Conducting a competitive analysis is probably one of the most important reports you should spend time doing for your business. It’s time well spent in knowing your competition.
Why you should know your competition
The main reason is that clients now have quick access to your competitors’ perceived or actual product/service benefits. The second reason is that you may be promoting a specific product feature or an internal human factor like customer service as your key brand differentiation – which, depending on how competitive your industry is, could not be enough to make the sale.
The third reason is that the consumer has changed. We’ve changed. We want choices, and we’ll search online to get them. Even a new advertising or social media campaign can change your customers’ minds, and they move to your competition.
Online tracking makes it easier to know your competition
On the upside of things, as someone in marketing, it has gotten easier to read the competition thanks to the Internet. Granted, you may not know about an upcoming advertising campaign from your competition, but what competitor tracking will do is help you understand the current industry environment. But you’ll need to know what you are looking at to build a marketing plan, and it starts by creating a competitive analysis spreadsheet.
How to analyze and report
What you are looking for is the ability to understand what’s next. You should be asking questions such as, “what will be your competitor’s next move? What type of skill set do they have that I’ll need that will help my company grow?
Take your time to develop these questions as it will in the analysis phase.
The next area to track is how you compare against your direct competitors based on actual product features and clients’ perceptions of your product and your competition. Ideally, create an excel with a list of products and services your competition has and compare with your company’s offering. Look for gaps.
You can discover competitive gaps and opportunities from products, marketing or sales, brand strength, client perceptions and other staff, like finance or operations.
Below are the major factors you should be tracking either weekly, monthly or daily depending on your industry. These factors include financial stability, type of clients, marketing investment, staffing, product and service offering and brand positioning and messaging.
Competitive analysis includes the following:
- Who are your direct and indirect competitors
- Understand the threat of substitution
- What is the ease of market entry
- Supplier Power
- Buyer Power
At the start, create an excel template listing the top 5 to 10 factors, benefits and features your customers believe to be important and are factors for your company’s success.
You’ll need to set at least 10 hours a week to stay on top of your competitive reporting; it comes with a lot of reading competitor’s annual reports, press releases, product brochures, patent applications and much, much more!
Also, you’ll need to travel to trade shows, check out how the competition presents their brand, attend all seminars and speak with the trade show organizers – the good ones will have a vibe on the industry’s outlook based on exhibitors and attendees comments, attendance and promotional programs.
LOOK IN / LOOK OUT TO UNDERSTAND YOUR COMPETITOR
I like doing a competitive analysis. It allows me to understand clearly my company’s position in the industry, as well as my company’s strengths and weakness. During a competitive analysis, you need to remove any bias. You need to think analytical because you won’t be doing your company any favours by listing brand strengths that are still not developed. Also, brand strengths need to be relevant since you’ll be using these strengths to create a truly unique brand message that is relevant to your target market.
REAL BENEFITS IN COMPETITIVE ANALYSIS?
Yes! It will help you formulate the marketing strategy, discover opportunities in new markets or product development and create a unique brand message that will help you stand apart from your competitors.
DEALING WITH UNKNOWNS
My biggest frustration is when I read posts that insist that you can know your competitor’s marketing strategy by reading a press release. By the time you’ve read the press release, it’s too late. You are in reactive move.
However, you can find out a lot from a public company from their annual shareholder report, especially in which product saw growth, which markets they are focusing on and why they’ve spent so much money. Here is a list on how to track your competition:
- Subscribe to their newsletter
- Speak with your salespeople
- Speak with your client/customers
- Track lost sales and find out why they chose to go with the competition.
- Understand your market trends and political environment
- Be curious, don’t accept the status quo.
- Visit trade shows, speak with the competition.
- Follow them on social media.
- Visit their website – often.
- Write up a monthly report. It will help to see changes before it comes to a full-blown problem.
The second area is sales forecasting. There are two types of sales forecasting, a) when you’ve just launched a business and need to know your cash flow and b) when you’ve been in business for a few years and need to know how much sales you need to stay profitable.
The idea that you can track your competitive and help you with your sales forecast is naïve. It will only help you understand how much work, like marketing, promotion, sales, and product development you need to do if you plan on entering ‘their territory.’
Or, it will help you determine whether you should enter their landscape, or not and go somewhere else.
NOTE: As much I appreciate the importance of a monthly competitive analysis report, I also know that things can happen quickly. You get a big client win, or overnight a competitor enters your niche market, or there a new product introduction that caught you by surprise and changes the market space. It happens. No matter how much competitive tracking you are doing. It what makes the business so exciting.
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