Why Competitive Analysis Matters
In the digital age, it is critical for a business to understand what their competitors are doing, and leverage that information to create success for themselves. In this blog post, we will discuss why you should be performing competitive analysis in order to succeed in 2021. Many business-minded people know that competitive analysis is a process that has been around for decades and continues to play an important role when it comes to the success of your business.
Competitive Analysis helps create a better understanding of how your competitors market themselves and what type of messaging resonates with their audience, which can help shape your own strategy and drive more conversions for your business.
What is Competitive Analysis?
Competitive Analysis is the process of observing how your company stacks up against its competition through data collection, trend identification, paid advertising, etc. It helps you answer questions like "who are my top competitors?" or "what are they doing that I'm not?" A simple competitive analysis framework could look something like this:
Identify Key Competitors in Your Industry
Benchmark Their Social Media & Key Takeaways
Benchmark Their Paid Ads & Key Takeaways
Benchmark Organic Performance (SEO & SERPs) & Key Takeaways
Identifying Key Competitors
If you don’t know who you’re competing with, how are you going to know how to beat them? The first step is to figure out who is doing well in your industry and area. A simple Google search can help you build a list of viable competitors to spy on.
Social Media Strategy
Next, after you have identified your main competitors, you need to take a deep dive into their social media channels. This includes platforms like Facebook, Instagram, LinkedIn, Twitter, TikTok, etc.
Keep in mind that for some businesses it only makes sense to be on certain social channels due to their target audiences. However, in 2021 lots of brands and companies are making huge gains in brand awareness by publishing content on platforms like TikTok, that previously didn’t seem to align to either the brand’s identity or target audience.
Paid Advertising Strategy
After you have taken a peek at your top competitor’s social media, you need to take a look to see if they are putting any money behind these posts or if they’re putting any money into adspend on search engines like Google, Bing, Duckduckgo, etc. If you haven’t spent money on advertising before, it can be a tad bit daunting because you want to guarantee your return on investment. However, a competitive analysis can provide you with peace of mind that you are making the right choice if you see that your competitors are shelling out stacks to reach new potential customers. Keep in mind that in some industries these days the paid advertising space is highly competitive, meaning that you have to pay to play, and the tab can get expensive very quickly.
If paid advertising is too rich for your blood - your best option for gaining a foothold against your competition is your business’s organic presence. When I talk about organic presence I’m talking about everywhere your business is listed on the web. From your website to online business directories, and even your Google My Business page. Look at your competitor’s websites, see what keywords they’re targeting, what metadata is on their pages, where their pages are ranking organically on SERPs, how often their website is being reindexed due to new data being uploaded, etc. This will provide you with insight into possible opportunities to outperform your competitors on the internet. SEO is more of a long-term strategy that demands constant attention. I say this so that you don’t think improving your SEO will give you guaranteed results overnight. It takes time and is best paired with a paid ad strategy. Together, SMM & SEO work as a double-edged sword to slice through the competition. Want to learn more about SEO? Check out one of my other articles: What’s What in SEO - The Basics
The SWOT analysis has been around since the 1960s when Albert Humphrey created the framework at the Stanford Research Institute. I personally like to use the SWOT analysis framework to tie up a competitive analysis.
For those of you who aren’t familiar with this tool, SWOT stands for:
S - Strengths
W - Weaknesses
O - Opportunities
T - Threats
To ensure that you are getting the most out of your SWOT analysis, you really need to make sure you are asking yourself the right questions. Below, I have provided you with some that I tend to use. Strengths (Internal Factors / Positive Influences)
Things your company does well
Qualities that separate you from your competitors
Internal resources - such as skilled, knowledgeable staff
Tangible assets - such as IP, technology, etc.
Weaknesses (External Factors / Positive Influences)
Things your company lacks
Things your competitors do better than you
Unclear unique selling proposition
Opportunities (Internal Factors / Negative Influences)
Underserved markets for your product/service
Possible emerging needs for your product/service
Press/media coverage of your company
Few competitors in your market
Threats (External Factors / Negative Influences)
Changes in regulation
Negative press/media coverage
Changing customer attitudes towards product/service
Why Does Competitive Analysis Matter?
Competitive Analysis is an often overlooked step in digital marketing because many marketers are solely focused on attracting traffic without considering what happens once they get there
Sadly these days it's not as simple as “build it and they will come.”
The truth is that there is a multitude of factors that go into why a potential consumer will choose your product or service over your competition. It is your job as a marketer to control those factors as best as you can to increase your chances of a potential sale.
Helps Create Benchmark “Goals”
Competitive analysis helps create goals for businesses based on the insight they gain through an understanding of what other competing companies are doing. Competitive Analysis can be performed in many different ways, including direct observation; customer surveys; competitor research; and analysis of market research.
Competitive Analysis is a crucial part of Digital Marketing nowadays because one of the main ways to gain true insights into how your competitor operates is through their social media channels - which is something every successful company utilizes these days.
Provides Insight to Industries at a Local Level
Whether you're a large company or a small business - it is vital to have your finger on the pulse of what your rivals are doing in the shared communities around you. If you can't beat out your competition at a local level - you most likely aren't going to be able to drive sufficient demand to grow that business larger. Therefore your chances of successfully scaling that product or service are slim to none if you can’t crack the code at a local level.
Helps Create a Foundation to Beat Your Competition
After you have completed your competitive analysis you should have all the ingredients you need to craft a recipe to crush your competition.
Competitive analysis provides insight into your competition's strengths and weaknesses so that you can capitalize on opportunities and minimize threats. Competitive analysis also allows you to stay one step ahead of your competition by understanding trends in the industry before they happen. That is just one of the many reasons it should be part of every company's marketing strategy.
HIFIVE - Your Digital Marketing Experts
Here at HIFIVE, before we onboard a potential client, we run an internal competitive analysis to see if it is even beneficial for both us, and the potential client to work together. Even though we consider HIFIVE to be an advertising or marketing agency - we are essentially a “digital consulting agency” because we find problems or gaps in companies existing digital marketing plans and provide/implement solutions for those issues that we find.
If you or someone you know owns or operates a business that needs help with photo/video content creation for social channels, SEO/SERPs website help or anything else that revolves around the internet and your business - reach out to us today to discuss your current struggles and how HIFIVE can turn those struggles into strengths to take your business to the next level.