Competitor analysis: The ultimate guide
Robust competitor analysis is a crucial aspect of just about any business, no matter what scale you’re at. It’s important to know what your competition looks like from the outside in order to better position yourself for long-term growth.
Your competitors can provide you with priceless insight to help pivot your business and thrive in today’s competitive markets. Every marketer worth their salt knows that before anyone can begin to gain traction and achieve success, they must be well-informed about their industry. It’s crucial to know what comparative organizations are doing, what they’re saying and ultimately where they’re going wrong.
By conducting thorough competitor research, you will gain a valuable understanding of your own business and ultimately find gaps in the market that will provide you with new opportunities to explore. By combining your own understanding of the industry you operate in, with a variety of competitor analysis methods and software, competitor data will have the power to propel your business forward.
Here’s the Relative Insight guide to competitor analysis.
What is competitor analysis?
Competitor analysis can be defined as identifying and assessing the strengths and weaknesses of your competitors in comparison to your own. Analyzing the competitor landscape is nothing new – but using Relative Insight’s text analytics platform to do it, is.
Through competitor benchmarking, companies can understand how their marketing, products and services measure up in comparison to direct competitors or the wider industry. You’ll know which business tactics are working, which are failing and how you can use this information to scale your business and enhance your strategy.
Insights can be utilized to establish future goals for yourself in terms of superior performance, enhancing the customer experience, in product development or to improve the services you offer.
Why is competitor analysis important?
Carrying out a competitor analysis shouldn’t be thought of as a one-time project, but an ongoing part of your company’s strategy. The benefits of competitor benchmarking are clear. They enable you to:
- Develop an overview of your company, how it performs and understand your own strengths and limitations
- Identify any gaps in the market
- Improve and develop new products and services
- Uncover market trends
- Continuously adapt and evaluate your marketing strategy to remain competitive
While there is no one approach to competitor research and analysis, it’s important to understand your company’s individual goals and how learning about your competitors could ultimately benefit you.
Types of competition
When conducting a competitor analysis, the first question to ask is: Who are my competitors? Competitors come in all shapes and sizes, but there are typically three types of competitors to consider: direct, indirect, and replacement.
Direct
Let’s start with direct competitors. A direct competitor is one that satisfies the exact same demand as you do. They are the companies or brands that currently offer a very similar product or service, specifically in the same category and industry.
An example is Coca-Cola and Pepsi.
Indirect
An indirect competitor is a business that does not offer the same product or service that you do but targets the same audience. However, their existence could be threatening enough to be considered a commercial threat.
An example would be Airbnb compared to a traditional hotel chain.
Replacement
Replacement competitors represent the other. They are the brands that sell a completely different product or service in a totally different category, but where your customers could choose to spend budget, rather than with you. These are brands that have the capability of replacing your business by offering a new solution.
An example would be Apple’s iPhone compared to Canon’s cameras. iPhones enable customers to take high quality images without the need for an expensive camera.
Identifying your competition
Using the likes of Google, you can identify a solid list of your competitors by simply searching for your brand name or the service that you offer. For example, if we searched “beauty subscription boxes” we would see firstly who is ranking for this key term – and secondly, what businesses are running paid search campaigns for this term.
Keeping a finger on the pulse of online activity can also help in your endeavours to crack the competitor landscape. There are huge communities in online forums and social media, where people will regularly ask other users for recommendations. Chances are, you’ll be able to find some of your competitors here. Furthermore, keeping an eye on trends in the news and specific trade publications will alert you to any big plans or releases your key competitors are planning.
Finally, utilize your customer base! After all, they’re the people making the choice between you and countless other brands. Asking your customers about your competition will reveal insight into who your competitors are, what factors influenced your customer’s decisions and how you stack up against the competitive landscape.
How to conduct a competitor analysis
There is no one way to conduct an effective competitor analysis. But of course, the more areas you can gain an understanding of, the better insight you can extract. To get the best results from your competitor analysis, aim to select a few parameters for your research. Once you’ve identified your competitors, perhaps consider:
- Identifying your competitors’ strengths and weaknesses – During your research, continuously analyse what your competitors are doing well and where there are areas that they could improve. Understand what your own brand’s strengths and weaknesses are in comparison to the wider industry.
- Gain an overview of the company – Consider things such as size, revenue, number of clients, number of employees and what markets they operate in.
- Define what products and services your competitors offer – Analyse the product range and services your competitors offer, as well as identifying any unique features or qualities.
- Look at your competitor’s pricing – Identify how competitors price their products and uncover any offers, perks or discounts they might have.
- Analyse your competitor’s marketing and brand messaging – Discover how your competitors market their products, communicate to their customers and speak about what they do. Identify what marketing tactics your competitors are employing, evaluate their content and social media strategy.
How to make the most out of competitor insights
Once you’ve completed your competitor analysis, make sure to get the most out of your insights in the following ways:
Use insights to inform product development and innovation
Competitor benchmarking can help you develop new products, improve existing ones and keep your brand ahead of the curve. In order to do this effectively, it’s important that you’re listening to the right audience. This way, you’ll be able to use competitor insights to develop a product or service that ticks all the right boxes for customers.
Define brand position
Want to stand apart from the competition? Insights discovered from competitor analysis can help define where your business sits within the market and highlight key areas of differentiation.
Differentiate tone of voice
The words you use to communicate with your customers can speak volumes. Competitor analysis can help you to find your brand voice, as it allows you to see how other players in your industry are communicating. You can then identify what’s been done already and carve out a unique identity for your brand. For example, if all competitors in the space are using jargon and industry lingo, consider taking a more personal approach that makes it easy for customers to understand what you do and why they need your product or service.
Improve customer experience
Find out where competitors are failing their customers by looking at customer reviews on their websites and third-party sites like Trustpilot. Use these competitor insights to develop strategies that enhance the customer experience at every touchpoint. This is a great opportunity to be different and show customers that you’re listening.
Competitor analysis meets Relative Insight
If you’re looking to take your competitor analysis to the next level, look no further. Relative Insight is a text analysis tool that utilizes comparison to squeeze more value out of competitor data, taking your competitor research a step further.
Relative Insight enables brands to discover even more about their competitors. The text analysis tool surfaces actionable insights around how brands and products stack up.
Our technology gives you the power to find and compare your competitors’ strengths and weaknesses. Relative Insight pinpoints topics, words, phrases and grammar that are unique to different data sets. This helps organizations understand what makes various players unique in the market – as well as where businesses share similarities.
Our software can analyze any form of text data to help you understand how competitors, consumers and the wider industry are talking. Commonly analyzed competitor data sources include:
- Customer service channels (CX transcripts)
- Customer surveys
- Online reviews
- Social listening data (brand mentions and brand voice)
Relative Insight generates unique competitor benchmarking insights that capture the context of the market landscape in ways that standard frequency-based analysis does not.
Competitor analysis if often a time-consuming undertaking for businesses. Relative Insight is an efficient way of analyzing millions of words – in fact, everything that has ever been written about your competitors – reviews, websites, social posts etc – without actually having to read them. You’ll find competitor insights you didn’t even know to look for.
Types of comparison for competitor analysis & benchmarking
Brand positioning & brand messaging
Comparing opposing brand communications can reveal what makes each competitor unique, as well as surfacing any commonalities. By analyzing your competitor’s websites, social posts and advertising collateral, you can pinpoint the words and tone of voice your competitors are using to promote their own products and communicate with their consumer base. This enables brands and agencies to figure out how to differentiate themselves, as well as identifying any whitespace.
An example in action: Analyzing brand positioning for three gin brands to identify what makes each unique
Brand perception
Building comparisons using text data can reveal how people are talking about different brands, products or services. This provides a unique understanding of how consumers perceive your brand in relation to your competitors. Relative Insight can help you track brand mentions and changing sentiment, turning social listening data into powerful competitor insights as a form of benchmarking.
An example in action: Analyzing how consumers perceive inclusive, body positive lingerie brands
Customer feedback and CX
When it comes to competitor benchmarking, understanding the why that underpins consumer preferences and decision-making is priceless. By analyzing your competitor’s review data or customer service Twitter channels, you can gain a richer knowledge of the service your competitors provide. This will allow you to develop a rounded understanding of the buying habits and purchase decisions of your target audience.
Employer brand and talent
Brands aren’t only competing for consumers – they’re also likely tapping into the same talent pool. That’s why it’s essential that brands understand how they’re perceived as an employer. The likes of Glassdoor make it simple for employees to review your company. Checking your own employee reviews and comparing these against your top competitors will give you a greater understanding of the competitive landscape from an employee perspective. Since you’ll be competing with these brands for talent, comparing reviews, website copy and job adverts will help you see what differentiates the way competitors sell their business in order to attract the best candidates.
An example in action: Comparing job ads to see how social media giants vie for top talent
The bottom line
Having a solid understanding of your competitors is invaluable to your business. While there are plenty of different ways to learn about what your competitors are up to, comparative text analytics surfaces the unique differences. In a landscape where brands and agencies must find their unique selling point, competitor analysis and benchmarking is how you make that happen.
