The products or services you’re selling may already be offered on the market by another business. That’s why you’ve probably noticed that even with your unique idea, you’re still not doing well as you expect. The worst part of it is that they’re performing better than you.
While this may be a scary situation for a solopreneur like yourself, it’s also a good opportunity for you to up your craft. One way to start is by doing a competitive analysis. Let’s discuss more about what it is, how it benefits you, and how to do it right below.
What is a competitive analysis?
A competitive analysis is a strategy to identify the business tactics and resources the main players in the market use to succeed. That includes understanding the strengths and weaknesses of the competitors.
What are the benefits of doing it?
The main purpose of doing a competitive analysis is to help your business perform better in its market and dominate it. For some business owners, doing a competitive analysis is a necessary step to save their company from costly losses.
Other benefits of a competitive analysis are:
- Creating new business strategies to earn loyal customers.
- Taking advantage of your competitors’ strengths and weaknesses.
- Expanding into new target markets.
- Knowing what products your customers need.
Follow These 7 Steps to Analyze Your Competitors
1. Identify your top competitors
Know who dominates your target market. For example, if you sell trendy clothing for Gen Z’s, identify which brands, boutiques, online sellers, and other business entities you’re competing against.
2. Do a SWOT analysis
SWOT means Strengths, Weaknesses, Opportunities, and Threats. This step allows you to visualize how you compare to other businesses and identify which various parts of your company you should be mindful of and can exploit.
3. Visit your competitor’s websites and examine the customers’ experiences
Looking at your competitors’ customer experiences is one of the best ways to tell what marketing strategies you should avoid and use. 5-star reviews will reveal what your competitors’ customers love about them.
1-star reviews will also tell you what your competitors’ weaknesses are to close your market gap. Don’t forget to pay attention to how they respond to complaints. The more they ignore complaints, the more you can exploit it to your advantage.
4. Look at your competitors’ current pricing and offers
Pricing and offers will determine the success of your strategies in terms of keeping loyal customers and gaining new ones. Customers will always buy goods from companies that offer affordable high-quality goods with more convenience.
5. Learn what technology your competitors use
Technology in business means anything. Pay attention to which e-commerce platforms your competitors use. Ask yourself these questions: Does your competitor use chatbots for better customer service, email marketing, and custom website extensions/plugins? Do they bring success? Can you use them?
6. Review social media feedback and performance
Like visiting your competitors’ websites for customer feedback, you can also examine their customers’ opinions through social media. The good thing about using social media is that you have a more accurate date of which demographics they’re popular in and which they aren’t.
7. Use tools to stay aware of competitors
Nowadays where digital marketing is the norm, social media is the best tool for staying updated and aware of your competitors’ business tactics. However, you’ll need to pose as a customer to get a clearer view of the strategies they use.
To do it, create an email and social media account. Then, use these accounts to subscribe to mailing lists and following your competitors’ social media pages
In business, competition is inevitable. But the best part of it is that it encourages innovation to make entrepreneurship an enjoyable career. The next time you feel that your business is threatened by a new market player, take a deep breath and bring out your notebook. Then, do a competitive analysis to make your brand remain on top of the food chain.
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