As a business owner or marketing director, you want your business to grow. It can be tempting to go it alone, especially if your business is new!
However, it’s a little-known fact that getting to know your competitors and their methods is essential to growing as a company.
How? Let’s check out why competitor analysis is important, and how to begin.
Why Should You Know Your Competitors?
It’s easy to underestimate the importance of knowing your competitors. By now, you likely have ample input from your co-workers and reviews from your customers. You may think that worrying about what your competitors are doing could distract you from carving out your own space in the industry. However, it’s important to remember:
Competitor analysis is not a distraction.
Instead, knowing your competitors and comparing their methods to your own can help you better shape your business. By using them as a reference, you will clearly understand your place within the industry – and then carve out an even more unique space!
How Well Do You Know Your Competitors?
Now that you understand the importance of knowing your competitors, let’s talk about how to get to know them.
Here are some questions to consider:
- Who are your competitors in the industry?
- What products and services are they offering?
- How are these products and services similar to and different from yours?
- What marketing methods are they currently using?
- What marketing methods have they used in the past, but discontinued?
- Who are the target audiences that they are marketing to?
- What needs do your competitors’ products and services meet for their audience?
- What kinds of reviews are your competitors’ customers leaving on their websites?
Who Are Your Competitors?
Let’s focus for a moment on that first question: who are your competitors? You only have so much time and resources to devote to competitor analysis, so it’s important to narrow the field. How?
Choose the most relevant competitors.
These competitors are businesses in the same industry as yours. They offer products and services that are similar or related to yours. Additionally, they focus on clients similar to your target audience.
However, if you have the time, there are merits to considering businesses that you, at first glance, don’t appear to have much in common with. These are companies with different products and who target different audiences.
Through these companies, you may discover ways to expand your business – adding new services to your repertoire and finding new audiences you never considered marketing to previously!
Your Competitors’ Strengths and Weaknesses
As you get to know your competitors, create a list of their strengths and weaknesses. This can help you better learn from their mistakes, and emulate their good strategies.
In what ways are your competitors succeeding? What marketing methods brought them the biggest increase in profits? Which social media posts of theirs have received the most likes and shares?
Knowing your competitors’ strengths can help you identify threats in the industry, as well as opportunities for you to adopt effective techniques.
In what ways are your competitors failing? What marketing methods have they used or services they provided in the past, but since discarded? What potential target audiences are they ignoring?
Competitor analysis allows you to learn from your competitors’ mistakes, so you can avoid making those mistakes yourself.
When you know your competitors, you are better equipped to shape the future of your company.