“Strike the right balance between respecting your rivals and focusing on how you can beat them, and you’ll have a winning formula.” – Richard Branson
It is impossible to be at the top of your game without first understanding what you are up against. Ask anyone that sells a “commodity”, and they will tell you that their customers are often confused about what differentiates their product from that of their competitors. Why?
Because after awhile, every business starts to sound the same — promising the same benefits, in the same time frame at roughly the same cost. In order to achieve a sustainable competitive advantage in the market, you need to conduct a thorough analysis of your competition.
Why you should conduct a competitive analysis
A web search on “Competitor analysis” mostly brings up advice for small business owners preparing a business plan. Imagine if your organization never looked at the competitive landscape after they put together an initial business plan. This approach would likely land you in the same spot as the Taxi industry when Uber came on the scene. Completely blindsided.
Strangely, most large organizations have no formal process in place for collecting competitor intelligence. But here are some benefits to putting one in place:
- Gaining an understanding of who else your customers are considering when making the decision about your product offering.
- Understanding what products your competition is promoting and how they are communicating to prospects.
- Knowing where your competitors are spending their marketing dollars (online ads, social media, sales events, etc).
- Recognizing your competitors’ strengths and weaknesses.
- Increasing intelligence and insights on where to focus and how to push your business to new levels.
Now that you understand why it’s important to get a handle on your competition, how should you get started?
3 steps to gather competitor intelligence
Conducting a competitive analysis doesn’t have to be a year-long, complex process. In fact, you are far more likely to make this part of your regular business approach if the process is simple.
With that in mind, here are 3 steps you can follow to start gaining competitive intelligence immediately.
Step 1: Determine who your competitors are
You may be able to easily come up with a list of companies that you compete with head-on. But in business, your list of potential competitors is much broader. Consider who else is vying for your prospects’ time and attention. (And if you don’t know, now is a good time to ask your customers for their input).
- Organizations that provide the same benefit and target the same market
- Organizations that provide the same benefit but target a different market
- Organizations that offer the same benefits in a different way
- New Entrants or Other options to achieve the same result, such as building the capability in-house, upgrading equipment, etc.
- Choosing to do nothing (This is by far your biggest competitor, as people generally hate to change)
Step 2: Figure out what you want to know
Once you have the list of your competitors ready to go, what information should you collect about them? You may want to conduct a formal SWOT analysis, or you can use the below questions as a starting point.
- Who is the competitor targeting?
- What does the competitor do well?
- Where are they having success in the market?
- Where does the competitor fall short?
- What is their value proposition? Is it strong or weak?
- What tone of voice do they use (Casual or Serious, Educational, Informative, etc)?
- What content are they producing and promoting? What events are they participating in?
Step 3: Tap into Different Sources of Information
There are numerous ways to find information about your competition – online and offline:
- Check out your competitors’ website and marketing collateral. You can easily do this by going to their website and social media. Annual reports and other financial documents, as well as press releases also provide a great deal of information about where your competitor is focused. Also, don’t forget to pick up sample sales collateral and marketing content while at trade shows or other industry events.
- 3rd party research. Think about the research and analyst firms that are relevant in your industry (such as Gartner or IDC for the IT Industry). They often publish agnostic reports detailing strengths and weaknesses of players in a specific category. You can also seek out product review sites to see what users are saying, such as CNET for electronics, Product Hunt, and Spiceworks for IT solutions.
- Interview business colleagues, salespeople and industry influencers to understand what your competitors are doing and where they may be having success. These can be formal interviews or causal conversations at an industry networking event. A great source of information is new employees that just left their employment at your competitor.
Ultimately the purpose of understanding where your competitors are and what they are doing is so that you can position your business for success. The information you collect will help determine where your company may have a unique advantage to provide and communicate to your prospects. And isn’t that what we all strive for?