Competitor Analysis: Four Keys to Unlocking a Successful Strategy
A competitor analysis provides you with the knowledge to make an informed decision on what aspect of your company gives you a competitive edge.
Creating a PR or marketing plan without solid research on your competitors is like competing in a game without knowing the judging criteria.
The customer is your judge, and they have done their research. So should you.
Depending on your niche, professionals create different types of competitor analysis reports based on ratings and research.
Besides the basics, there are four stones that usually remain unturned in a competitor analysis. They are the keys to strong positioning, and should be a fundamental driving concept to your overall campaign.
Opposition to Benefit Ratio
Asking the basic competitor analysis questions are useless unless you know how to apply the knowledge. Finding the balance between your opposition in the industry, and where to find the highest return, is one of the most effective ways to create a strategy. Correlate where your competition is light – allowing you to pick the low hanging fruit - and you still could earn a return on investment (ROI).
Opposition-to-benefit ratio is a common sense formula. It keeps you grounded to reality, and what’s actually possible. This doesn’t mean don’t dream big, but you mustn’t miss the more obvious opportunities either.
Understand Your Vertical
Part of understanding where your company’s low hanging fruit grows is finding your vertical market. Vertical refers to the various niche markets surrounding your industry. For example, if you sell motion sensor water sprinklers, your horizontal competitors are other home and garden companies selling water sprinklers. Think in vertical terms, and you can narrow the competition by specializing in a particular niche, water sprinklers to keep animals out of your yard, for example. This presents your company with an entirely different target audience to pursue.
Explore the big picture marketplace for your products, and the competition in each niche. Layer this analysis over your ‘opposition-to-benefit ratio’ to find the highest ROI.
Behind the Scenes Look
Once you know your vertical, and where your low hanging fruit grows, it’s time to figure out how to beat your competitors. Open Site Explorer is a great resource to find out where your competitors are seen online. Simply type in your competitor’s URL to view what websites link back to their website. Odds are, if the blog or news site carried an article from your competition, they will accept one from you as well.
Knowing your competitors’ online activity gives you an upper hand in discovering their strategies and goals. If you see a competitor lowering their prices it might be a tactic to increase their market share. Keeping an eye on your competitors’ activities will help you anticipate their goals, and respond strategically.
Your competition’s fiscal performance only tells one side of the story. What’s behind their success or failure is what you need to find out. Studying a competitor’s shortcomings is just as important as knowing why they succeed. Your campaign must take into consideration both preventitive and proactive tactics.
Investigating customer reviews online, and comments on social media, creates a different approach to analyzing competitors, as well as your own SWOT analysis. Topsy is a free online tool to help you find keyword specific searches on various mediums in real time. See what’s trending about your competitor on the Internet, or read the tweets they were mentioned in. Consider gathering a good portion of your competitor analysis data on Twitter. This will help you better understand your competition in the eyes of your consumer.
I would love to hear your ideas on how to do a successful competitor analysis below. Do you have a tip or tool you use?
By Alicia Lawrence
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