You can easily anticipate gaps in your industry and identify new trends when you keep an eye on your competitor, making you know the tactics to become successful in your online business. However, just following your competitor on social media isn’t sufficient enough to understand how they work. You’ll need to conduct a comprehensive competitor analysis to gain the necessary insight. In this post, we’ll show you how to conduct one but first, let’s understand the concept of competitive analysis.
What Is Competitive Analysis
Competitive analyses involve identifying major competitors in your industry and researching their marketing strategies, brand, and sales. The essence of conducting competitive analysis is to help you create an effective business strategy to outperform your competitor. If you are looking to improve your business and marketing strategies through competitive analog, here are some benefits you should know.
Benefits Of Conducting Competitive Analysis
Competitive analysis helps you identify drawbacks and potential opportunities in the competition and take full advantage of them.
- It helps you work in line with industry trends and ensures you keep meeting up with standards in your industry.
- It helps you evaluate the uniqueness of your brand, which you emphasize in your marketing efforts.
- It helps you understand how your competitors work, what they are doing right and what they’re not to help you create effective marketing strategies that sustain your business.
- It helps you identify new areas in the marketplaces where your competitors haven’t explored.
- It helps you create a standard that you use to measure your business growth.
Now that you understand how important for your online business, let’s see you can conduct a competitive analysis for the business.
How To Conduct a Competitive Analysis
Conducting competitive analysis can provide benefits for every business and result in successful business growth. Here are ways to conduct a comprehensive competitive analysis.
Determine Your Competitors
This is important to help you know who you are competing with; know that what works for other similar brands may not work for yours. You can get relevant competitors by searching on Amazon, Google, and Alexa about your brand. After that, you divide the competitors into two categories; primary and secondary competitors. The primary competitors are the ones that have similar products and operate in the same location as you. The secondary competitor provides a different product that satisfies the same need that your product satisfies. The primary competitor is whom you should focus on. However, you shouldn’t toss out the secondary competitor entirely; keep them at arm’s length as shifts could happen anytime and they become your primary competitors; that’s you’d want to perform competitive analysis periodically to avoid being taken unaware.
Create A Spreadsheet
You would enter the data you will collect for your competitors into the spreadsheet. The essence is to compare and contrast the competitors. You can create a list of criteria you’ll use for the comparison, such as products offered, price range, social media engagement, first-time visitor bonuses, content for generating leads, etc.
Determine Your Competitors Product Offered
A product or service is the heart of any business; you should also analyze the prices and bonuses attached to those products. Determine if they are high or low-cost providers, their sales strategies, product uniqueness, and volume of products.
Analyze Their Sales Tactics
Narrow your analysis to the following factors;
What is their sales process? What platforms do they use? Are they trying to expand? Do they use multiple channels for sales? Do they partner with others? What’s their total sales volume? This information would help you understand how strong the competition is.
Check Out Your Competitors Pricing
It’s vital that you know much your competitor charges for similar products or services. If you offer more superior quality, you can have a higher price; however, you’ll need to explain why the price is higher than similar products. Setting the correct price for a product can be tricky, but it’s best to conform with industry pricing to ensure prospective customers see the prices reasonably and fairly. Check out the bonuses your competitor offers, such as free trials, discounts, etc., and provide unique bonuses to attract your potential customers.
Ensure The Shipping Cost Is Competitive
Do you know that high shipping cost is one of the major reasons why people abandon their carts? Some businesses use free shipping as a way to generate more sales. You check out the shipping cost and make sure yours is competitive. If you cannot offer free shipping, you could consider other ways to attract customers, such as giveaways or loyalty programs.
Analyze Your Competitors Engagement Level
Analyze the kind of content your competitor posts and how their target audience responds to it. Check out comments, both positive and negative, and check the topics with the highest engagements. Also, determine how they market their content, whether it’s with keywords, hashtags, social media ads, internal linking, etc., to help you know what to focus on.
Perform a SWOT Analysis
As you conduct your competitive analysis, note your competitors’ strengths, weaknesses, opportunities, and threats. Compare their strengths and weaknesses against yours to help you discover areas that need improvement. You may not be able to control opportunities and threats, but you can plan for them.
There you have it! Above are some tips to conduct a competitive analysis for your online business. Competitive analysis helps you identify the areas that need improvement so your brand can excel. So if you’re considering conducting one for your business, you should get started already. Contact us today at Fulfillman to know more about the services. Our dedicated team will be available to speak with you and discuss your possible dropshipping options. Our experts will provide suitable answers to your questions and concerns. We guarantee you excellent services.