Today we dig into how to conduct a competitor analysis exercise, but first, a question:
Q: If a competitors’ ad campaign knocks it out of the park with a new audience segment, but you’re not around to hear it, does it still drive their new business?
A: Unfortunately, the answer is yes, and perhaps uncontestedly so.
It can be tempting to wholly focus on your business and internal efforts when strategizing marketing efforts — after all, you’re in the market to make a splash and be the best, not just copy what your competitors are doing — but operating in this way can be a costly misstep.
Some team members might argue that the time it takes to analyze even one market competitor is better spent focusing on your company and product.
The problem with this approach is that it assumes your audience is evaluating your solution in a vacuum. Even if you are genuinely a disruptor in your space, you’re still competing against perceived competitors who are after the same wallet/budget share as you.
Doing a competitor analysis exercise allows you to take a step back and evaluate the market as if a potential customer, giving you greater context as to how to position yourself in a way that cuts through the noise and gets at the heart of your selling proposition. Does your core messaging resonate, or does it get diluted in a sea of competitors who also list “quality” as their first company value?
Competitor research also allows you to benchmark your efforts against other players in your space and evaluate risk before launching a new channel or marketing to a new audience.
What is competitor analysis?
Competitor analysis is the exercise of gathering information about your competitors to get a better sense of your market and the competitive landscape. Once fully mapped out, teams can begin to unearth insights derived from collected data and use them to influence internal strategy changes and tactics.
The most comprehensive competitor analysis initiatives include a wide range of business categories that could impact many different departments within an organization. Sample categories include types of products, product features, pricing, positioning, ad campaigns, etc. For the purposes of this article, we will focus on analyzing competitors’ marketing presences.
How to identify a market competitor
First things first – are they realistic? To decide what competitors will be included in your competitive set, you need to outline them by type. There are three major competitor types: direct (realistic and aspirational), indirect, and perceived.
- Direct competitors: Companies that sell the same product or service in the same category as you (e.g. Chipotle and Qdoba).
- Realistic direct competitors: Those on par with you in geographic reach, employees, breadth of services, etc.
- Aspirational direct competitors: Leading companies in the space that can inspire marketing opportunities but that you don’t go head-to-head within sales conversations.
- Indirect competitors: Key players in your industry that sell the same product or service as you, but it is different enough to act as a substitute (e.g., Chipotle and Wendy’s).
- Perceived or replacement competitors: Businesses that sell a product or service that is different from yours, both in category and type, but one perceived by your audience as a replacement to spend their money (e.g., Chipotle and Hot Pockets).
How to conduct competitor analysis
You can do this in 3 simple steps. Ready?
Step 1: Identify who will be included in your competitor research
Before launching into this exercise, marketing teams make sure to speak with your Sales team first to identify the players you are constantly competing for head to head against. Who are you consistently losing deals to? Conversely, who are customers abandoning before switching over to your product? You’ll want to make sure these companies are included.
Once you have your list of competitors neatly filed into direct (realistic and aspirational), indirect, and perceived competitor categories, select anywhere from 2-4 realistic direct competitors and 1-2 aspirational direct competitors. This will give you a good base to benchmark yourself against and spark inspiration. You may also include 1-2 indirect or perceived competitors, making sure only to note relevant information to your business — more on that below.
Step 2: Identify areas of interest for your competitive analysis
Warning: If you do not approach your competitive analysis exercise focused on clearly defined goals, you will likely find yourself jumping from one rabbit hole into the next and with a wide tangle of observations at the end.
As mentioned earlier, competitor research can be conducted to influence a vast range of organizational departments and strategies, such as the products your company sells and how your pricing is structured, so clearly defining your goal(s) ahead of any competitor research is strongly recommended.
Below is a list of comparison categories that can impact your marketing strategy most:
- Messaging: Core messaging (e.g., mission statement, core values, value proposition), product or service features and differentiators, website copy, calls to action, etc.
- UX: Navigation elements, website structure, and interlinking, etc.
- Design: Fonts, brand colors, page layouts, CTA buttons, general styling, etc.
- Conversion Opportunities: Types of forms, live chat, support phone numbers, and email addresses, etc.
- SEO: On-page meta data (page titles, meta descriptions, image alt tags, etc.), backlinks, Google My Business property, top-ranking organic keywords, mobile and desktop speed performance, etc.
- Content: Asset types (e.g. case studies, catalogues, blog posts), content subjects/themes, publishing frequency, email signups/automations, etc.
- Organic Social Media: Number of followers, number of reviews, avg. review score, content types posted, post frequency, community engagement, post engagement (avg. number likes, comments, and reshares), etc.
- App store: organic profile screenshots, categories, keywords, etc.
- Partnerships: co-branded emails, webinars, landing pages, events, etc.
- Digital ads: Search, display, social media, app store, publications, event sponsorships, etc.
- Print ads: magazines, reports, etc.
- Event participation: events, attendance type (sponsor, exhibitor, floor), branded materials used, etc.
In addition to the categories listed above, you may also want to include the following if you are including any aspirational direct, indirect, or perceived competitors:
- Services / Products
- Organization size
Pick a handful of categories and sub-elements that most impact your marketing goal(s). If one of your goals is to increase new traffic to the website by 30% YoY, for example, you’ll want to dig into website SEO, content subjects/themes, publishing frequency, organic social media, partnerships, and advertising.
Step 3: Complete Your Competitive Matrix
Once you have your competitor list and comparison categories nailed down, you are ready to build out the document framework that will house all of your research and dive in. At TribalVision, we typically use Google Sheets when building a competitive matrix, placing competitor names in different columns along the top row and comparison categories down the first column.
Ensure you include your company as well so you can easily see a side-by-side comparison between how well your business is doing in any one of these categories compared to your competitive set.
If you include indirect or perceived competitors, distinguish them visually in a way that calls attention to them, like choosing a different cell background color or housing them in a separate tab. Make sure you are only gathering information that is relevant to your business’ marketing efforts (i.e. dig into the way they talk to customers in terms of tone, the types of asset formats they provide on their website, and length of blog posts vs. the specific features showcased for a product that you do not carry).
As you fill out your competitive matrix, you may find yourself noticing trends and formulating ideas as to how you can strategically react to the market intelligence gathered. Don’t just let those thoughts pass — make sure to leave yourself comments as you go. These will be very helpful once you’ve finished filling in the grid, and it’s time to take a step back to summarize your insights into critical takeaways.
To help you get started, here’s an example of a competitor analysis template.
How to Get the Most out of Your Competitor Analysis
If you’ve made it to the end of this article, chances are you don’t need to be convinced of the benefits of competitive analysis. This exercise will arm you with the information you need to uncover market trends, identify gaps in competitor practices and messaging, and make well-educated strategic marketing decisions for your business moving forward.
The first time you do this exercise, you’ll want to be focused on specific goals, but that is not to say the competitive matrix you create shouldn’t be a living, breathing document for future updates and reference. Decide with your team how often you will revisit and update the doc to ensure you stay up to speed on the latest trends and gaps in the market.
Oh, and one more thing before you go.
Free Competitor Research Tools
While social media platforms like Facebook and LinkedIn transparently show all of the ads a company is running right on the company’s profile for anyone to see, finding other data on competitors that are not public-facing via a website or social profiles can be a challenge. Luckily, several free or freemium tools can help you get a deeper understanding of what your competitors are doing behind the scenes. Check out some of our snooping strategies explored in our competitor research tools and tactics blog post and a handful of our recent favorite free tools listed below.
Google PageSpeed Insights (desktop and mobile website speed test)
Web Technology Surveys (overview of website technologies)
Meta Forensics (website architecture and SEO)
P.S. Have any of your favorite tools that aren’t included? Share this post on social media along with your favorite competitor spying tools. We’ll give you a shoutout and add it to our list!