How To Analyze your Competition and Elevate Your Online Marketing Efforts
Competitive analysis is an integral part of the marketing of any business. After all, the company operates in a competitive market. And to form a strategy, you need to consider the specifics of the product or service and understand those external factors that directly or indirectly affect the company’s development.
The analytical methods of classical marketing are difficult to adapt to digital reality: they require a lot of time and a theoretical foundation. This article is about how to easily do a competitor analysis and improve your digital marketing based on it.
Find Opportunities
Imagine a business world where you don’t have to fight for market share, where the word “competition” only appears when it comes to the Olympics, and price pressure is almost non-existent.
W. Chan Kim and Renée Mauborgne describe this seemingly utopian scenario in their book “Blue Ocean Strategy.” The sea (navigation) strategy was the invention of people who know their business in the most minute details. Some are particularly good at navigating like so.
For example, Cirque du Soleil (Circus of the Sun) once became the most popular entertainment show because they had no competition. When this theatrical giant came along, most circuses still focused on animal-based performances.
Cirque du Soleil abandoned animals, rejected the already established circus canons, and moved to the next level, where animals are below the valued element of the show. And if before the circus was a place of entertainment for people with little education, Cirque du Soleil has become an enchanting place for connoisseurs of entertainment.
However, not in all business situations is there a field for creating a unique and inimitable idea, but there are general principles and ways to overcome competitors. Let’s start with the usual practice at the start of most controlled processes: the analysis.
Analytical methods of classical marketing
To analyze the competitive environment, you would need to gather and use many different tools and methods. The methodology depends on the goal. A short-term forecast is necessary for a long-term strategy, and various other macro-factors are also accounted.
Analytical methods such as SWOT analysis, SPACE analysis, PEST analysis, or M. Porter’s competitive model require many time resources and an accumulated theoretical foundation. Each of the methods will compare and evaluate similar but different factors. The main thing is that adapting marketing research to digital reality is mighty challenging.
The 3-step algorithm proposed in the article will help simplify the analysis of the competitive environment and form it in a holistic and detailed form.
- Creating a list of competitors.
- 7P competitor analysis.
- Digital analysis of competitors.
Creating a list of competitors
First, let’s define what types of competitors are around us. Let’s conditionally divide them into three categories.
- Straight. The most important and dangerous, fighting with the business for one segment of consumers.
- Indirect. Require attention. For example, indirect competitors of offline language courses are courses with distance specialization.
- Implicit. Potentially dangerous. These companies may have different products and services, but they become competitors due to the limited budget of consumers.
Before making a list, you need to assess the situation. The company has an “individual” competitive environment: geographic attachment, industry, business specifics. An effective business strategy depends heavily on variables such as these.
It is essential to understand the level of competition in which your business resides because each of the stories gives specific characteristics to the market. There is an excess of offers with high competition, and the struggle for a potential consumer becomes difficult.
Low competition is also not always a positive indicator for business. Indeed, in such a market, the buyer purchases goods, focusing on the price aspect. And if the advertiser is not ready to offer the most competitive price, he loses consumers due to their focus on quantitative rather than qualitative characteristics.
To identify and measure the level of present competition using traditional marketing involves in-depth research. Fortunately, today’s digital world offers more flexible and more straightforward and more accessible tools to handle the job than ever before.
For example, the Word Planner in Google Ads allows you to find out the level of competition in a few clicks, taking into account geographic data and even seasonality. Suggest the system the keyword suggestions that best describe your business, and the tool will provide a report in a few seconds.
After the assessment, you can start building the list.
Now let’s look at other competitor search tools. You can combine the suggested methods or choose only those that you like.
Maps and guides
The easiest and most familiar way to find competitors. If your business has a geographic focus, maps can help you identify local competitors.
Ratings and reviews
We often use such resources when we carry out a search on our own and want to be sure that the selected place has the best characteristics.
Specialized services
Services are an essential part of competitive analysis. They help identify the niche and the advertising competitors. With the help of conventional marketing efforts, it is impossible to determine which competitors promote their business, how they do it, and where. And special services collect all the necessary information in a few clicks.
The services analyze the semantic intersection, and therefore, they identify the domains of those competitors that are actively luring consumers into the online environment.
Declarations and semantics
The tools allow you to analyze your competitors in advertising – a valuable function. We must form a list of competitors whose advertising results intersect with ours. Those closest to us on the line are the most dangerous for business.
When collecting the semantic core, critical queries with a mention of a brand can also slip through. The higher the frequency of such a request, the higher the importance of the competitor.
Marketplaces
Marketplaces are a great tool for e-commerce. Just select a product category on any marketplace, and you will see competing stores.
Reports from sites
To search for competitors, you can order reports from Google. These reports are suitable for large advertisers. You’ll have to wait for several weeks to get the information. You will receive only general information, which is not enough for a full-fledged competitive analysis.
After forming the list of competitors, there is the question of what to do with this list. As mentioned earlier, there is plenty of marketing research, but we suggest keeping things simple and using the 7P model adapted to the current reality.
7P competitor analysis
The marketing mix model is universal and is a kind of checklist. Due to its simplicity, anyone can use it, even non-marketing specialists.
Previously, the marketing mix consisted of four elements (4Ps). As the competitive environment develops and becomes more complex, 5P and 7P models have emerged, adapted to the current realities of the market.
The 7P model consists of the following Ps:
Product, price, place of sale, promotion, people, process, physical evidence.
Let us examine each of the P in more detail. Let’s take language courses as an example and look at some of the basic characteristics of certain P.
Product: number of language courses; online courses; individual groups.
Price: average value of the hour; the convenience of the payment system; installment plan.
Place: number of branches; the convenience of location.
Promotion: activity; public communications.
People: qualifications and certification; consultations; community.
Process: author’s methods; online training system; interactivity.
Physical evidence: guarantees; reviews; educational handouts.
The set of characteristics for different types of business is individual. We assign a rating scale to each of them.
The main requirement: within the framework of one characteristic, the scaling must be mirrored. Then the results obtained will be correct.
It is most convenient to create a table in Excel, where you can leave comments and notes so that everyone who opens the model understands its formation history.
As a result, we get understandable and straightforward quantitative indicators that analyze your business and competitors to identify strengths and weaknesses.
Based on these data pieces, you can form a competitive and high-efficiency USP (Unique Selling Proposition). After all, you are not using loud and empty CTAs, but already at the stage of meeting potential customers, you give information about the distinctive and strengths of your company.
But for USPs to be attractive, you need to analyze the CTAs used by competitors additionally. It is enough to manually analyze the issuance of advertising sites and fill in the table.
By combining an understanding of the business’s strengths and knowledge of those USPs that competitors use, you can create the most effective and high-quality advertising proposal.
Digital analysis of competitors
In traditional marketing, it isn’t easy to find tools to help you find out where competitors are promoting and which sites they support. But the digital world today allows you to conduct a detailed analysis of competitors in a few clicks and receive comprehensive information.
For example, the Auction Statistics tool in Google Ads helps you identify competitors in SERPs, overlap with them, and win rates. Thanks to this data, you can determine what percentage of traffic you buy out and quickly adjust for a better customer acquisition strategy and attract more potential customers.
Using special services, you can find out what keywords your competitors are using. SEO specialists from Sydney advise using the semantic core of your competitor in your advertising campaigns.
You can see which traffic sources a competitor is using. The information obtained helps, for example, to determine the feasibility of increasing activity on social networks without spending time and money on preliminary tests or experiments.
Conclusion
Does a business need competitive analysis?
Suppose a business is ready to form its strategy without understanding the competitive environment in which it lives and without knowing its strengths and weaknesses. In that case, you don’t need to spend too many resources on studying competitors.
But do you want and are you ready to develop your business without understanding the specific features of your product? Unlikely. Therefore, competitive analysis is an essential and necessary tool for any business.
