As a practical marketing tool, competitor analysis is one of the most useful and most grounded. It identifies both the similarities and differences between players in the marketplace and most importantly it identifies clear gaps that have yet to be tapped and leveraged.The Biggest Insight? Find the Gap & Embrace Your Difference Click To Tweet
It is however, one of the least used and maintained tools in a companies marketing toolset.
The tendency for time constrained businesses is to scan competitors picking up insights at a glance. Rarely is it completed in a methodical and consistent way.
Rarer again, is it an activity that is maintained. This is also true for larger organisations.
So what is a competitor? According to Business Dictionary, a competitor is:
‘Any person or entity which is a rival against another. In business, it’s a company in the same industry or a similar industry which offers a similar product or service.
The presence of one or more competitors can reduce the prices of goods and services as companies attempt to gain a larger market share. Competition also requires companies to become more efficient in order to reduce costs.
Fast-food restaurants McDonald’s and Burger King are competitors, as are Coca-Cola and Pepsi, and Wal-Mart and Target.’
In my experience we need to go a little deeper than that and think more laterally about competitors and exactly who they are.
‘A competitor is someone who ultimately targets the same customer spend as you.’ Click To Tweet
That means therefore, that your competitors may not necessarily be in the same business or industry as you. They may not even be offering the same product or services as you. Bottom line, your competitor is someone who’s after the same Euro, Pound, Dollar, Yen (or whatever your chosen currency is) as you.
Think ‘share of wallet’ here and there’s only so much of it to go around.If your potential customers are not spending it with you – who are they spending it with? Click To Tweet
Quick Aside here – you may also be competing for ‘share of mind’, seo rankings etc and this is why the word ‘ultimately’ is so important in my quote above.
I repeat ‘a competitor is someone who ultimately targets the same customer spend as you’.
An Example from my own Perspective.
Say for example someone is looking to grow their business. They may not just be looking at marketers. They may be looking at accountants, HR consultants, PR consultants and so on.
They may not even be looking for advice or even a training program. They might be looking to spend it on a conference, an advertisement in a trade magazine and so on.
They are looking at where they believe they will achieve their business goal i.e. to grow their business.
‘Your Competitor is wherever your Customer chooses to spend their share of wallet, if they’re not spending it with you.’ Click To Tweet
Get to know your Customers and they’ll Show you where your Competitors are.
Your first step is to brainstorm and identify who your competitors are.
- Who you might have lost tenders to or won tenders against.
- Where your customers go if they don’t go to your store.
- What products people are wearing or eating if they are not wearing or eating your products. Now make a list of each of these.
Keep it short. Analyse your most important competitors first then add to it over time. No less than 5 and no more than 10 as you start this process.
Otherwise it becomes too unwieldy and impractical to maintain. Not to mention deflating!
So What is Competitor Analysis?
According to Wikipedia
‘Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. This analysis provides both an offensive and defensive strategic context to identify opportunities and threats.
Profiling coalesces all of the relevant sources of competitor analysis into one framework in the support of efficient and effective strategy formulation, implementation, monitoring and adjustment.
Competitor analysis is an essential component of corporate strategy. It is argued that most firms do not conduct this type of analysis systematically enough. Instead, many enterprises operate on what is called “informal impressions, conjectures, and intuition gained through the tidbits of information about competitors every manager continually receives.”
As a result, traditional environmental scanning places many firms at risk of dangerous competitive blindspots due to a lack of robust competitor analysis.’
I concur with this perspective that companies do not undertake competitor analysis systematically enough. This article is my contribution to showing businesses how to use this analysis to position your business in a niche that you can own and grow your business from.
RESIST THE TEMPTATION TO BE THE SAME
Our brain makes sense of the world by finding patterns. If anything breaks that pattern we find another pattern for it to fit into. We like things that are familiar or similar. We feel safe with the familiar and the similar.
Remember the last time you changed your car make and model. When you went through your decision making process to change cars, it was all new. The car was new. It was an adventure. It was a big decision.
Now, do you also remember that once you actually bought that car, you kept seeing it everywhere and even in the same colour! That’s your brain kicking in and reassuring you that you made the right decision. Your brain wants to return you to ‘safe mode’. Hence car advertising is not necessarily about selling cars but reassuring you that you bought the right one. Other people bought it so it must be okay.
This experience often gets mirrored in the business world where business owners scan the competitor space incl. websites, shelf space, social media for a quick insight. All that’s happening here is a mental check to see if everyone’s on a par? If the answer is yes, then they move on.
And that’s the danger. Subconsciously if everyone is playing by the same rules we think we’re okay. Businesses do talk to each other. They share information about trends. They share what works and what doesn’t. And that’s great but all it does is ensure that they are all the same.
As human beings we have a desire to form communities, to build relationships with one another. We gravitate towards others who are similar to us. We want to belong, to be liked and in a sense we want to be like everyone else.
IT’S TIME TO EMBRACE YOUR DIFFERENCE
Embracing difference is the essential component of a great competitor analysis not to mention your marketing strategy.
If we scan, glance or intuit; as is the norm, all we’ll see is where we are the same as our competitors. It’s time to resist that temptation and embrace your differences or as Marty Neumeier says it so eloquently
The human desire to be the same often overwhelms the business need to be different. It’s a battle with ourselves and this is why Competitor Gap Analysis is overlooked so often.
It is difficult to rise above that need to be like everyone else, to methodically identify where the gaps are that you could own. There is a tendency to assume we are the same as everyone else and they are the same as us.
You can be the same… if you want. If you don’t, read on.
We discussed in my earlier article on positioning the importance of competitor analysis in order to actually assess where our point of difference is. How can you know what is different if you haven’t looked.
There are gaps everywhere regardless of what industry you are in. The gap can be centred around
- the products you carry
- the vibe in your location
- how much you smile
- your social media
- the ingredients in your products
- the packaging of your products
- the vastness or narrowness of your product range
- and so on.
Each difference can be leveraged and each difference can be optimised. I’ve done this time and time again and every time knowing the difference; makes all the difference.
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I’d like to you to be able to hone in on your differences in the marketplace so I’ve created this 8 Step Guide to a Game Changing Competitor Analysis.
You’ll learn what you look for, how to identify the gaps and you’ll be able to see where you can find a niche for your business that nobody else has. Download it, print it or keep it handy on your desktop and find the difference in your business that’s going to make all the difference!
As you go through this process you may identify things from your own industry that are useful. Expand the search as need be. These 8 steps will give you an indepth look at each of your competitors in a very methodical way and the gaps will become apparent as you progress through them.
If you really want to be different then spend the time and look outside of what you are doing. See what they are doing and start from there.
Enjoy. Let me know how you get on. I’d love to hear all about the difference you found in your business that made all the difference. I know this is a challenging part of the marketing process but bear with it. You’ll use these insights so often as you progress that you’ll never regret doing it.
I love to work with businesses, both large and small to help them create sustainable business dreams... Brand and Strategy are at the heart of everything I do and that gets rolled out digitally and across any channel where your customer lives.