How To Do A Competitive Analysis In Three Easy Steps + Free Template

How To Do A Competitive Analysis In Three Easy Steps + Free Template So your boss has come to you and said you need to do a competitive analysis. Maybe youve never done one before, or maybe its been a while and you need to brush up on your skills before you conduct another one. Either way, weve got your back. By the end of this post, you’re going to Learn what a competitive analysis is (and why you should care) Easily be able to conduct your own competitive analysis (because I’m breaking it down into three easy steps) Get an example of what one looks like (for easy reference later) AND be able to download your very own competitor analysis template down below. Let’s get to it. Learn How To Do A Competitive Analysis In Three Easy Steps + Free TemplateWhat Is A Competitive Analysis? If you've never done a competitive analysis before, this is a good place to start. Every business that I know of has competitors. (This isn't just for the Nike's of the world, because the smaller you are, the more vulnerable you are to the competition.) The smaller you are, the more vulnerable you are to competition, so get to that competitive...Understanding the strengths and weaknesses of your competition is important to the success of your business. Besides better understanding the environment your business operates in, conducting regular competitive analyses also helps you: Understand how you can improve your own promotional tactics†¦ Forecast the future of the market (especially related to the economic climate)... Better target current customers†¦ AND helps you read new audiences. Said another way - conducting a competitor analysis is crucial to how you decide to operate your entire  business. Recommended Reading: How to Complete a Social Media Audit in 9 Steps (Free Template) Competitive Analysis Definition According to Entrepreneur, the competitive analysis definition is this: â€Å"Identifying your competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of your own product or service.† Competitor analyses are more complex than just figuring out what your competitors are (or are not doing). They're about taking what you learn and improving your own business. After all, data that doesn't drive change is just a number. Data that doesn't drive change is just a number. Here's how to do a competitive analysis right.So without further ado†¦ Let’s jump into how to do a competitor analysis! How To Do A Competitive Analysis Performing a competitive analysis might seem like just  another task on your ever-increasing to-do list. And, while it might seem daunting at first, they're not that complicated and they are really beneficial. And to prove it - I’ve broken down how to do a competitive analysis in THREE (yes, just three) easy steps. Step 1: Identify Your Competitors This is an obvious first step. To start, perform a Google search of the products/services YOUR business offers, and take note of the results. For example, if you sell camping materials, you would type â€Å"camping tents, lantern, camping equipment, etc.† into the search engine, and then review the results, and compile a list of companies who also sell camping materials. It's important to be realistic about who your actual competitors are. Here are a couple of examples: If you’re a small business owner with a local brick-and-mortar women's clothing boutique, your competition is not the men’s retail store across the street (even though they are also selling clothing). The competition you should really focus on would be another women’s clothing store who is selling the exact same product as you. They are the ones who will have the largest impact on your success. OR If you’re a marketing agency in Minneapolis, Minnesota, your direct competition is other similar-sized marketing agencies in the area - not Ogilvy (a major advertising agency) in New York City. And once you feel confident about your pool of competitors, it’s on to the next step! Recommended Reading: 90 of the Best Marketing Quotes to Prove Every Point Step 2: Research Your Competitors After you’ve identified who your direct competitors are, it’s time to research them! This step is often the most time-consuming of the three, but it's also is the MOST important step. The data you collect here will directly impact the outcome of your analysis. The first phase of the research should be focused on the business of your competitors. Things you should look for include: Pricing strategies. Sales format. I.e. online or physical location? Product offering Next - you need to figure out why a customer would choose to purchase from your business and not one of your competitors. The best way to do this is to survey new /current customers. Recommended Reading: The Best Free Marketing Proposal Template That Will Get a Yes Here are a few questions you could ask new/current customers: What other business were you considering before you picked us? What do we have that our competitors did not have? Is there anything you wished we did have that our competitors do have? This honest feedback is one of the best ways to figure out how you stack up against your competitors in the eyes of your customers. Finally, you need to dig into their marketing materials and comb nearly every aspect of their website, social media and email communication. Here are the major things you need to consider: What are they doing with their marketing content? What are there overall strategies when it comes to demand generation, PR / social media, and product marketing? Who is their target audience? (I.e. Young professionals? College students? Professional marketers?) How many followers do they have on all the social networks? How are they positioning themselves in the market? (I.e. Are they the highest / lowest $$$ option?) Recommended Reading: The 30 Best Content Research Tips That Will Make You More Influential Step 3: Compare Your Business The last step is to compare yourself with your competitors. The best way to do this is by performing a SWOT analysis for each competitor, which helps you identify your own strengths and weaknesses, and in turn, identify your future opportunities and threats (this is where the term SWOT comes from). Once you’re done, you will have a clear picture of how you stack up against your competitors, and have all the information you need to decide what changes need to be made to optimize your business.