To stand out in any market, evaluating your competition is essential. The most effective businesses not only know themselves and their target market, but they also know the companies competing for the notice (and dollars) of that target market. In the past, doing competitor research was far more complicated than in today’s digital age. What used to take weeks of work and waiting now only takes a few strokes on the keyboard. If you are ready to learn more about your competition and, as a result, your own company, here is a step-by-step guide to doing an online competitor analysis.
Step 1: Identify your competition.
The first step may seem pretty basic, but before you can analyze your competition, you need to know who they are. One easiest way to start looking for them is with a google search. See what businesses come up when you search for the products or services you offer. It is valuable to sort your competitors into direct competitors and indirect competitors.
A direct competitor targets the same audience with the same or very similar products. An indirect competitor targets the same audience with a different product or a different audience with a similar product. As you do your analysis, you should pay the closest attention to your direct competitors. Analyzing your indirect competitors is more beneficial when you are looking for potential growth opportunities for your business. Also, note where your competitors operate and give special attention to those nearest you geographically. Choose four or five of your competitors, and then it’s time to dive into some research.
Step 2: Examine your competitors’ websites.
Today, 81% of shoppers begin their search online. One of the best places to learn about a business is on their website. You put a lot of time and attention into your website, and so do your competitors. So start there when you are beginning your research. Not what kind of information they have published on their website, what products they offer. Note the feel and the wording they use on their website. And ask yourself what kind of experience the customer gets from this website. As you do, take notes of what this website does well, where it needs improvement or anything interesting or noteworthy you come across.
Step 3: Read their blog.
While you are searching around a competitor’s website, make sure you take time to check out their blog. A blog is one of the best places a business can establish itself as an industry expert. It is also where organizations make themselves useful to their customers. Read several entries and ask yourself some questions as you read.
- What kind of information do they publish?
- How often do they publish blog posts?
- What topics do they repeatedly visit in their articles?
- What is the quality of their content?
- Do they include videos, infographics, or other non-text elements?
Don’t just read the articles, either. Read the comments that readers leave and any responses from the company. You will probably get some ideas of topics you might cover in your blog, questions customers tend to have, and how your competitor solves the problems your customers face.
Step 4: Look at their social media presence.
A digital presence is essential for successful companies today, and social media is key to that digital presence.
Through social media, you can learn an almost infinite amount about a business, what they stand for, what they value, and how they connect with their customers. You have spent much time thinking about and planning your social media. Now it’s time to see what the competition has been doing. As you are digging through the world of all things social, ask yourself some questions.
Again, read not only the posts but also the comments their customers leave.
Step 5: See what others have to say about them.
As you research your competitors, you are learning a lot about what they have to say for themselves. You are also, no doubt, learning what others are saying about them. Now is the time to focus on the comments and know what others are saying. Next, take a look at product reviews. What information does the Better Business Bureau have about them? Keep taking notes and keep writing down any thoughts that occur to you as you do your research.
Step 6: Get the customer experience.
If you want a good idea of how your competitors treat their customers, it’s time to become one. The best way to learn about a competitor’s customer experience is to become a customer yourself. Make a purchase or use a service. As you do, be continuously observing and take extensive notes.
- How do they treat their customers?
- What do they do well?
- What do you do better?
- Are there any ways you can improve your business based on this experience?
- How does their product compare?
- What do they do well?
Step 7: Do a SWOT Analysis
By this point, you have a ton of information about your competition, and it’s time to organize it and start using it to improve your own business. It’s time to do a SWOT analysis. A SWOT analysis is a tool that you can use to assess your business. The four letters stand for Strengths, Weaknesses, Opportunities, and Threats. MindTools has a downloadable template you can use to complete your SWOT analyses – one for each of your competitors and another for your own business. They also walk you through some questions you can ask yourself as you are completing the form.
This analysis will give you a focused idea of where you can grow your own company and better meet your customers’ needs. It will also help you identify areas where you stand out from your competition and items you might want to highlight in future social presence or campaigns.
Step 8: Put your analysis to good use.
You have undoubtedly learned so much through this process, but just having the information isn’t enough. You have to put it to work. It’s time to ask yourself, “How can I improve my own business based on what I have learned?” Set realistic goals, make a plan, and put it into effect. Note as you go along, even if it’s informally, how your competitor analysis helped get you here. You will know better than we do how to improve your business and stand out from your competition.
Now that you have done your competitor analysis don’t get too comfortable. Looking at your competition is an ongoing process. By making competition analysis a regular part of your business practices, you will not only stay informed about important events in your market, but you will also have a continual source of inspiration on how to improve your own business. Subscribe to your competitors’ social media streams, newsletters, and blogs. Do social listening not only for your business but for theirs too. As you do, you will continually learn and find inspiration to make your business even better.