How to evaluate your competition

When it comes to building a successful business, there are many things to consider. Strategy, growth, pricing, marketing, recruitment, finances and HR should all be on your checklist. However, understanding your position in the market and how you differentiate your business from the competition is vital and should be reviewed regularly.

A proper competitor analysis will give you an insight into the market you operate in and any potential gaps you can fill.

It will help you better understand your competitors, their strengths and weaknesses, what they bring to the table and how you compare.

Crucially, it will enable you to understand your target audience, what they want from you and how your product or service can meet their needs and add value.

With this information, you can refine your brand, drill down into what makes your business unique and ensure your messaging connects and resonates with more of your ideal customers.

But, when it comes to competitor research, how do you do it, and where do you start?

It sounds expensive, right?

Thankfully, there are a few simple steps you can take to do your own competitor analysis.

Do these, and we guarantee that by the end of the process, you’ll have all the insight you need to make your business stand out from the crowd and differentiate yourself from the competition…

 

Step One – Identify your competitors

Identify the competitionLet’s start with the basics. The first step is to fully understand the market you operate in and who your main competitors are. They might be the big players who dominate the market with products or services with mass appeal. Or, they may be smaller companies with a niche or value-add solution that complements the primary market offering. Chances are, it will be a mixture of the two.

At this stage, it’s all about working out who your main competitors are, who your secondary or indirect competitors are, and also any outliers who offer different products or services to the same customer base as yours. If you know who to monitor, you can gain a deeper understanding of how you differentiate from the competition.

 

Step Two – Profile your competitors

The second stage of the process, once you’ve identified who your competitors are, is to gather as much information about them as possible, so you can build an accurate profile of each one.

Things to consider here include:

  • What products or services they offer?
  • How are they priced?
  • Do they offer any complementary services, such as servicing or aftercare?
  • How do they do their marketing – is it online, offline or a mixture of the two?
  • What does their brand stand for?
  • How much market share do they have?
  • What’s their reputation like?

 

Armed with this information, you can start to build a profile of the market and where your business sits within it. Make sure you keep all your research in one place, or you can download our competitor analysis template here.

 

Step Three – Do a SWOT analysis

In case you’re not familiar with the term, SWOT stands for Strengths, Weaknesses, Opportunities and Threats.

This stage is all about looking at each of your competitors to establish what they do well, what they’re not so hot at and what opportunities this might present to your business.

It will also help you to understand where the main threats are coming from and which of your competitors you may need to keep a close eye on.

Don’t forget to add yourself onto this list. This will help you see how you fit and highlight where you can differentiate from the competition.

 

Step Four – Reach out to your competition

This one may sound counter-intuitive but building positive relationships with your competitors may pay dividends in the long run.

It will keep things cordial for one thing but may also give you a better understanding of what they do, and how it compares to your own offering.

It could also lead to opportunities for collaboration on future projects, partnership working on industry issues, referring clients who they can’t service, or other ‘win-win’ situations.

The key here is defining your offer and developing an ‘abundance mentality’. In most market sectors, there are plenty of customers and enough work to keep everyone happy, so place your primary focus on your ideal audience and leave the rest to someone else.

 

Step five – Identify your USP

USPGaining a thorough understanding of your marketplace will help you identify and define your business’ competitive advantage or unique selling point.

It might be price. It might be value. It might be a product or service innovation that disrupts the market because nobody else is doing it.

Whatever it is, once you’ve worked out your main strength, this is what your message needs to focus on.

How does it meet customer needs?

How does it make their lives easier?

Why can they live without it?

Once you’ve worked out what differentiates you from your competitors, you can develop your competitive edge and, ultimately, start to win more market share.

 

Let Koa Consulting help

When it comes to understanding your competition and working out your competitive advantage, it can be difficult to know where to start.

That’s where Koa Consulting can help.

We offer a competitor analysis service to provide you with all the insight you need on your market, your competitors and the opportunities that lie ahead.

We can also provide you with a sales and marketing strategy, complete with actionable steps, to help you grow your business and achieve your objectives, whatever they may be.

To make a start, get in touch today for a free consultation.