The best way to build a marketing strategy that stands out from the competition is to understand what your competitors are doing. Conducting a competitor analysis gives you and your clients the insight needed to develop digital marketing that delivers results. As an agency, you want to help your clients set themselves apart.
It’s easy for brands to get lost in a sea of almost-identical websites and brand identities in the digital space. As you help clients build their digital marketing strategy, you’re teaching them not only to look at their tactics and approaches, but also to develop a good sense of what is going on in their target market.
What Is Competitor Analysis and Why Does it Matter?
Competitor analysis is the process of looking at the visual identity, digital presence and marketing tactics of businesses that compete with you. It’s more than just taking a glance at their homepage and jotting down a few notes, however — you need to dive deeper than that.
At its core, competitor analysis helps one business differentiate itself from others in your industry. For instance, if you work in the financial or legal space, you might notice the frequent use of navy blue in logos. Using a contrasting color, such as orange or a bright green, might instantly set a brand identity apart from the rest.
A competitor analysis gives your clients insights into the tactics that competitors are using. They’ll learn what channels they’re present on, what messaging they’re using on those channels and where they place the bulk of their marketing budget. Without this insight, your clients are flying blind and might make major missteps when marketing a product.
As an agency, conducting a competitor analysis puts you right in the middle of your clients’ industries. You might not be an expert in the technical side of their products and services, but you are an expert in digital marketing.
By seeing how competitors employ the tactics you’re familiar with to discuss the products they offer, you’ll get the best sense of how you can apply your expertise and help your clients get the results they need.
How Do I Complete a Competitor Analysis?
There are a few key areas you should look at when conducting a detailed competitor analysis. We’ve broken them down into six steps; you can apply all of them to your own business, as well as put them to work for your clients.
1. Begin With Your Own Business
Whether you’re conducting an analysis on behalf of a client or for your own business, you need to know where you stand and what you’re getting yourself into before you start looking at the competition. By looking at yourself first, you’ll be able to identify areas you need to pay particular attention to when looking at your competitors.
If you’ve been in marketing for any period of time, you’re probably familiar with SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Identifying points in each of these areas can help you gain competitive footing. When looking at strengths and weaknesses, pay attention to specific items that are internal to your business, such as your pricing, your team, your service model and your company culture.
Opportunities and threats, on the other hand, are more specific to external circumstances you can’t control. These might include items like an underserved market segment, emerging changes in the industry or overall economic issues that impact your business.
2. Identify Your Competitors
Once you’ve started to paint the picture of your own business, you need to figure out who is capturing the customers you’re looking to target. List those you know about — there’s a decent chance that some of your current customers came to you from their business; alternatively, you may have lost some customers to them.
Conduct some basic searches that your customers might do on social media and Google. Type in search queries related to your business, products and services. Google your business name and the names of competitive businesses — if any other competitors you might not be aware of are using conquesting tactics, they’ll appear in these searches.
“Conquesting” is when a business tries to grab a competitor’s customers or audience. One way of conquesting comes from search ads. For example, Amazon does this by placing its own private labels sponsoring ad placements on top of other brands’ own search results.
3. Rank the Competition
Once you’ve identified your competitors, divide them into more manageable segments by order of importance and how relevant they are. There are three categories you should be concerned with:
- Primary competition: These are direct competitors for your specific products or services who are targeting your ideal audience. For example, if you are looking to market Nike sneakers, Adidas and Puma would likely top the list of primary competitors.
- Secondary competition: They offer similar products and services but might target a different audience segment. They might offer products in a different price bracket (either more bargain-driven or luxury-driven), making them indirect competition. However, the idea of someone switching over to your brand from secondary competition isn’t totally out of the realm of possibility. Secondary competitors for Nike shoes might include Reebok, Skechers and Vans.
- Tertiary competition: Includes businesses that are indirectly competing with yours or offer complementary products. These might be more on-trend or they might differentiate messaging or targeting so much that they no longer become direct competitors. For instance, Lululemon and Under Armour would likely be on the list of tertiary competitors for Nike.
4. Assess Competitive Brand Identities
To start truly analyzing your competitors, begin with the fundamentals. Take a look at their website, ads and social media presence — specifically their visuals and tone.
For example, find out:
- What kinds of fonts are they using?
- What colors do they feature?
- Do they use photography, or rely more heavily on illustration?
- Is their voice more approachable or authoritative?
- Are they more traditional or modern?
Just like you’d dress well for a job interview to fit in among other candidates, you want to make sure that the brand identity is in the right realm compared to similar products and services. That said, you don’t want to look identical — don’t be afraid to add your unique flair to your visual identity to set yourself apart from your competitors.
5. Audit Competitor Digital Tactics
At this point, you aren’t just figuring out who your competition looks like. You need to understand what they’re doing to set their brand apart and market their services. Note whether they employ any of the following tactics:
- Blogging and content marketing: Look at their website for a blog and see whether they’re sharing regular, timely content. Have they made any other resources, such as whitepapers or infographics, available for download?
- Email marketing: Do they ask for your email address anywhere on their site? Don’t be afraid to sign up and see what you get — the best way to assess email marketing is to actually receive the emails, getting a sense of both messaging and frequency.
- Organic social media: Take a look at the competitor’s social media presence. What outlets are they on, and how frequently do they post on each channel? What types of content appear to be performing best?
- Paid social media: Facebook and LinkedIn both make brand ads publicly available. If a business advertises on LinkedIn, these ads will appear in the left-hand column on their business page and show you a feed of all the ads currently running. If you want to check Facebook or Instagram, you’ll need to search the business on Facebook Ad Library, which will give you the full picture of current and past campaigns.
- Retargeting: Chances are, once you’ve spent any time on a business’s website, you’re likely to start getting served retargeting banner ads. Snap a screenshot as part of your competitive analysis. If you aren’t getting served retargeting ads, it’s unlikely that the competitor is using this tactic.
6. Look at Company Culture
It’s not just enough to assess a company’s products and services — you also want to know how they treat their customers and employees. Millennial and Gen Z customers in particular are concerned with buying from brands that align with their personal values, so it becomes critical to deliver a values-driven message.
Start by looking at the “About” page on the brand’s website. They’ll likely list a bit about their history, their mission and their vision. Note of these points and how they align (or don’t align) with your values.
Check out reviews on Facebook, Google and Yelp. This gives you a sense not only of how a brand presents itself, but also how it is perceived by the market. You can potentially identify opportunities to set your product and service apart based on the information contained in negative reviews.
Last but not least, check out the company’s Careers page and current job openings. How do they speak about their internal culture? What benefits do they offer employees? How do they speak about their goals for company growth, career development and culture in this specific context?
What Are the Disadvantages of Competitor Analysis?
While competitor analysis is widely accepted as a critical part of business strategy, especially when it comes to digital marketing. That said, like all things, there are downsides and criticisms of competitor analysis as a strategy tool.
If you’re conducting competitor analysis on behalf of a client as a marketing agency, you may become the bearer of bad news. If your agency is on an hourly pricing model, your clients might get sticker shock at the amount of time it takes to conduct a detailed competitor analysis to inform brand positioning. In some cases, a detailed dive into the competition can be overwhelming or even discouraging for clients. They might become extremely focused on competitive information and lose sight of their own tactics, or feel it’s not worth attempting to compete when they see just how much others are doing.
Some agency clients, especially those that might not have experienced digital marketers on their in-house team, may ask, “Well, our biggest competitor is doing X, why don’t we just do the same thing?” They might feel that competitor analysis is providing the “magic formula” for success and that they need to mirror what others are doing.
That simply isn’t the case — the purpose of competitor analysis is equally about ensuring a consistent presence and identifying opportunities to differentiate your brand presence and digital marketing strategy. The aim is to be different, not to follow directly in the footsteps of competitors.
Lastly, some critics of competitive analysis point out that too much emphasis on the competition can lead to a reactionary mindset rather than a strategic one. It’s easy for brands to see something on a competitor’s website or social media and feel the need to “one-up” what they’re doing, or do something similar.
The emphasis, however, needs to remain not on specific individual competitors and campaigns, but rather on the industry as a whole. Don’t let the current climate cloud the forward-thinking mindset that your digital marketing strategy needs to take.
Putting the Competitor Analysis to Work
Once you have completed a competitor analysis, take the information you learned and apply it. It’s easy to hand off a document or presentation deck that you worked on for days, only to have it sit in an email inbox collecting virtual dust.
Based on competitor tactics and identities, make suggestions for ways to differentiate brand positioning while remaining present on the channels where competitors are successfully reaching your target audience.
If you’re a B2C brand working on an eCommerce platform and targeting younger customers, you’ll likely emphasize making sure that your social media presence is up to par with the competition.
If you’re working with a B2B brand on a more high-consideration product or service, you’ll probably want to focus on content marketing and email campaigns that tell your brand story as it relates to competitors.
As part of your competitor analysis for agency clients, ensure you include the next steps. You’ll need a follow-up conversation to discuss digital marketing tactics and putting a plan into action, but you should take the competitor analysis as an opportunity to start this conversation at a high level. It’s even worth including additional SWOT points at the end of the presentation based on what you’ve learned from your detailed study of the competition.
Like all things digital, the competitive landscape is constantly shifting. You will likely want to revisit the competitor analysis annually — likely in late Q4 or early in Q1 as you begin planning your strategy.
Turning Competitor Analysis into Digital Marketing Results
Once you’ve presented the competitive landscape and identified digital marketing tactics that your client needs to employ, you’ll need to put them into action. A centralized digital marketing platform fueled by automation can help you do just that.
SharpSpring’s digital marketing platform is built with agencies in mind. It focuses heavily on giving you the tools and insights you need to manage multiple clients, implement campaigns and share insights. You’ll be able to conduct some ongoing aspects of competitor analysis, such as social listening, directly within the SharpSpring platform. You’ll also have the power of built-in analytics to adjust tactics as you go.
If you’re ready to take competitor analysis to the next level and give your clients the best possible results, bring it all together with SharpSpring. For more on competitor analysis, contact us or get a demo.
Originally published on the SharpSpring blog
My Left Foot is a Gold Certified SharpSpring partner.