How to analyse competitors for business growth?
The competition, eh?
Who needs them?
What can we possibly learn from them?
Shall we just ignore everyone else?
Sadly, burying your head in the sand about your rivals is not a great choice if you actually want to grow your business. Instead, we should view them as a great source of information for improving what we do!
Read on to find out what information you can glean about your competitors, learn what tools exist to gather the facts and figures and, more importantly, why you should.
Why should I do competitor analysis?
You should regularly carry out competitor analysis to make sure you are keeping on top of the best practices and current trends in your market, and to make sure you're not losing customers to rivals.
Competitor analysis aims to answer the following questions:
- Who are my competitors?
- How popular are my competitors?
- Are my competitors targeting the same people as I am?
- What are my rivals doing right?
- Are there things they are missing or doing wrongly?
- How can I differentiate myself from my competitors?
- How does my competition compare to my business in terms of pricing and quality?
- What can I learn from my competitors to improve my own business and drive new sales?
Competitor research can be time-consuming, but the more exhaustive your research, the more powerful the results will be for your own growth. This is why it’s important to know how to analyse competitors.
This article will cover some of the ways that you can analyse the competition to keep on top of your game.
Corporate and industry news
One of the simplest ways to begin your competitive analysis is to stay ahead of the game; be aware of any forthcoming changes and general progress within your industry. When new trends emerge, businesses tend to jump in and try to capitalise on these. It’s important to make sure you’re not left behind. It’s all about staying current!
Email subscriptions
Subscribing to email newsletters and updates from key players in the industry is one way to do this. You can also subscribe to updates from relevant news sites and bloggers. This is a low-effort way to stay in the loop, as this type of news is delivered straight to your inbox.
You should also subscribe to your competitors' email lists to see what they are sharing with their customers.
Google Trends
Google Trends is an online tool you can engage with. Through this subsidiary of Google, you can see what’s trending – the content is filtered by category and geography.
For example, when I search the term ‘cooking’ with the filters ‘UK’ and ‘last 7 days’, I can see that searches for cornmeal flour are up by 450%.
If I want to stay ahead of my competitors in the cooking industry, this could be a good starting point for introducing a new product line or advertising an existing one. I could also post blog articles and recipes relating to cornflour to showcase my knowledge of latest trends. This helps me stay competitive.
Customise your newsfeed
We all love a cheeky bit of social media at work. It makes us feel like rebels!
However, you can make use of your social media to quickly keep on top of emerging trends. Groups, businesses, pages, and people within your industry will post updates and news in real-time.
By customising your newsfeed, you can make it easy to scan for key information and see what others in your niche are doing. This is a hugely cost-effective and reliable way to analyse competitors. Hear it straight from the horse's mouth.
Trade journals
Invest in a subscription to a relevant trade journal or magazine. This will show you advertisements and news from others within your industry. They’re probably not quite on par with Cosmo or GQ, but they’re top for industry gossip.
Identify and categorise competitors
Pretend you’re a customer looking for your product or service. This is a sure-fire way to analyse competitors. Type what you’re looking for into Google and don't be afraid to play with which words you use.
- Who is at the top of the rankings without filtering location?
- Who is at the top of the rankings for local searches?
- Do the keywords you use change who ranks first?
This gives you a sneak-peek into what your customers are seeing when they’re searching for your products and services. With proper competitor research and spectacular marketing strategy consulting from Ketchup, you will have all the tools you need to nudge your way into the top results and stay there.
Example
Compare the results for the following search terms.
Saucepans
Saucepans Grantham
As you can see, the national retailers for saucepan retailers are different from the local ones.
And trust us, saucepan retailers are a competitive bunch. They always have a handle on their market and try and keep a lid on their competitor’s share of it!
From simple searches like these, I can find a starting point for further research. Oldrids & Downtown are top of the search results for saucepans locally.
So now I need to ask myself some questions:
- What range of products do they sell?
- How much do their products cost?
- What can I offer that is cheaper, more diverse, or better quality?
- How are they marketing their products?
- Who is their target buyer?
Answering these questions as part of your competitive analysis will allow you to place your business within the market in comparison to others with the same products and/or services.
Find your local competitors
Google Maps is a great tool for finding local competition.
For example, if I type ‘cookware’ into Google Maps, these are my results:
The bar on the left gives me a list of local cookware retailers, while the map shows me where I can find them.
The next step would be to browse the websites of these companies, visit their stores, and explore their literature. You want to know what they’re selling and how they’re marketing their products.
What do you like? What do you dislike? What’s working? What isn’t?
If you really fancy it, you can even don a fake moustache and a pair of glasses for that James Bond experience when you visit a competing store. And who says competitor analysis can’t be fun?
Categorise your competitors
You want to know who your direct and indirect competitors are.
Direct and indirect competition
- Direct competition — direct competitors offer products and services that are the same as yours and market them to the same audience; most likely, they are also operating in the same area geographically.
- Indirect competition — indirect competitors may not target the same market as you, but they are able to fulfil your customer’s needs. For example, an office supplies store may be in indirect competition with a supermarket chain.
Although the supermarket’s primary product isn’t stationery, it may still offer a range, and customers may be tempted to pick up that ream of paper or packet of pens due to the convenience of getting them at the same time as their weekly grocery shop.
After you’ve identified your direct and indirect competition, you will then want to categorise them further — into primary, secondary, and tertiary competitors.
We like the example of dogs and cats. At Ketchup, we’re dog people —we have two gorgeous office dogs. So, if you were marketing an animal-themed calendar at us, we’d be looking at the retailers with a puppy Miss February. However, if we couldn’t find a dog calendar, we might settle for guinea pigs in hats.
So, when the niche retailers of pet calendars are fighting for our custom, the dog calendar sellers are direct competitors with one another, but the people with guinea pigs in hats still have a shot. They are an indirect competitor.
Primary, secondary and tertiary competition
- Primary competition — these businesses market products and services that are most similar to yours, and their target demographic is the same.
- Secondary competition — these businesses sell the same products and services but there are some differences from yours. For example, they may sell products at a completely different price point to yours or target a different demographic.
- Tertiary competition — these businesses are very loosely connected to yours but there may be some overlap with your target market. For example, Kindle and iPad; both products share several of the same features, although one is primarily targeted at readers and the other is aimed at internet users.
It’s important to categorise your rivals in this way so you can better plan your marketing strategy. In the first instance, you’re going to want to distinguish yourself from your primary competitors and discover your USP in comparison to these businesses.
But, in the long run, you may also want to look into how you can become more competitive against those in the secondary and tertiary categories.
Analyse market share
A company's market share is its sales measured as a percentage of an industry's total revenues (Investopedia).
(You know it’s going to be an interesting article when we start quoting Investopedia).
Your percentage market share is measured using this formula:
(Total Business Revenue / Total Industry Revenue) x 100
This measure matters because it shows how sales are divided among companies. There are a finite number of buyers within your industry, and you want the largest share of the pie as possible.
How to analyse using market share
You can monitor the market share of a company over time to see how it changes in the long-term—including your own. You can change the period of time you want to measure, for example, you may measure over the last month, six months, or year.
Finding data for market research
There are several sources you can use to estimate the revenue for your industry, such as:
- The Office for National Statistics, https://www.ons.gov.uk/
- Statista, https://www.statista.com
- Euromonitor International, https://www.euromonitor.com/
- IBIS World, https://www.ibisworld.co.uk/industry-trends/market-research-reports/
- Market Share Reporter, Cengage, www.cengage.com
Some of this data is free to access and view, but you may find it easier to go through a market research consultancy firm, such as Euromonitor or IBM.
The complete Market Share Reporter from Cengage is an expensive resource, but you can pay to access it through a digital library service, rather than purchasing the report.
To find out the revenue of individual companies, you can use data sites such as Owler, https://www.owler.com.
Example
Tina is a floristry start-up in her first year of trading as the owner of her company, Bunches of Love. She’s looked up ‘how to analyse competitors’. She wants to know how well her competitors are performing.
She has identified local businesses in her market as:
- Lily’s Lilies
- Petals
- Bouquetbuckets.com
She has used Owler to find out their revenue and created a table alongside her own company’s statistics:
| Company | Revenue |
|---|---|
| Bunches of Love | £22,120 |
| Lily’s Lilies | £48,567 |
| Petals | £47,629 |
| Bouquetbucket.com | £92,651 |
She has used IBIS World to find out the industry revenue.
Tina can now work out the market share of Bunches of Love and her local competitors by using the formula: (Total Business Revenue / Total Industry Revenue x 100).
| Company | Revenue | Market Share |
|---|---|---|
| Bunches of Love | £22,120 | 0.002% |
| Lily’s Lilies | £48,567 | 0.004% |
| Petals | £47,629 | 0.004% |
| Bouquetbucket.com | £92,651 | 0.008% |
From this data, Tina knows that raising her share by 0.002% will raise her revenue by approximately £26,500.
So, how is she going to convince those buyers to switch to her company? She should start by figuring out how Lily’s Lilies, Petals and Bouquetbucket.com have attracted their customers. This requires further competitor analysis.
Tina takes a deep breath, and forges on.
Identify key demographics
When wondering how to analyse competitors, knowing who your competitor is targeting is a good start. This knowledge can help you make sure you’re pushing your USP and advertising how you’re different from your competitors rather than overlapping in your approach.
Although you and a competitor may both be selling women’s handbags, for instance, the demographic you’re marketing towards may be completely different. For example, your brand may target teenagers and young adults while your rival may be focused on middle-aged and older women.
To find out the target demographic of your competitor, visit their sites and social media pages. What promotions are they running? Which tone of voice do they use? What do their products look like? Who are they best suited for? How do they use imagery? What language do they employ?
Monitor costs of products and services
Cost matters. After all, I refuse to pay 10p for a plastic bag when I can walk home with toilet rolls under one arm, three bottles of wine between my fingers, and a loaf of bread on my head. It’s simple economics.
While clever marketing can go a long way, you also want to make sure your prices are reasonable and suitable for your demographic. For this reason, it’s important to do effective competitor market research.
Browse their websites, print materials, and social media to find out how their products compare in cost to yours.
When doing this, make sure you are comparing like-for-like products. A genuine Italian leather handbag will cost more than an imitation, for example, even if the design is the same.
Competitor capabilities and resources
Any good competitive analysis will consider the strengths and weaknesses of businesses in the same market. Here, we look at the what your rivals have on their side.
What is your competitor capable of?
Can they offer capabilities beyond your reach? Are they doing things you can't?
These are the questions you should be asking. When you know the answers, you’ll be able to identify your USPs and promote the ways in which you can fulfil customer needs your competitors can’t.
Financial resources
Companies with more disposable cash will have the resources for more staff, better marketing efforts, better equipment, and better distribution options.
Although you can’t do anything about a competitor’s monetary resources against your own, it can be a good consideration to have in mind. How can you get the greatest ROI for the lowest cost? When is it worth spending more?
You need to be savvy with how you’re spending money when you’ve got a budget in mind.
Wouldn’t it be wonderful if there was some way of knowing exactly what was going to help your business grow and what actions are the equivalent to throwing money away?
Ketchup Marketing has decades of experience in this field We will always give you straight answers and are passionate about ROI.
Intellectual property
Patents and trademarks are strong company assets. Does a competitor own exclusive rights to a particular product or service, trading name, or technique? What can you offer that may be a better solution, or just as good?
Often, companies patent or trademark assets because they believe there is long-term value in having the exclusive rights to that particular thing. They believe the patent or trademark will enable them to gain a larger percentage of the market share.
How will you convince the on-the-fencers to choose your company instead?
Knowing what your competitor has up their sleeve gives you the opportunity to come back with something of equal or better value for your customer.
Distribution
How easily can customers access the products and services of your competitors? Does your competitor own a single store or a chain? Where do they deliver to? Are they local or national?
If you can offer a more convenient, faster or more efficient method of distribution to your customers, then you can capture a greater percentage of market share.
There is a Tesco opposite my house. Literally, a thirty-second walk. But you know I’m ordering a take-away. Why? Because they’ll bring it to my door!
Technology
Has your competitor got all the mod-cons? Is their equipment state-of-the-art? Do their machines do more? Are their databases more comprehensive? How does their particular technology give them an advantage?
Make sure you consider all machinery, software, and equipment when you analyse competitors.
What can you do to keep up or exceed their capacity?
Relationships
What network does your competitor have?
Consider the following:
- Manufacturers
- Customer base
- Suppliers
- Distributors
- Marketing and PR
- Business connections
How might your competitor be using these relationships to their advantage? Which of these types of relationships could you enhance to give your business a boost?
Marketing strategy
While quality, cost, and accessibility of products and services go a long way, marketing holds a huge amount of influence in driving business. That’s why it’s crucial to examine marketing strategy to analyse competitors.
Marketing strategy consists of a wide range of efforts, including:
- Website design
- PPC
- Print design
- Publicity and media
- Branding
- SEO
- Email marketing
- Copywriting
- Social media
- Promotions
Ketchup Marketing provides all the above services. Explore the links to find out more about what each type of marketing entails. Which are your competitors using? Which are they using well?
And if you think your marketing could use a boost to give you the competitive edge, get in touch today.
Case studies
Companies like to boast when they do something well. Your competition won’t be shy about advertising their biggest clients or their greatest successes. (You should be writing your own case studies too).
Keep an eye on their social media, blogs and newsletters to stay on top of what they’re doing and where they’re finding success. This will give you an idea of what works well within your industry.
And while you’re doing that, why not check out our case studies too? After all, we also like to let people know when we do something well.
Competitor search ranking and SEO
In this final section, we extend the competitive analysis to include the crucial online presence of players in your space.
Search ranking
Search ranking has become one of the greatest indicators of a company’s success and one of the best ways to analyse competitors. It’s a self-fulfilling cycle—those who make it to the top of the search rankings attract customers, and those who attract customers make it to the top of the search rankings.
You want to identify how your competitors rose up the rankings so you can reach the same visibility and attract a larger market share.
It’s a bit like that game show Pointless. You may want to find the least popular correct answer and put your bets on that. This can be a workable strategy if you need to have greater control over your budget.
If you’re still not sure, take a look at our SEO page.
Authority
One of the criteria Google uses to assess where a website should appear in the search rankings is its perceived authority.
Basically, ‘authority’ means that the website has proven itself to be an expert on the keywords that bring people to its site. To gain authority, a website should provide high-quality information relating to key search terms.
For example, a website about cheese should give me great information about cheese. If it doesn’t, you know I’m going to go to another website that can give me the answer to the question ‘Can I freeze my cheddar?’.
You can get a feeling for the authority level of your competitors by performing keyword searches.
For instance, Tina from our earlier example might search something like ‘Where are the best flowers in Buckinghamshire?’ in order to test how well her competitors’ sites are performing in relation to this search.
If the links that appear directly answer this question, it would be clear that these sites have good authority. The customers are finding what they’re looking for.
How can you make your content even more specific, accurate, and informative? How can you ‘beat’ your competitors’ SEO to raise your own authority?
Backlinks
A backlink is a link that goes from one website to another. Backlinks help improve a website’s ranking—but only if the links are authentic. For example, paid links placed on junk sites will do nothing to help you and may even harm your business.
A website that has lots of backlinks from other sites has a greater web presence, which gives it greater perceived authority. This means it will be more successful in its rankings.
Search your competitors’ names in Google and look out for websites other than the competitors’ own. Which other sites are backlinking to your competitors’ pages? Are these sponsored or organic?
Do these backlinking sites offer similar products and services or do they attract a similar demographic? How are your competitors generating high-quality and authentic backlinks?
How can you do the same?
Adwords
Google Adwords enable sponsored ads—these are the links that appear at the very top of Google search results. Companies bid against keywords to appear at the top of the search results and then pay (per click) for customers that click-through to their site.
By searching different keywords and seeing whether your competitors’ sites appear as sponsored ads, you’ll get a good idea of how they are using Adwords to sell themselves. You can then bid against the same keywords to appear above them in search rankings.
It can be like an online auction for SEO.
Beware—popular keywords can be expensive to bid against. Using long-tail keyphrases (three words or more/specific phrases) can be a more affordable way to drive traffic to your site.
Content quality and frequency
Content quality
Quality content drives organic traffic. This means you’re not paying for visitors to come to your site. Instead, they are coming, of their own accord, to engage with the content.
If your rivals have high levels of site traffic, it’s probably because their content is informative, engaging, and well-targeted to their audience. For this reason, if you share the same audience, it’s worthwhile looking at the websites of these competitors, reviewing their content and getting a sense of what your site visitors want to see.
For example, people come to our website to enjoy content about our Labradors, our ongoing Ketchup Bake Off, and our exclusive blogs on how to be a better marketer. And there’s probably a few trying to analyse our pages to figure out why we’re so popular…
From this point, you can carry forward what you’ve learned into revisiting your own site content.
Content frequency
How often are other sites in your industry posting new content? Think about their blogs, social media, newsletters, and other marketing streams. Are they constantly updating and engaging with their audience?
Seeing how often your competitors engage their target market can provide a good benchmark for how often you should be introducing new content to your audience.
Let an expert do the work
Gosh, this competitor analysis stuff is pretty exhausting, isn’t it? Well, don’t worry! Ketchup Marketing has endless energy and enthusiasm for dealing with competitor analysis. We’re always ready for the challenge, no matter what market your business is in.
We’ll happily research available data, find the insights in the figures, and drive forward with a bespoke killer marketing strategy that may have your competitors quickly diverting their resources into learning from you!
The team at Ketchup are experts in marketing strategy. On a day-to-day basis, we review the competition and use our findings to inform our work. This means we’re always helping you stay ahead in your industry and gain an ever-larger percentage of that vital market share.
To find out more about how our experienced and professional team can help you stay ahead of the competition, contact us today, click here to email us or, alternatively, you can see our full range of services here.