When was the last time you did a competitor analysis?
Scratch that… have you ever done a competitor analysis?
It’s very common for small businesses to not know who they are competing with. However, if you are serious about scaling your business and want to win more sales in your target market – you need a game plan of how to position your brand as the preferred option among competitors.
85 percent of consumers conduct online research before making a purchase online
When your customers go searching for a solution, don’t you want to stand out from the crowd?
That’s where positioning comes in, and competitor analysis will help you create a strategy that’s sure to turn a few heads.
What is competitor analysis?
Competitor analysis is the investigation of other businesses that offer the same or similar solution for your target market. It’s the process of analysing the strengths and weaknesses of these businesses and comparing them to your own. Competitor analysis allows you to gain important insight to help you position and grow your brand.
Why is competitor landscape analysis important?
Competitor analysis or competitor landscape analysis is important to inform your strategies on how to:
- grow your business
- make better products and design better services
- communicate clearly with your customers
- remain the top choice for your customers
- build your brand equity
- differentiate your brand as unique
- stay on top of market shifts
- pivot faster when the market and customer needs change
Competitor analysis not only informs you of who else might be serving your customers, it also allows you to understand how your customers search for solutions and make comparable decisions between choosing your product or someone else’s.
By understanding the competitive landscape you’ll identify whether you are dealing with selective or primary demand, which can greatly impact your marketing and brand positioning strategy.
Difference between selective and primary demand
The difference between selective and primary demand can help determine the type of marketing decisions and messaging you place in front of your target market.
Selective demand
Selective demand is where the customer understands they have a problem and they decide to select a product or service to solve their problem. This is the case with highly competitive markets where there are many options for one type of solution. If your solution sits within a selective demand market, you might want to look closely at your competitors to make sure you are differentiating and offering more value to the customers making their selection.
Primary demand
Primary demand is where customers do not recognise they have a problem that can be solved for them. This is often the case with new products or services that do not already exist in the market. Messaging can be focused around educating the market about your new solution. Highlighting the problem they might not know can be solved with your one-of-a-kind solutions on the market.
How to differentiate your brand
Once you have a solid understanding of your competitive landscape and their strengths and weaknesses in comparison to yours. You can begin to start building your differentiation strategy or brand positioning strategy.
Conduct a competitor analysis
Researching your competitors will help you understand where you sit in the minds of your customers. You wil gain an understanding of what you offer your customers that no one else in the market can. Then using this as your unique selling proposition, you can differentiate your solution as bringing more value to your target market. Read more about how to conduct a competitor analysis.
Leverage your unique selling proposition
No one can build the brand you have set out to create, just like people, we are all unique and there are no two alike. If you have a thorough understanding of your customers needs and wants, use your unique-ness to offer them more value. While there may be similarities in your branding, language and pricing, the key here is to position your brand as different and offer something that your competitors simply cannot.
Highlight your competitive advantage
Don’t be shy to shout about your advantages over your competitors, chances are your customers have done their research online and will be comparing your solution against theirs. Make your advantage known, talk about it on your homepage, on your landing pages, on your social media and in your emails. And, like anything – test, measure, and try again.
Remain the top choice for your customers
Competitor analysis can be a daunting task if you’re a small business owner, entrepreneuer or an marketing team of one. However, it’s a key part of your growth strategy and something you need to stay on top of if you want to remain the best choice for your customers. You will need to constantly position your solution as the better choice in the eyes of your customer. Now how can you do that without monitoring what they are finding online so you can position your brand as more desirable?
When asking yourself how often you should review your competitors, best practice says quarterly, if not monthly if you have the time. However, it’s wise to not dwell on the competition too much. Focus on what you can control, your brand and meeting your customers needs.
Don’t know where to begin?
This simple 6-step guide to competitor analysis will get you started!
I’ve worked with companies in both start-up and scale-up phases. I love helping new small businesses make sense of marketing fundamentals and empowering them to take their business growth into their own hands. Confidently scaling their businesses. Read more insights here. Subscribe to the Mood Marketing newsletter to receive insights direct to your inbox.