The saying, “the best offense is a strong defense” applies to business as much as it does to sports. But you have to know WHO you are competing against in order to stand out and stay ahead of your competition.

Be honest with yourself. When was the last time you ran a competitive analysis for your business? More importantly, do you know how to conduct one efficiently?

If you are unsure, have not  scanned your competitors’ website and social media accounts as your strategy, then you are likely missing crucial information that could help you get a leg up on the competition.

Let’s start with the basics. 

What is a competitive analysis and why is it important?

A competitive analysis is a business strategy in which you identify your competitors and evaluate their strategies to determine their strengths and weaknesses relative to those of your own product or service. 

This analysis provides both an offensive and defensive strategy to identify opportunities and threats so you can anticipate their behavior and form a strategic plan accordingly to ensure your stay on top of your industry and that your customers choose you.

A competitive analysis is important because you will be able to:

  • Identify gaps in your market
  • Develop new products and services
  • Discover market trends
  • Market more effectively to outcompete your competitors

In this article, I will show you how to effectively conduct a competitive analysis.

How to Conduct a Competitive Analysis:

#1 Identify Your Competitors

This may seem obvious, but it’s a crucial first step. Do you know who your top competitors are? If you sell a product or service online, I guarantee you are competing against dozens, even hundreds of businesses going after the same group of customers.

If you need a little help identifying your competitors, Google is a helpful resource. By simply searching the type of service or product you are offering, it is pretty likely a few of your top competitors will show up.

Known as competitive intelligence gathering, you’ll be able to:

  • Understanding your competitive landscape and best position your brand
  • Understand and monitor your competition to keep aware of current marketing 
  • Learn from their strengths and capitalize on gaps

How to locate your competitors?

If you need a little help identifying your competitors, Google is a helpful resource. By simply searching the type of service or product you are offering, it is pretty likely a few of your top competitors will show up.

Next, you will want to assess your competitors’ digital footprint. Research their social platforms, the content they post, news features, customer reviews and organizations and professional affiliations they are associated with. Helpful resources to locate this information are Alexa, Keyword Spy, Hoovers, Ahrefs and ReferenceUSA.

Which competitors should I monitor?

Once you’ve established your list of competitors, it is important to categorize them in order of relevance to your business. There are three categories of importance: primary (direct), secondary (indirect), tertiary (indirect).

Primary Competitors: Businesses in this category are your direct competitors which means they are targeting the same or similar customers, have the same or similar product or service, or both.

Secondary Competitors: Businesses in this category are indirect competitors and may provide products and services that are higher or lower in price, similar, or could satisfy the same customer need or solve the same problem. Example: Stitchfix and Fabletics both sell women’s clothing. However, Stitchfix sells stylish outfits for everyday wear whereas Fabletics sells athletic apparel. 

Tertiary Competitors: Businesses in this category are indirect competitors and sell products or services that are related to your business. These businesses are great to keep in mind when considering expanding your existing product line or partnering with in the future.

How do I track my competitors?

To keep an organized list of your competitors, use a spreadsheet that outlines the following:

  • Business name
  • Location
  • Mission Statement
  • Product Offer
  • Overall Business Strengths and Gaps
  • Competitive Category

Click here to access a free template to track your competitors.

    #2 Research Competitor’s Website & Overall Customer Experience

    When analyzing competitor websites, here are some examples of what to review:

    • How strong is product imagery?
    • How strong is messaging tailored to their products?
    • How detailed are product descriptions?
    • Could the descriptions be better?
    • What call-to-actions are present?
    • Are call-to-actions easily noticeable and placed strategically?
    • Is an email capture component present? Is it prominent?
    • Where are their social media icons located?
    • What social media icons are featured?
    • Do they have a blog? How frequently do they post? What topics do they write about?
    • Is the website optimized for mobile?
    • What methods of contact are available? What hours, if any, are available for phone support?
    • How long does it take to receive a response to email, live chat, and contact form submissions?
    • Do they have an abandoned cart save feature? If so, at what step do you receive abandoned cart emails and what is the messaging?
    • What messaging is in their banners?
    • How often do they run promotions? What are the benefits of each promotion?

    Keep in mind that every website will be different, however, from each you will learn how to have a well-rounded account into what is occurring in your industry.

    You can use SEO analysis tools like Ahrefs to monitor the amount of traffic your competitors receive organically. It could possibly reveal keywords you should also target.

    #3 Perform a SWOT Analysis on Your Competitors

    Evaluate your competitors’ by performing a SWOT analysis to assess their strengths, weaknesses, opportunities, and threats.

    Some questions to get you started include:

    • What is your competitor doing really well with? (Products, services, content, marketing, social
      media, etc.)
    • Where does your competitor have the advantage over your business?
    • What is the weakest area for your competitor?
    • Where does your business have the advantage over your competitor?
    • What could they do better with?
    • In what areas would you consider this competitor as a threat?
    • Are there opportunities in the market that your competitor has identified?

    You’ll be able to compare your results against your competitors. By doing this, you can better position your business and you start to discover areas for improvement within your own business.

    #4 Identify Competitors’ Industry Position

    Each market has a specific demand and expectation from its customers. Identifying your competitors’ positioning strategy will best help you determine what those are.

    When identifying a competitor’s position, identify the following:

    • What are the customers buying? Are they price or experience centric?
    • How do they differentiate themselves? What features and benefits are highlighted?
    • What makes them unique?

    It is important that you identify these core position questions because they will help you determine how you position your business in your industry and whether you are positioning yourself next to or against your competitor.

    In order to collect positioning information on your competitors:

    • Subscribe to their newsletters: This will show you how they communicate with their audience.
    • Follow their blog: This will provide you with how they educate their audience and on what topics.
    • Follow them on social media: This will show you how they foster their community.
    • Purchase from them (product-based businesses): This will give you a tangible glimpse of their products, packaging, and shipping time.
    • Place the product in cart and abandon checkout: This will show you whether they have a nurture system in place to get you to complete the sale. Note whether one exists and if so, the copy in the email and type of email sent.

    #5 Assess Your Competitors’ Content Strategy

    You will want to assess not only your competition’s content marketing strategy but if it’s effective.

    Review the quantity.  Do they have a multitude of blog posts or a small handful? Are there several white papers or just one ebook?

    Determine the frequency they publish content.. Are they publishing something new each week or once a month? How often does a new ebook or case study come out?

    If you discover a wide variety of blogs, most likely they are publishing regularly. This can help you define value content to produce for lead generation.

    Assess the quality of their content. If it isn’t high value or lacking substance, their audience will not find much value from it.

    When assessing competitor’s content, look into:

    • How accurate is the content?
    • Are spelling or grammar errors present?
    • How in-depth is the content? 
    • What tone do they use?
    • Is the content structured for readability? (Use of bullet points, bold headings, and numbered lists)
    • Is the content free and available to anyone or require opt-in?
    • Who is writing the content? (In-house team? One person? Multiple contributors?)
    • Is there a visible byline or bio attached to their articles?

    Also, pay close attention to the photos and imagery your competitors are using. Are they using generic stock photos or creating captivating images with text overlays and call-to-actions.

    #6 Review Pricing Model

    This is highly important in determining your competitive advantage. Research competitive pricing across a variety of sources such as Google, Amazon, Ebay, etc.

    This will help you establish what customers are willing to pay, but also what value you bring to the table to compete whether higher, same or lower priced than your competition. Make sure to always maintain profitable margins!

    #7 Resolve Shipping Process

    Smooth shipping is an essential part of your business. You should assess how your competitors communicate shipping expectations and how their products are shipped.

    Shipping costs are another competitive component to your business that can affect the success of your online store.

    If you cannot afford to offer a competitive shipping price, here are some alternative offers you can include:

    • Personalization
    • Gift cards
    • Social media giveaways
    • Loyalty program
    • Strong customer service

    #8  Assess Customer Feedback

    Customer reviews will provide the cold, hard truth on how great what a business provides really is. This will also review gaps in your competitors’ customer experience that you can capitalize on and differentiate your business. You can research customer testimonials about your competitors:

    • Company website
    • Social media comments on business page
    • Comments under social ads
    • Google reviews
    • YouTube influencer reviews
    • Amazon reviews

    #9 Assess Social Media

    Social media is essential to the online connection with your audience especially on social industry giants like Facebook and Instagram.

    You can learn a lot from researching your competitors social media accounts.

    If your competitor’s social media following is large and engaged:

    • Great indicator of a buying market for your products or services
    • Will reveal what content your audience best responds to 
    • A benchmark of the level of quality you will need to provide to build your own community

    If your competitor’s social following and engagement is weak:

    • The market is potentially weak
    • Your customers might not be on social media or that particular platform
    • An opportunity for you to emerge as the leader

    Here is a list of some of the major social media platforms you might find your competitors:

    • Facebook
    • Instagram
    • Pinterest
    • Twitter
    • Snapchat
    • TikTok
    • YouTube
    • Reddit

    You will want to evaluate the following:

    • How does their social media presence look overall?
    • Which social media channels do they use the most?
    • How do they speak with their customers?
    • How often do they interact with their following?
    • How strong is their engagement?
    • How many shares, retweets, and repins do they get?
    • How frequently do they post something new?
    • Do they share curated content from other sources?
    • What is the overall tone of their content?
    • Which social media channels are they missing? Is there opportunity for you there?
    • What are they posting?
    • What percentage of the posts are about their business?
    • What percentage is solely meant to increase engagement or gain followers?

    #10 Bonus Resources for Competitive Analysis

    • Business longevity: check the date of their domain registration
      • Resource: www.whois.net
    • Business culture: check website to see if they are hiring
    • Funding: check to see if they are requesting additional funding 
      • Resources: Crunchbase, Indiegogo, Kickstarter
    • Keyword Monitoring: keep up to date on industry news and competitor updates
      • Resource: Google alerts

    A competitive analysis is a great and effective way to keep track of what’s happening in your industry and where you stand and most importantly how to stay ahead. While these are not meant for daily tracking, it is important to conduct every so often (i.e. quarterly, bi-annually, etc.)