How to conduct competitive analysis: step by step
In order to develop your brand strategy, you need to clearly understand who your competitors are and what are their strengths and weaknesses.
It doesn't matter whether you are a company with an extensive background in the market or you are a startup - competitor analysis is one of the main tasks to stay ahead of the competitive landscape in your industry.
You don't have to be a professional in this - today, with the help of modern tools, anyone can do a detailed analysis of competitors.
Analyse the competitive environment.
Systematically to know in which direction to develop your business, build a competent pricing policy, choose effective channels for advertising your products, and avoid mistakes based on the experience of competitors.
When conducting a competitive analysis, we recommend following this sequence:
1. Identify who your brand's competitors are
Divide your "competitors" into two categories: direct and indirect.
Direct competitors are companies that offer a product or service that can substitute for yours and that operate in the same geographic area. Indirect competitors offer products that are not identical but can meet the same customer need or solve the same problem.
When comparing your brand, you should only focus on your direct competitors, but you should also keep indirect competitors in mind, as they can change their position at any time and move into the direct competitor zone.
How can you find your competitors? Try to start from Google Search – use your keywords to find out which companies are in search results related to your product.
Don’t forget hashtags tracking – search relevant hashtags in social media, use BrandVox or similar tools for this.
2. Identify what products your competitors offer
You can compare competitors' products with your own product line. After the comparison, you will understand in what aspects your products can differ from your competitors and what niche you can fill. This will help you develop a strategy to expand your product line and capture more market share.
You need to focus all your attention on the product or service that you can offer to the market that your competitors cannot. In a particular market, you will become a powerful player because the supply is small.
Your difference from others is your advantage. Focus on what makes you different and build your business around it.
3. Identify the sales and marketing tactics of your competitors and their results
For example, you can use similarweb.com to define main traffic channels
4. Look at your competitors' prices, as well as any benefits they offer
Categorise all competitors into the main price segments, usually there are 4 main segments: low-priced, medium-priced, high-price segments and premium segments.
By dividing competitors into segments, you can analyse competitors at different price points and understand their main advantages and disadvantages. This can help you develop your marketing strategy and decide which price segment you need to enter to take your place in the market.
5. Conduct an overview of competitors' social media accounts
You can use social intelligence tool to reduce time you spend for this task. Try BrandVox – new simple tool for benchmarking and competitors’ analysis.
Look at the number of followers of the page. You can compare the activity of different social accounts of all competitors in one window.
Analyse the Engagement rate. This is a calculated index that shows the engagement of the page audience. The index depends on the number of followers, posting activity, and the number of reactions.
You need a follower engagement rate to evaluate the effectiveness of competitors' content and compare it with your own. It helps you understand which competitors' posts are performing better and which are performing worse, so that you can produce content that attracts more attention and is more appealing to your audience in the future.
A high engagement rate may indicate that the audience feels connected to the brand and actively interacts with it.
Look at the number of posts for the period and the number of reactions to the post.
These are very important metrics for competitive analysis for several reasons:
- Determining influence: The number of posts and reactions to posts help you assess the influence of competitors on your audience. If competitors publish a lot of posts and receive a lot of reactions, it may indicate that they have a large audience and strong influence on their readers.
- Identify trends: The number of posts and reactions to posts can help identify trends in the industry. For example, if many competitors are posting about a particular product or service, it may indicate that it is a hot topic for the audience.
- Evaluation of strategies: The number of posts and reactions to posts can indicate how well competitors' strategies are working. If they publish a lot of posts but don't get a lot of reactions, it may indicate that their content is not engaging the audience.
Taking into account the number of posts and reactions to competitors' posts can help you understand their strategies and use this information to improve the effectiveness of your marketing efforts.
6. Analyse competitors' content on social media
Start analysing each competitor on the list. At this stage, analyse the most popular posts by likes, comments, and shares.
Brandvox also allows you to view all competitors' posts in one convenient feed. This is one of the most important tools that helps you understand how competitors work on social media, what they do well and what you should pay attention to in order to improve your own marketing strategy.
After that, look at the level of engagement by day of the week and the average number of posts on weekdays. This is necessary to determine which day of the week is the most effective for posting.
Depending on your target audience and various factors such as geographic location, profession, age group, etc., different days of the week may have different performance for content.
Determining the most effective day of the week can be done by analysing the statistics of posts that have already been published and its engagement rate.
All in all, determining the most effective day of the week for posting can help you improve the effectiveness of your social media strategy and achieve better results in promoting your brand or product.
Study the engagement of the audience with the posts on a page by media type, such as photos, videos, audio messages. This index can be useful for understanding how your posts are being received by your audience and for finding the types of media that are attracting the most attention compared to your competitors.
For example, if you notice that photos are getting more likes and comments than text messages, you should focus on creating more content in photo format. This can help to increase audience engagement with your content and boost its popularity.
Then analyse the text styles in the content - it shows the share of each content style in all posts by you and your competitors. Maybe you will decide to make changes in your content strategy. And also take a look at the main emotions in all the posts – it is crucial for understanding your brand’s tone of voice.
For example, if your audience responds positively to content that makes them laugh, you can focus on creating more humorous content in the future.
7. Analyse the overall activity of competitors on social media
Take a look at the analysis of the dynamics of the selected metric (posts, shares, comments, engagement levels) and the brands with the best performance in terms of the number of activities.
Pay attention to the number of likes, comments and shares.
8. Analyse the effectiveness of hashtags used by competitors on social media
Analysing the effectiveness of hashtags provides valuable information about which topics and keywords are popular on competitors' social media. This can help you develop a more effective media marketing strategy for your brand. The research also allows you to identify niches that have not yet been used by competitors and will allow you to attract a new audience.
Researching the effectiveness of hashtags can help increase sales and raise brand awareness on social media.
To work effectively with hashtags, it is recommended to follow three basic rules:
- Use relevant hashtags that convey the essence of the post. Don't limit yourself to using only high-frequency and medium-frequency hashtags. Use low-competition tags to attract more relevant audiences and increase your chances of getting to the top.
- Change hashtags for each post. Use customized tags for each post. Constantly changing hashtags can help you engage more people and increase traffic.
- Analyze hashtags. Change your Instagram account to a business profile to get access to statistics and check which post received more reach through hashtags and why. Remember that hashtags are used by people who are looking for something.
9. The next point is to describe your competitors' customer
Demographic, behavioural, and psychographic segmentation criteria can help you describe the target audience.
10. SWOT analysis and competitive advantage assessment
The last step of the competitive analysis is to make a SWOT analysis for each competitor. It is not necessary to make a detailed analysis, it is enough to specify 1-2 theses for each item of SWOT analysis.
Consequently, conducting competitive analysis is important to assess your market position, identify opportunities, create an effective strategy and reduce the risk of failure.
The analysis should be conducted regularly, because in order to find new opportunities to differentiate your product/services and better serve your customers, you need to be aware of what competitors are doing in the industry: from launching new products to strategic planning and using marketing tools.
However, conducting competitive analysis can be time-consuming and difficult, as it requires in-depth research of many sources and a large amount of data. One of the main advantages of using Brandvox is its speed and efficiency. Thanks to this, your company can spend more time developing and implementing marketing and business growth strategies.
In addition, Brandvox provides users with the opportunity to receive regular updates on the competitive situation in the market, which allows you to quickly respond to changes and adapt your strategy.
Brandvox is a tool that can greatly facilitate the competitive analysis process.
Try it for free now.