Understanding your clients’ competitors is crucial in the marketing space. However, we know that most people are doing their competitor analysis completely incorrectly. We’ve identified four of the biggest mistakes businesses are making when evaluating the competition and we want to help you correct them.
- You’re looking at 2-3 competitors who follow similar models to you. When we ask companies who their competitors are, most give us a list of 2-3 (maybe as many as 5) and then tell us they’re the same. What you should be doing is going product by product, service by service, and evaluating primary competitors in those markets. For example, if you’re a digital marketing agency, you might compare digital marketing agencies to yourself. But that’s the macro version of a competitor analysis. To really understand the competition, you have to do a microanalysis. Go product by product, service by service. For example, we provide web design services. Therefore we should be comparing ourselves to similar companies who provide web design services. In the SEO space, we should evaluate the other SEO agencies with whom we compete. And we repeat that for each product and service we provide. Create a graph of each item, identify 3-5 competitors for that particular item, and evaluate each on their merits
- You’re doing it once and maybe only evaluating it annually. A competitor analysis should be done quarterly. The world evolves quickly — particularly in the digital space, so it’s important to review what is working, what isn’t, and who the competition is on a quarterly basis. We know it’s time-consuming, but something that should be taken into account is a marketing campaign. These shift with the seasons, so it’s important to evaluate the competition on a consistent basis, look at their product/service, their competitive advantage, and their marketing campaigns.
- You’re failing to acknowledge what the competition does well. Competitors pose as competition for a reason. Someone thinks they have value. A common refrain we hear is that the competition isn’t worth their salt or is only interested in cheating customers or is completely incompetent. I hear you. Believe me, I saw it about our competition at certain times. But, at the end of the day, I have to be objective enough to identify the merits and values of some of the competitors. Maybe they have a very convenient shopping cart. Maybe their graphic designers are extraordinary. Maybe they have incredible customer service. The fact of the matter remains that you have to be able to admit that the competition might not be terrible at their jobs. It’s probably the hardest part of the competitor analysis and a good reason you may want to have a professional marketing agency conduct it for you.
- You’re ignoring indirect competitors. Direct competition is easy to identify. It’s an apples to apples comparison of one product or service to another. However, there are always indirect competitors that you have to identify. If you sell coffee on your website, Amazon might be an indirect competitor. It isn’t that Amazon makes coffee, but as one of the largest e-commerce platforms on the planet, it sells an awful lot of coffee. While I wouldn’t consider GoDaddy a competitor of mine, they do provide an SEO service for a minor upcharge on their hosting. Is it even close to our SEO packages in efficacy? No, of course not. It also doesn’t provide individualized agency level services, but a lot of small business owners know what SEO is because of the features on their GoDaddy hosting panel. Therefore, it has to be something I can’t completely discount.
So, are you ready to conduct a competitor analysis now? If you still feel overwhelmed and don’t know where to start, contact us for more information on how to get started, or let us complete a competitor analysis for you. We guarantee it will provide an invaluable amount of insight, detail, and will reveal a great deal of information about your industry that you probably didn’t think was possible.