What is Competitive Analysis?

Competitive or competitor analysis involves identifying and evaluating your business competitors to gain valuable insights into their strengths, weaknesses, strategies, and market positions. This strategy allows companies to make knowledgeable decisions, improve their products, and stay competitive within their sector.

A well-executed competitive analysis provides insights into:

  1. Your competitors’ products or services
  2. Market trends and opportunities
  3. Differentiation points and gaps in the market
  4. Strategies to refine your value proposition

How to Conduct a Competitor Analysis

Here’s a step-by-step guide to performing an effective competitive analysis:

Identify Your Competitors

  1. Direct Competitors: Businesses offering similar products or services to the same target audience.
  2. Indirect Competitors: Companies that meet the same customer needs differently.

Gather Information

There are many data points for assessment, but I would like to share a list of areas that can provide insights into a competitor’s health and identify gaps or opportunities. I have organized these data points by key categories to make the assessment easier.

Pricing and Sales Model

  1. Pricing Structure: Base prices, discounts, and subscription tiers.
  2. Bundling: Are products or services offered in packages?
  3. Sales Tactics: cold outreach (emails, calls), inbound marketing effectiveness, and demos or free trials.
  4. Payment Options: Credit cards, financing plans, buy-now-pay-later options.
  5. Sales Channels: Direct sales, third-party resellers, or partnerships.

Product or Service Features

  1. Core Features: Highlighted capabilities or functionalities.
  2. Customization Options: Is the offering adaptable to specific customer needs?
  3. Innovation: Unique or proprietary technologies.
  4. Ease of Use: User-friendly interfaces or workflows.
  5. Product Lifecycle: Frequency of updates or new product launches.
  6. Self-Service: Availability of tools for customers to manage their needs independently.

Customer Experience

  1. Onboarding Process: Ease of setup or implementation for new customers.
  2. Customer Support: Availability (24/7, business hours). Support channels (live chat, email, phone). Quality of help documentation or FAQs.
  3. Return/Refund Policy: Flexibility and conditions for returns or cancellations.

Marketing and Online Presence

  1. Website: Design and user experience. Speed and mobile-friendliness. Lead capture methods (pop-ups, forms, downloads).
  2. Social Media Presence: platforms used, content quality and frequency, and engagement levels (likes, shares, comments).
  3. SEO Performance: Keywords ranked.Domain authority. Organic traffic sources.
  4. Advertising Strategies: Ad platforms used (Google Ads, Facebook, LinkedIn). Targeting precision. Estimated ad spend.

Target Audience and Market Position

  1. Customer Segments: Demographics, psychographics, or industries served.
  2. Geographic Reach: Markets or regions targeted.
  3. Brand Positioning: Unique value proposition and market differentiation.
  4. Market Share: Relative size in the market.

Competitor Strengths and Weaknesses

  1. Strengths: Key areas where they outperform the competition.
  2. Weaknesses: Gaps or challenges they face in their offerings or operations.

Technology and Tools

  1. Technology Stack: Tools or platforms used for operations (e.g., CRM, analytics, AI).
  2. Automation: Degree of automation in customer service or product delivery.
  3. Integration: How well products integrate with other tools or platforms.

Differentiation Factors

  1. Eco-Friendly Practices: Sustainability initiatives or certifications.
  2. Community Engagement: Partnerships, sponsorships, or social responsibility campaigns.
  3. Exclusivity: Features, collaborations, or offerings competitors can’t replicate.

Industry Trends and Adaptability

  1. Trend Alignment: Are they capitalizing on emerging trends?
  2. Adaptability: How quickly they respond to shifts in the market or customer needs.
  3. Risk Factors: Vulnerabilities to economic or industry-specific downturns.

Develop Actionable Insights

This involves interpreting your findings and linking them to specific strategies or decisions.  Essentially, you condense that landscape research into key bullet points. You should also highlight how your current performance compares with competitors and provide actionable recommendations for each insight shared. For each insight, outline:

  • What must change (e.g., reduce pricing, launch a new feature)
  • How to implement it (e.g., offer discounts or train sales teams).

Online Tools to Support Competitor Analysis

SEO and Digital Marketing

  1. SEMrush or Ahrefs: Analyze competitors’ keyword strategies, backlinks, and search rankings. Discover high-performing content and untapped keyword opportunities.
  2. Google Trends: Monitor trending search queries and compare competitors’ visibility. Gain insights into seasonal or emerging interests.
  3. Moz: Evaluate competitors’ domain authority and SEO performance. Benchmark your SEO efforts against theirs.

Social Media and Content

  1. Hootsuite Insights or Sprout Social: Monitor competitors’ social media activities and audience engagement. Understand their content strategies and trending topics.
  2. BuzzSumo: Discover top-performing content in your industry and competitors’ most shared posts. Refine your content strategy to match or surpass theirs.

Customer Reviews and Feedback

  1. Trustpilot or G2: Gather customer feedback and ratings for competitors’ products or services. Identify areas where competitors excel or fail to meet customer expectations.
  2. Google Alerts: Track mentions of competitors online, including news or reviews. Stay updated on their latest developments.

Website Analysis

  1. SimilarWeb: Analyze competitors’ website traffic, audience demographics, and referral sources. Identify their top-performing channels and geographic reach.
  2. Hotjar or Crazy Egg: Assess user experience (e.g., heatmaps, click behaviour) on their website. Compare your UX with theirs and identify areas for improvement.

Best Practices for Conducting Competitor Analysis

  1. Focus on Actionable Insights: Avoid data overload. Concentrate on findings that can inform your business strategies.
  2. Keep It Regular: Conduct competitive analyses periodically to stay ahead of market changes.
  3. Use Visualization Tools: Tools like Excel or Tableau can help organize and present data for easier decision-making.
  4. Leverage Internal Teams: Collaborate with marketing, sales, and product development teams to validate findings.

Outsourcing a Competitive Analysis

Outsourcing a competitive audit can save time and provide expert insights, but selecting the right partner is critical to ensuring high-quality results. Although having your team conduct these audits is good practice, here’s some advice for outsourcing this research.

  1. Industry Knowledge: Ensure the vendor has experience in your industry or niche. Familiarity with industry-specific trends and competitors can significantly improve the analysis.
  2. Proven Track Record: Look for case studies, client testimonials, or portfolio examples of past competitive audits they’ve conducted.
  3. Specific Skills: Check if they have expertise in areas like SEO analysis, market research, pricing strategies, or consumer behaviour.
  4. Verify the parameters they will evaluate and ask how they gather data.
  5. Tools and Technology: Check their tools (e.g., SEMrush, SimilarWeb, BuzzSumo) to ensure they leverage robust platforms.
  6. References: Request references from past clients to verify their capabilities.
  7. Online Reviews: Check platforms like Clutch, Upwork, or LinkedIn for reviews or ratings.
  8. Awards or Certifications: Industry-recognized certifications can indicate credibility and expertise.

Their final output should include Key findings, visualizations (charts, graphs, and tables), actionable insights, and prioritized recommendations.

Competitor Analysis Template – Download Template

Here’s a free Google Sheet template. You can copy it and change the data columns to fit your business goals.