How to Run a Competitive Analysis

Any business project requires an in-depth competitor analysis. It helps figure out the main players in the market and how to win the competition.

However, sometimes business owners have issues with this process.

In this guide, you will find out how to run a competitive analysis from A to Z.

Let's get the ball rolling!

Explore your competitors first
It won't be hard for you to identify your direct competitors. Competitors are the companies that solve the same customer's problem with the help of more or less the same solution.

For instance, well-known music equipment companies Ibanez and MusicMan are competitors. Despite this fact, there are cases when similar businesses are not direct competitors. Compare a fitness center with a gym. And you will see the difference.

How to figure out competitors relevant to your business?

Pay attention to similar keywords!

To start, you will need to know one competitor at least. Also, it is necessary to use Site Explorer tool from Ahrefs. Put a competitor's website to Site Explorer and click the "Top competing domains" report by reviewing the "Organic competitors" tab. This report reveals other websites ranking for the same keywords.

For instance, there is a content design company called Canva. Your goal is to explore Canva alternatives using the method explained above:

Skim through the report and find your competitors right off the bat.

If you don't use Ahrefs, then Google can help you the same. Just type the search request "brand's name competitors":

Collect information about competitors
You need to collect information about competitors. It will help you with nuances around their business development.

Consider these positions:

• Year founded
• Venture capital investors (if any)
• Number of employees/customers
• Revenue

To find this information visit Yahoo Finance or Crunchbase. A number of employees you can find on the company's LinkedIn page.

Run a product and service analysis
To win the competition, you must learn from your competitors. Here are four aspects to draw your attention to:

• Services and features (run a drive test of the competitor's toolbar)
• Pricing (review the pricing page and see if there are any discounts offered)
• Customer reviews (review customer reviews via review platforms)
• Strengths/weaknesses (sum everything up and underline strengths/weaknesses the company has)

Finally, create a slide presentation that would illustrate the entire analysis you've run.

Analyze competitors' distribution channels
Basically, companies can sell their products "direct-to-consumers" (DTC) on their sites, door-to-door, or in retail stores. This way of distribution is used for selling digital products mostly.

However, there are more complex ways of distribution as well.

How to explore competitors' channels for distribution?

First and foremost, check out if it is possible to buy a product on the site directly. If not, go to Google to see whether you can buy their products from other retailers.

Apply communication strategies
At this stage, your goal is to find associations people have with competitors' brands - logos, mascots, brand colors, slogans, fonts, etc.

For instance, a world-famous McDonald's has a mascot Ronald McDonald - a clown that is the face of the brand.

Analyze your competitors in this direction. It will help you understand how you will be able to use an associative flow for your brand.

*Become a ghost shopper *
To realize how competitors' business works, you need to become a ghost shopper of their products.

Here are four things to do:

• Experience a buying circle (purchase the product and go through the whole buying process)
• Pay attention to the sales tactics (see if they offer any discounts, to buy more products, etc.)
• Test customer service (check out how their customer service works)
• Analyze an onboarding process and customer retention aspects (review how the customer onboarding process happens and what tactics they use for customer retention)

Afterwards, use a progress report template to finalize the overall competitive analysis.

Final Thoughts

Keep in mind that competitive analysis is a crucial part of any marketing strategy. Plus, you should revise it from time to time.

The main focus is to apply all findings into action.

If you think this post lacks some ideas, feel free to share them in the comments.