The importance of competitor analysis is in what you can get from it: inspiration and insight. The role of competitor analysis in your marketing agency is as a guiding hand in areas where you don’t have enough experience. You should be using competitor analysis to give you some insight when you’re trying something new, whether that’s a whole platform or a single feature.
Before you can perform a competitor analysis, you need to understand whom you’re competing with and how. You need to create a clear definition of your brand and how you want to fit into the market. Just being a social media marketing agency isn’t good enough. Know what you’re offering, and what makes your brand, your brand.
Then, you can use the huge variety of online tools that are available to look at who and what your competitors are. First, you want to know who else is in the space and what role they fill. Determine who the high-end brands are, and who the absolute premium brands are. Figure out who’s the cheapest, or who’s the standard.
Look at what they’re doing with their marketing. Use tools to help you figure out what’s working for them and how well, and see if there’s a way to copy it. Look at what isn’t working for them, and look for ways to make it work. Most importantly, look for holes in the market you can fill.
You should not understate the importance of competitor analysis, because it’s how you determine how you’re going to fit in. Don’t look at your competitors to figure out how you’re going to be like them, figure out how you’re going to be different from them. The role of competitor analysis is huge in creating a unique brand.
The Importance of Analysis for your Agency
Before we talk about competitor analysis specifically, I want to talk about the importance of analysis in general. When you are analyzing a business, you’re doing a deep dive on how the business functions, and how well it’s functioning. Competitor analysis is actually the easier kind of analysis for a lot of people because there’s some emotional removal.
But it’s important to take a step back and look at your business objectively. Using tools like Google Analytics and Facebook Business Manager to read the data on your business is very important. Google Analytics shows you how many people are interacting with your website, and how they’re interacting – what pages they’re looking at and information like that.
Facebook Business Manager does a similar job with your Facebook page and ads. You can take the data from Facebook Business Manager and use it to guide what you’ll do in the future. Tools like this exist for every social media platform, helping you learn about your business.
Analysis lets you know, factually, how you’re doing. But some emotional analysis is good, too. Read qualitative data – comments and emails – to see if people are understanding the message that you’re trying to get across.
What is Competitor Analysis?
If you understand the importance of analysis, you can understand the importance of competitor analysis. The role of competitor analysis is actually pretty similar, but with an “inside looking outside” sort of view. You want to look out of your business to see what the big picture is.
The questions that you’re trying to answer with competitor analysis start with determining who your competitors are. Who are they, and what do they sell? Your competitors aren’t necessarily selling all the same stuff as you – maybe they offer different services. That’s still good to know.
Then, look at the strategies that they’ve used and are using. Look at what they’re posting now, what they were posting. Search out ads that they’ve run. How are those strategies working for them? Some tools we’ll talk about below are helpful here.
Once you’ve done that, you can figure out two things: what dangers exist, and what opportunities exist? There are going to be areas you just can’t win. And there are also going to be areas that no one else can beat you in. Knowing both of those areas is how you succeed.
Is It Just Spying?
A lot of people shy away from competitor analysis because it’s similar to spying. While the role of competitor analysis is similar to espionage, it isn’t really spying. If you were talking to other businesses employees maybe, but you’re looking at public information.
And your competitors are doing it, too. It’s a good practice that almost every entrepreneur will do, and there’s no reason not to. If your competitors aren’t doing it to you, it’s because they don’t see you as a competitor.
How to Do Competitor Analysis Online
As I said before, you need to do some prep work before you can get going with competitor analysis. First, you need to understand the role of your company in the market. Before you get too deep, define your company and your services. Figure out what you want to offer, at what price, and what your message is going to be.
Then, you need to create a competitor profile template. Build a document with all the questions you need answers to. Fields you’ll want to include are the company name, revenue, pricing, customer demographic, company size, and market share. Consider scoring them on brand awareness, customer experience, product quality, strategy execution, and anything else you might want to know.
As you go through, flesh out this template to go a bit deeper on what’s relevant. Make notes on strategies and ideas they’re using, and get more exact with their customers.
Then, You’ll want to use whatever tools you like to perform the analysis. Different tools can help you with every aspect of competitor analysis. When it comes to more general ideas like the market share and demographic, it’s hard to find data and tools for that. Unless you’re competing with Fortune 500 companies, you’ll need to get resourceful. But, you can glean a lot of this from your other research.
SEO research is pretty easy because you can use Google for it. But other tools include things like Google Trends, which will show you what people are searching for and how’s ranking for it. Yoast SEO will show you how well optimized the competitor blogs are, and Google Page Speed Insights can show you how optimized the site is. Moz and Penguin 4.0 can help with keyword and backlink research.
Social media is also your best tools for analyzing social media. There are a wealth of tools for this, though – and I wrote about the best free social media monitoring tools earlier this year. I highly suggest Sprout Social for this, as well, as it can show you your analytics as well as a deep look into competitors.
The Value of Competitive Research In Setting Yourself Apart
The major role of competitor analysis is to give you the ability to set yourself apart. Once you’ve learned what your competitors are doing, you can build the difference into your business. Focus on what makes you different in your marketing, and sell the benefits of that difference. You’re not playing zero-sum with your competitors – you can both have customers – so it’s better to be laser-focused on the customers your business is built for.
Your value proposition can be greatly improved by knowing how you fit, and that’s the importance of competitor analysis. Know who’s around you, so you can figure out how to stand out. If you start out this way, it will make the entire process much easier.