If you’ve been in business for a while (and even if you haven’t), you hopefully know your product or service better than anyone.
And if you’ve laid the foundation by doing the hard work to create your Dream Buyer Avatar (see previous blog post), you should already have a good idea about who you’re talking to and how to connect with them.
There is one additional very important piece that you need to consider before you begin marketing to your prospects to gain more customers.
Imagine that you are the coach of a team headed to the championship game.
If you are a good coach who is serious about earning that championship trophy (aka new customers), then you will do the research to beat your competition. Right?
You will need to know what the other team is up to so that you can anticipate what plays they will be running and how they might be planning to win the game.
Outwork. Outsmart. Outplay.
Hopefully you’ve scouted some of their recent games or watched game film, and have extensive notes on their strong players, their weak players, their defense and their offense. Only then will you have a chance of putting your team in the best possible position to win.
Why wouldn’t you do the same research and preparation to win in the game of business?
Your business will always have competition. If you don’t know what your competition is up to, you could be missing out on opportunities. Or even worse, losing customers to competitors who are out-marketing you.
What Will a Competitive Analysis Do for Me and My Business?
We’ve already likened a competitive analysis to a detailed game plan to win the championship game. Hopefully, you agree that this is WHY a competitive analysis is important.
Now let’s take a look at what you will get from doing a competitive analysis.
Instead of strong and weak players, and offense and defense, your competitive analysis should provide you with the following benefits once completed:
- Determine Your Value Proposition: Where do you fit in the context of what others in your industry are doing? This should inform your marketing communication and how to position yourself as different or better than your competition.
- Identify What Your Competitors Are Doing Well: Think of this as stealing from the playbook of the other team. Perhaps they know something you don’t – a market trend, the right time to discount, a current event to capitalize on, etc. Use this information to stay relevant and “in the know” of what is going on out in the marketplace.
- Identify Where Your Competitors Are Missing Opportunities: This will inform where you can step in and take advantage in an area where a competitor may be stumbling. A perfect time to try something new and step outside the box of what you’ve been doing (and in a different direction than your competitor).
Making Your Competitor List as Narrow as Possible (and Why This is Important)
We learned in our last blog post (about creating your Dream Buyer Avatar) that it’s important to be as narrow and specific as possible when identifying to whom it is you want to market.
Casting a wide net could potentially involve spending a lot of money to blast a message at a large number of people, but probably won’t be relatable enough to break through the noise and connect with any of them.
QUALITY, not QUANTITY.
The same rule applies when it comes to making a list of competitors to compare yourself to…
QUALITY, not QUANTITY.
As an example, say you sell women’s shoes. Not just any women’s shoes, but high-end designer dress shoes that are popular among female professionals. It won’t help you to look at other women’s shoe companies who sell shoes to women if the shoes they sell also include running shoes, casual shoes, discounted shoes.
There are many other examples, but I hope you get the picture.
Bottom line: make sure your competitors are just like you – by niche, by geographical location, by price point, etc.
Additional advice on how to find relevant competitors in your online search queries.
Six Categories to Include When Doing Your Research
Once you’ve identified your 4-6 most relevant competitors, you’re ready to create a chart where you can plot out the same information for each of them. This format helps you to see them side-by-side so that you can look for similarities, differences and opportunities.
There are many areas you can consider when doing your research for a competitive analysis. We are providing you with six areas that are important to consider when you are determining how to position yourself for a marketing strategy, specifically.
- What are their competitive service offerings, at least their top three? Include pricing and descriptions.
- What is the relative size and profile of their primary niche target market (their Dream Buyer Avatar)?
- Do they have product/service offerings similar to what we offer that are featured towards the top of their website or dominantly in their other advertising (social media, email marketing, content marketing, etc.)?
- If so, how are they pitching these products/services on each of their platforms?
- Do they have a call to action (CTA) which leads to a high-value content offer (HVCO)?
- If they do have a HVCO, what is it and what are the terms/conditions?
Summarizing Your Findings in a SWOT Analysis
Once you’ve gathered the above information for all competitors and laid it out next to the same information for your own business, it’s easy to make comparisons and to identify opportunities. But you’ve got a lot of information all in one place, which can be overwhelming.
Now it’s time to extract your key findings and come up with some recommendations. This equates to your “master game plan.”
A great way to do this is to look at your own business, and in the context of what your competitors are doing, ask yourself to OBJECTIVELY list out the following for your business:
What are we doing well?
What are we struggling with and why?
Where are our competitors struggling? Are there any recent market needs not being addressed by our competitors?
What is our biggest competitor doing better than us? What problems are we not addressing?
This is commonly known as a SWOT Analysis, and it’s a framework for evaluating your strengths, weaknesses, opportunities and threats. It also acts as a summary to reference when you don’t have time to go back over the entire competitive analysis.
From this SWOT Analysis, you should be able to determine several key recommendations to follow as you prepare to market your services.
If you are wanting to get really granular, a SWOT Analysis can also be filled out for each competitor. Not necessary, but could reveal some additional key information to act upon.
(We’ve created a fillable template for you to download and easily fill out, linked below.)
You’re Now Ready for the Championship Game
You’ve done your research, scouted the other teams, gotten inside the heads of what your competitors are doing, and have determined what is and isn’t working for them.
Congratulations on being prepared.
Now, let the marketing game begin…