Why Competitive Analysis?
The purpose of competitive analysis is to find ways to improve your own company value proposition. Ultimately, knowing how your company, website, or products differ from your competitors is only useful if you then use the insights gleaned to make changes. Your goal is to find the key insights that can lead to changes to your brand or products to make yours more inviting than your competitor’s.
If you’re not interested in making changes, feel free to stop reading this article. But if you want to learn how to compare your company, products, services, or website to your competitors so you can improve your own, then read on.
Preparation is the difference between a useful, effective competitive analysis that provides relevant insights and one that is simply an exercise to fill time.
1. Talk to your customers (both reps and end-users) to identify your direct and indirect competitors.
Don’t assume you know who your true competitors are. Most customers, if you take the time to interview them, are delighted to share their thoughts both on your company and your competitors. Customers will provide incredibly useful information for conducting a competitive analysis. Pay attention to your customer-reported competitors and you may learn something!
2. Evaluate: Breakdown competitive information into qualitative factors to measure.
With the research phase complete, organize the data so that you’re able to break down information into qualitative descriptors–adjectives or ways in which your customers described your brand and your competition. For example, if a customer relayed that a direct competitor has better website functionality than your brand, create a factor in your competitive analysis that tracks website functionality across competitors. What makes competitors stand out against your brand? A good question to keep in mind during the research phase, and great questions to ask your customers are What makes the competition better? How could my brand improve customer experience?
3. Analyze: Quantify your data to reduce subjectivity.
After collecting the qualitative information and breaking it down into different factors to measure during your competitive analysis, quantify each qualitative factor. Depending on the focus of your competitive analysis, a factor that becomes apparent during the evaluation phase — the importance of website functionality, for instance — may seem more important to customers than social media presence. In this case, providing a numerical ranking for different factors based on the feedback you’ve received from customers will help minimize subjectivity in the qualitative data. So, website functionality receives a collective 0-5 value (0 for no website functionality, 5 for outstanding website functionality), while social media presence would receive a collective 0-3 value (0 for no social media presence and 3 for outstanding social media presence). Therefore, the more points accumulated at the end of the process will translate to
greater brand strength.
No matter your strategic objective, making sure to hit these three steps will lead you in the right direction for evaluating your business qualitatively and quantitatively.
Need help with your competitive analysis? Our Riithink experts can conduct strategic analysis of your brand. Contact us today for more information!