Secondly, there may be businesses that aren’t direct competitors, but they do offer similar products or services similar to your business, or they may service a different market, or be located in a non-competitive area or distribute through different channels to you.
Don’t assume that you know who these businesses are already, do your research online. Search using search terms that your customers would typically use (put yourself in the mindset of your customer) and see who shows on page one of Google. This may reveal competitors who you weren’t aware of.
Choose five businesses that you believe are a relevant comparison to your business and choose businesses that present themselves professionally, appear to have brand equity, have a good online reputation and generally appear to be promoting themselves well.
What to Assess?
The online environment makes it very easy to get a transparent view into what other businesses offer, how they service their customers, pricing and how they are promoting themselves. Below are suggested attributes to look for:
- What is their primary focus? Is their unique selling proposition clear? How does it compare to yours?
- Who is their target market? Can you tell from their website?
- Take note of their google reviews. What is their average star rating? How many reviews do they have? What are their customers saying about them?
- How do they rank in Google for search queries that your customers most likely use? Are they coming up on the top of page 1? How does your business compare in these search engine page rankings?
- What do you like about their website? Do some secret shopping on their website and see how you enjoy the user experience.
- Have a look at their social media pages? How professional are their pages? Are they posting regularly and getting plenty of engagement? How does this compare to your business?
Turning Insights into Action
Once you have completed the table above you will have a number of ideas about how your competitors are performing compared to your business. You will also have generated a number of ideas that you can investigate for your business with the aim of acquiring more customers.
Take these insights and create an action list for yourself and prioritise them with a timeframe so that you make them happen and in doing so move your business forward on a growth and sustainability trajectory.