Know the Enemy: The Purpose of Competitive Analysis
In strategy, doing a competitive analysis helps you get a better understanding of your niche market landscape. You do this to replicate and improve upon your competitors’ successes for your own brand and avoid their failures. It’s a lot of work to conduct analysis the right way and get the data you need to influence your own strategy. You might wonder why you need to put in the effort at all. Today, we’re discussing the purpose of competitive analysis and how it benefits your brand with topics like:
- What’s the Point of a Competitive Analysis?
- What Does Your Brand Get Out of a Competitive Analysis?
- How Do You Find the Right Competitors for Analysis?
What’s the Point of a Competitive Analysis?
The point of a competitive analysis is to compare your brand to others. The competitive analysis process highlights your rivals’ strengths and weaknesses. It also shows areas of your own business that are stellar or that need improvement. The process goes much deeper than an overview of your rivals’ websites and social media accounts. You also have to look into the brand’s history and background, discover who they think are their competitors, and review business factors like budget and growth.
In the end, you can look at what your company does well, or what a competitor does well, but that information and data are meaningless without comparison. Much of the work you do in marketing isn’t absolute. Instead, that work is relative to what’s going on in the market or the world around it. An analysis can show that your brand doesn’t have to be the best in the world to still grow and become successful. It just has to be better or more appealing than the other options available.
Without competition or a reason for clients and customers to draw comparisons, you wouldn’t need marketing or content. Customers that needed your product or service simply would make a purchase and you would rake in money. But that’s not how it works in the real world. And if sales were that easy, where would be the fun or challenge in doing business at all? The thrill and excitement of working in marketing and strategy come from trying new tactics based on data and finding out how that information helps your company see the rewards.
What Does Your Brand Get Out of a Competitive Analysis?
Image via Unsplash by @floschmaezz
The purpose of a competitive analysis is to better understand what your business enemies do right and wrong compared to your brand. But again, it goes deeper than the basic labeling of a “right” strategy or a “wrong” one. If this process was as simple as saying “that company’s approach was wrong,” everyone would do competitive analysis. But this kind of audit isn’t about passing judgment.
It’s about finding out what does and doesn’t work for a brand and why. The “why” factor makes this process worthwhile. When you find the “why,” you unlock the secrets of another brand’s success or failure. That knowledge leads to benefits for your own brand, such as:
Data-Backed Benchmarks
Benchmarks are reference points that help you measure business growth. You often find them by taking an extensive collection of data and finding averages for different metrics over a certain period. A common goal brands set when doing a competitive analysis is learning how successful other companies are so they can outdo their achievements. Benchmarks are a way to make that happen.
Let’s use social media metrics as an example. Hypothetically, your company just started its LinkedIn profile because most of your direct competitors run successful community spaces on the platform. Your goal isn’t just to have a presence on the platform, it’s to grow your community to be bigger and better than the others. You’re able to do this and track success by setting benchmarks.
By looking at statistics like your competitors’ engagement, post reach, and follower count, you can take all the data and find the average numbers for each metric or company. You could also combine the totals for multiple brands researched to get an overall average. When you’ll see is a set of benchmarks to reach with your own LinkedIn profile to prove it’s become successful. You can use these benchmarks as key performance indicators (KPIs) to track the success of each new LinkedIn campaign. Once you start hitting some of your benchmarks, you’ll know your presence on the platform is growing.
Gap Content Roadmap
Competitive analysis doesn’t just show you what your rivals do. It also highlights the things they don’t do. Or the things they’re doing with their content marketing that your brand doesn’t. We call these areas gaps, and when they’re specific to content marketing, we call them content gaps. Whether the competition covers a topic that your audience wants to explore and your company doesn’t, or you find an area that nobody covers, both become opportunities to provide value and put your brand on top.
With an industry-wide gap, your brand could become the first to cover a topic, setting it up as an instant thought leader and authority on the subject. With your own brand’s gap, you can take the topic you haven’t covered yet and work to make your contribution on the subject 10x better than what already exists. The more valuable your contribution, the more likely your content becomes the definitive source on the topic.
No matter which kinds of gaps your analysis reveals, their existence makes it easier for your editorial team to create a content plan that addresses the gaps and fills them with top-quality pieces.
Unique Selling Proposition
You probably already know, or think you know, your brand’s unique selling proposition (USP). But a competitive analysis helps reveal your rivals’ USPs and may influence a change in your own. A USP is the “why” factor that a client or customer uses to back up the decision to make a purchase. Despite what you might have heard, it’s not always the price of the product that helps you gain or lose customers. It’s the USP.
Let’s say you work for an acoustic guitar manufacturer. Your company’s most popular model sells for $200, and your closest competitor sells a comparable one for $250. For most people already willing to spend that much on an instrument, $50 won’t influence their decision. There are other factors at play that help them decide which model is the right one to buy. Those factors are each brand’s USP.
You can find your competitors’ USPs through an analysis of their marketing materials and website landing pages. What features or services do they highlight? Does your brand have or do something better? Maybe you find that the competition doesn’t have any famous clients, but your company’s model is the preferred instrument of a rising star in the music industry. That’s a USP that may encourage the musician’s fans to choose your brand over another.
Strategic Resource Allocation
Your brand has a finite number of resources available for marketing and content development. Whether that’s in your budget, your workforce, or another area of business doesn’t matter. Just because your brand has fewer resources than another, that doesn’t have to hinder its growth or success. The goal is to work smarter, not harder, by leveraging the resources you do have to the best of your abilities.
A competitive analysis shows your brand rivals’ strengths and where they’re currently outperforming your company. But the reasons they’re outperforming you may not always be because they have more money to spend or more content writers to develop more pieces. It might come from the ways they’re using those resources versus how your brand uses them.
By looking at how your rivals balance and leverage the resources available to them, such as social media channels or ad space, you can see where they’re putting the most time and effort. Then, you can see what kinds of rewards and benefits that strategy generates. You might find that you want to replicate a competitor’s strategy to bring your brand the same rewards. Or you might notice some gaps in their strategies that you can improve on and work more efficiently to get better results.
How Do You Find the Right Competitors for Analysis?
You’re only going to reap the true benefits of competitive analysis if you target the right brands in your research. Otherwise, there’s no point in going through the process. If you’re getting unhelpful data, you’re wasting your own time and resources working through the exercise. But when you know how to find the right competitors to target, you’re going to find connections and patterns. These links arise when you see what your business is doing in the current market and what it could do to be more effective and successful in the same space.
Remember, analysis is all about comparison. The longer you examine your business and another side-by-side, the more similarities and differences you see. To help you find the right competitors for analysis, look at the services each company provides, the audience it targets, and if the brand operates in the same circles as yours. Existing in the same circles means finding out if those companies have brick-and-mortar locations in the same towns or if they use the same marketing and sales platforms online. When you answer these questions, you’ll find most competitors fall into three categories:
Direct Competitors
Direct competitors are brands that offer the same products or services as yours and target the same audience’s pain points or needs. This group of competitors exists within the same industry and market niche as yours. Brands within your direct competitor sphere share similar features, like product or service production and workforce size. This is the type of competitor you’ll review most often with an analysis. To help you understand the concept of finding a direct competitor, let’s look at an example:
A mid-size publishing house wants to do a competitive analysis to find out which genres or audience groups they should explore to expand their offerings and bring in new business. Which publishers is this brand’s strategy team going to deep dive into, to learn the best ways to ramp up these efforts? A mid-size brand won’t look at the big five publishers like Penguin or Harper Collins as direct competitors. Those companies are too big and their audience, offerings, and reach go beyond what the example company should do with their marketing strategy.
Instead, the sample publisher’s strategy team needs to find more brands like it. Ones that produce similar amounts of products, have a relatively same-sized workforce and reach a similarly sized audience.
Indirect Competitors
Indirect competitors are brands that offer similar products or services to yours within the same market. These rivals also target the same pain points and needs of their audience as you do. You might review these competitors with an analysis if you’re looking to scale production, or if you want a better picture of the overall landscape of your industry.
To return to our publisher example, let’s say the sample company sells comic books, while another mid-sized publisher sells graphic novels. These two brands would be indirect competitors. The audience’s needs are the same for both groups. Their readers want visual-heavy books, but the products they offer are slightly different.
Indirect competitors are also those within the same industry that don’t share features like production quota, workforce size, audience research, or income. With our mid-size publisher, the big five—like Harper Collins—would be the brand’s indirect competitors. Both publishers offer similar products, but Harper Collins is much bigger in all aspects of its business.
Substitute or Replacement Competitors
Substitute competitors are brands that offer different products or services to yours. These companies still target the same needs and pain points of the same audience. For example, substitute competitors for our mid-size publisher may include magazine publishers, eBook publishers, or even brands that engage in content marketing. Books, eBooks, and brand content all meet the same need or pain point: providing reading material to an audience. But any reader knows a book differs completely from a magazine, and both differ from brand content like blog posts and white papers.
Substitute competitors often enter the game when convenience is a factor. If someone is waiting to catch a flight at the airport and wants something to read, they’re more likely to pick up a magazine at the newsstand than go hunting for a book. But just because a substitute competitor’s impact on your brand is more minimal than others, that doesn’t mean you shouldn’t ever consider them as a target of competitive analysis. The goals and benchmarks you hope to reach from your analysis may influence when it’s time to include these kinds of companies.
Trust CopyPress To Develop Your Perfect Competitive Content Analysis
Creating a competitive analysis takes a lot of work. Between finding the right targets and dedicating the time to research, you may wonder if it’s smart to spend so many resources on the content planning phase. Instead, let CopyPress do the heavy lifting of competitive analysis for your brand so your team can spend more time reaping the rewards.
Register today to have your free content analysis report sent to your inbox. Inside, you’ll get insights into some of the most important areas of content analysis, such as how your pieces compare to those of your top three designated competitors. The report also gives more information about your backlinks, potential syndication partnerships, and data to help you fill those all-important content gaps.
After you receive and review your report, set up a meeting with our strategy team. We’ll go through each section of the report with you and help you plan a content road map that works for your team.
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Kevin Doory
Director of SEO at Auto Revo
CopyPress writer
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