Running a business, as you no doubt already know, is about much more than having products and services to sell. Survival requires constant planning, marketing and understanding your position compared to your competitors.
Knowing where you fit in the marketplace and being aware of what your business rivals are doing takes time and research, but it doesn’t have to be too difficult. These five simple steps will help you create a competitive analysis which allow your business to stay at the top of your game.
Step One: Make a List of Competitors
Depending on what your business does, you might have thousands of competitors. That immediately creates a huge time barrier, but you don’t have to look at all of them at once. Start with a small list of up to five businesses that provide similar products or services to yours and write a brief overview/description of who they are.
Step Two: Understand Their Target Audience
You can find out what customers your competitors are trying to attract by going online and looking at their websites or social media pages. If you’re able to collect physical copies of leaflets and brochures to go into a folder you can easily refer to, that’s even better.
Consider what their main marketing messages are, what demographic groups they’re aiming for and whether they have multiple marketing streams.
Step Three: Find Out How Much They Charge
If a major competitor is offering the same products and services as you at a cheaper price, you’ve got a problem. Also consider other payment information like installment plans, shipping fees and package bundles.
Step Four: Dig Deeper into their Marketing Strategies
Your marketing materials, whether online or in hard copies, are often the first thing that customers see. This means that in order to be successful, you’ll need to have a clear idea of not just your own marketing strategies, but your competitors’ too.
Take as many of their marketing materials as you possibly can and really go deep into what they’re doing to attract customers. What kind of social media posts do they write? How many likes and shares do they attract? Do they attend fares and shows? Do they use a couple of different advertising streams or work broadly across newspapers and magazines, TV and radio and online adverts? What promotions do they offer? Do they work in partnership with other businesses?
Step Five: Identify Strengths and Weaknesses
Conducting a SWOT analysis remains one of the best strategies for moving businesses forward. Think about what makes your competitors unique and might give them the edge over you, and then draw up a list of strengths and weaknesses for each business. Consider any areas where they fall down and create new opportunities for you, but also think about how it would impact on you if they manage to turn a weakness into a strength.
Once you’ve done this for all the competitors on your list, do your own SWOT analysis for your business. Understanding your organisation the areas in which you do your best and worst is essential for creating a solid and informed strategy for success.
For practical support with your own competitive analysis contact Ethos today.