The phrase “keep your friends close but your enemies closer” is just a dramatic way to say how important analyzing your competition is. While there are no direct enemies in business, there is no shortage of competition here. And competition is vital for growth too.
Understanding your competitors can take you quite far. Your competitor’s success and failure are great metrics to understand consumer sentiment and industry status. Businesses of all sizes need to incorporate competitive analysis in its strategy. It can vastly benefit lead generation, lead nurturing, and product development processes.
In this blog, let’s go over the many benefits of analyzing your competitors in depth.
Identify your real competitors.
The first benefit of a competitor analysis is understanding who you’re actually competing with. A good starting point is to gather information about similar businesses in your area. You should include all online and offline companies that offer your target market a similar product or experience.
The next step is to categorize companies by size, location, target audience, revenue generation, market penetration, product offerings, services, mode of operation, etc. The more categories you add, the better your analysis will be.
An example would be a local yoga studio looking to invest in analyzing its competition. They can start by classifying competing yoga studios into different categories. Some of these may be the number of guests, locations operated, customer profile, occupancy rates, fees charged, services offered, online or offline classes, etc.
Analyzing competition this way helps you :
- Know who to compete with now and in the years to come. Your objectives will get clear and more defined the more detailed your analysis is.
- Understanding who is not your competitor – which is essential data to have
- Position your product so that it appeals to your competitor’s customers too
A comprehensive competitor analysis can help your business effectively save time, money, and valuable resources with efficient targeting efforts.
Conduct a SWOT analysis efficiently.
A Strength, Weakness, Opportunities, and Threats (SWOT) analysis is a valuable tool in business studies. It helps a business find its current position and chart the best path ahead.
Analyzing your competitors to know their strengths and weaknesses gives your business perspective, which immensely helps the SWOT analysis. It makes the process easier by helping you learn from their successes, failures, and customer feedback. Knowing what they do and how they do it can help you define opportunities and threats for your business.
SWOT analysis needs a framework to be efficient and competitor analysis gives just that.
Improve positioning in the market with competitor analysis
Customers get their first impressions from what the brand and the market are saying about a product. So, it is crucial to say the right thing about your product to create the best brand positioning.
Deciding pricing, marketing campaigns, and other product marketing elements will determine if you reach your target market correctly. And you need data for this process to work the right way. But, data collection is a difficult process and that is why businesses need competitive analysis reports to make it easy.
When you analyze your competition in detail, it allows you to :
- Understand their brand positioning
- Identify gaps in pricing, supply, demand, and marketing in your industry
- Finetune your USP (Unique selling proposition) to attract customers
- Rebrand or reposition if an approach proves successful or unsuccessful for your competitors
- Establish a north star in the market to measure your productivity, success, and growth.
Build smarter branding and communication.
Communication sells products most of the time. If you can convince your customers that you are the right fit for them, your product will gain traction swiftly. Analyzing your competition can make that easy for you too.
Imagine if Microsoft and Apple didn’t have each other as competition. Would both brands be the industry’s leading choices in a competitive market today? No. It likely would have taken them years of marketing and intense product development to reach that stage.
With the knowledge of your real competitors and their market performance, it is easy to frame competitive marketing strategies.
If you are just starting a new business in your industry, then analyzing your competition can also help your branding. You can choose to be everything your competitor is not and make a bold statement from day one.
Your marketing and brand communication also instantly becomes smarter when you know what to say. When you analyze your competition before setting out marketing strategies, you can call out your competition and give customers everything the other brand isn’t delivering in the form of marketing blogs, exciting ad copies, and innovative campaigns.
Spot trends easily with competitor analysis
Imagine knowing what your customers want even before they realize it. Successful companies have dominated markets for years by figuring out what their customers want even before they know it themselves.
We call it “trend spotting.” You can use this to get ahead of your competitors and attract customers to your business before they take away the opportunity.
Analyzing your competitors is not a one-time activity but a continuous process. Competitor analysis for trend spotting is an ongoing process and businesses must stay alert and track marketing channels closely. The longer you collect insights from your competition, the more you learn about your competitor’s successes and shortcomings.
Closely monitoring your competition for an extended period can tell you what product, customer experience, and marketing trends immediately jump on.
Make competitive analysis efficient with Birdeye.
Success comes to those who persevere, especially those looking to level up in business. Your competitors are a valuable source of industry knowledge that gives you the confidence to move forward with your projects and course correct when necessary.
Use competitive analysis to your advantage, and you will continue to outshine the competition. The process of understanding your competitors is an exercise no business should skip.
One simple process can help you level up and unlock new growth potentials for your business.
Work with Birdeye to set up an automated and continuous monitoring system for your competitive analysis for an efficient and productive process.
Want to know more? Book a free demo now.