Competitor analysis practical instruction. In today’s world, few businesses doubt their ideality.
By default, most believe that competition is for the weak. Or, as women say: “Jealous?! So I’m not sure of myself.”
But seriously, the analysis of competitors hides all the most important in itself. After all, we are fighting for the same customers. Therefore, you need to know everything about the activity of competitors to do better.
KNOW BY SIGHT
With the idea that the analysis of competition in the market is good, you have already accepted. Now the next step is to find those “enemies of the people”.
And as practice shows, many companies incorrectly put accents, and in consequence are included in the race with companies that will never stand next to them.
In order to truly understand who your competitor is, you need to start by identifying groups of target audiences. you need to find people with potential for you.
Then, You decide between what companies choose these clients. And only then will you truly see which companies are fighting for the same customers as you. These will be your key competitors.
Please note that if you are not a Federal company. Then you should not set a goal to defeat the world’s monsters.
I don’t want to offend you, but most likely Your entire advertising budget (as well as ours) for Federal companies is a miscalculation error.
You need to be smarter and aim at your client, and not try to fight them for one market.
In addition to the key competitors, you have direct and indirect. For you, these are direct Federal networks and other companies. For whom or for whom You are too tough.
Indirect-those companies that can by coincidence in the world become your direct competitors. Or those businesses that are fighting for one budget of Your client.
But at the same time they work in another field (for example, you are a restaurant, And your indirect competitor is a cinema).
Important! The frequency of analysis is formed based on the dynamics of the market. The more and more often there are changes in your field. The more often you will have to assess the situation of competing businesses.
“I know all about them ” is the most common phrase we hear when collecting information about competitors in marketing consulting or marketing analysis.
In this case, we have dozens of questions that the bullets will solve the client. And show, that he not immortal and his excessive self-confidence only hurts him.
Comparative analysis of competitors is not a game of”I Know — I don’t know”. This is a systematic approach consisting of techniques, tools and a huge number of tables and graphs.
Therefore, we throw the school approach in a corner and talk about the analysis as adults. And to do this, we need to separate the two concepts that we will use in the process.
1. The subject of study-part of the analyzed business.
2. The method of study-approach to the analysis of the business.
If rough, then You should divide the concept — “What is analyzed?”and” how do we analyze (evaluation criteria of competitors)?”.
To complete the picture, we will consider both. So get ready for a huge number of boring-interesting (Yes) words and sentences. And we start with the subject of analysis, as it forms the basis of the method.
SUBJECT OF STUDY
Depending on the goal of analyzing the competitive environment, you will have different evaluation zones. It is possible that you from the entire list will come in handy just one subject of study.
But for sure, if you study more, it will not be superfluous. Of course, no one will Pat you on the head, but there will be more money.
Competitor analysis why it is needed
1. Basic information
In the beginning of the analysis all in the army: “Weight, height, year of birth?”. We study the introductory information to form a General idea of the players on the battlefield.
Most likely you already know all the information, if not the first year of work, but we recommend to remove these thoughts. Because the world is changing,and so are the competitors.
The more serious the competition, the more introductory information You need to collect. Since every detail can be a way to differentiate.
To make it easier for you to understand what I’m talking about.
Сheck out the list of recommended basic information to collect:
- Year of foundation;
- Market share;
- Working money;
- Key client;
A separate point I want to draw attention to the strategy of the company. In the analysis, we need to look further than “now”.
Of course, it’s more important for everyone to get the money right now. But we must not forget that business is not a sprint race, it is a marathon. Where the winner is determined at the end of a long journey.
And if you do not foresee it, then maybe now you will be all right, but in a few years will go down the drain.
2. Product matrix
The first thing You need to start exploring is the company’s product as everything grows from it. Not marketing, not sales, namely the product.
People go for the service and goods, and only then go to the company. Having studied their offer, we will be able to understand how the Foundation of your company is competitive.
You should study the product from all sides, paying attention even to details. This will help to find Your unique difference not only at the global level, but also in great detail.
If you make a basic list of zones that You should pay attention to, it will look like this:
- Warranty support;
- Implementation format;
- Degree of fame.
Moreover, it is necessary to evaluate not only the main category of products, but the entire product matrix.
You need to understand what are the main products, the additional sales of, products-locomotives, premium products and so on.
You study everything you have your hands on. After all, if you have conducted ABC and XYZ analysis. You know that there are situations when the main profit is made by products from which you do not expect it.
To make the analysis of goods and services of competitors more effective, it is recommended to make out all this business in the table or the schedule.
But again, all at your discretion, because it will be issued in the end does not matter. You do everything for yourself, not for the report.
Each product has its own value. Of course, it consists not only of the cost, as is commonly believed.
The larger the company, the more there are other costs, including overpayment for the brand
Therefore, first of all, you need to find out what is included in their cost and what profit.
Then you need to go to the client’s side and evaluate the fact of the final cost, because the cost is not important for the consumer. He sees the final value and already determines it-Yes or no.
Most likely, the analysis of competitors ‘ prices at the output you spend quite often, as it is for many and there is an analysis of competition in the market.
A separate item is recommended to analyze the discount policy. If you have successfully passed the stage of studying their cost (even approximately).
You can already understand where they have such discounts or Vice versa why they are not. In the absence of the ability to reduce cost, try to transcend their other differences.
Marketing is a huge topic for analysis. 100% You will never learn. This is due to the fact that you never know exactly where the budget is now directed from the media plan of the competitor.
However, marketing is the front door of the business. And how well it is Packed and formed depends on the customer will go to You or to them.
3.1. Basic marketing
The first marketing analysis of competitors should begin with the study of the Foundation of their approach. We need to understand how they serve themselves and”what they breathe”.
In other words, you analyze the company’s brand. Even if it at first glance is not, You still need to understand at least what they are going.
After all, we must remember that the analysis gives a vision not only tactical but also strategic.
Pay special attention to positioning, target audiences, submission, offer and unique trade offer.
These are 5 sides, which we pay attention to first of all after the competitors ‘ strategies.
Provided that your competitors are big players, also be sure to look at their corporate identity and company mission.
On the other points there is no sense to continue, as the topic is obvious and does not require disclosure.
Competitor analysis is a great plan
3.2. Attract customers
We had a client who was led away by a competitor right from under his nose. He did not exceed his budget, he bypassed his mind.
Namely, he was always one step above our client. If it is contextual advertising, the competitor was one position higher.
If it is a promoter, it was a few meters closer to the traffic. And so in everything, to the point that he placed the banner right on the main turn to us.
If You don’t want to be on the site of our customer (of course, things are different now). Then you need to be more aware than your opponent.
You need to always be one step ahead. To do this, you need to constantly be on the move, based on what other players in the market are doing. Therefore, the analysis of the competitor is simply vital.
In order to determine the quality of advertising competitor, you need to find all of its advertising materials and individually each evaluate the effectiveness.
On this topic we have a full article, so be sure to read it after that. Here is the link ” analysis advertising”
3.3. Customer retention, monetization and return
The most favorite part of the business of all entrepreneurs — is to attract customers. In 7 out of 10 cases, during consultations we hear the question “ ” Where to get new clients?”.
I have the feeling that they light a wedge has converged. And this is a misconception wanders from year to year.
And in vain, you can increase the capitalization of the company without attracting customers. To do this, you just need to work correctly with the customer base.
And most likely Your competitors do not miss this opportunity and use everything in full. Therefore,you need to study all possible additional actions in the field of marketing Of your colleagues.
As usual, I provide you with a basic list of zones for analysis:
- Email marketing
- Autovariance sales
- Price list
- Commercial offer
- Merchandising and POS-materials
- Marketing kit
- Master classes
- Additional gifts
This item you should get the most voluminous, as it includes all marketing activities that are aimed at customers.
As well as the marketing consists of among them more than 5,000 tools, you admit that all You find and will not work. However, you need to go through all the main points of contact and isolate what’s good in their marketing.
Marketing is just a tool to attract customers and increase their desire to buy. Everything else in the classic business is done by people and sales tools.
Therefore, you need to know everything about sales in a competitor’s company. and, like marketing, this part is roughly divided into several parts.
For business it is very bad when customers work with people, not with the company. But from the point of view of analysis, You need to approach from this side.
To really see what exactly is in the employees that consumers work with them, not just with us. Here the list of analyzed items can be as follows:
- Personal quality;
- Manner of communication;
You need to learn all about their team. It is possible that their entire business is held in public. For example, because they have specialists with very famous names.
For You, this means that if you do not strengthen yourself with no less famous people, you will have to sweat in the struggle for a place under the sun.
4.2 sales Tools
In paragraph 3.3, we looked at tools that also help sell to employees. But here we will talk about something else.
In marketing, these are tools that communicate directly with customers, and in this case we are talking about actions and materials that operate only within the company and the client does not see them.
In simple terms, I will call it “sales audit”, in the most classical sense of the phrase.
You study everything that makes their sales managers the most effective and motivated for the result.
I recommend starting with the following points:
- Motivational scheme;
- Sales scripts;
Only the sales scripts You will be able to assess without any problems. To study the rest without the sent Cossack, a Trojan horse or other cunning ways of introduction in the back of the enemy, practically it is not possible.
You simply will not be allowed inside the company, and the answer to the question “ ” Why?”, quite obvious – ” Because.”
But if you really want, you can fly into space, and this information to get. Proudly say, tested on our customers.
5. Conditions and business processes
When you know everything about the product, marketing and sales, you are missing the last part of the puzzle, their conditions and business processes.
Part of this information you will get when studying the previous parts of the business, but here you again (or again) need to look at the whole thing from the other side.
Examine their logistics, learn their trade, learn their possibilities on granting of delays, instalments, product implementation.
You need to study all their working conditions from a needle to a rope. Let, some of them are not so important for the client, but if the company does it (especially, which is better than us). That means she understands why she needs it.
The most obvious way to learn about conditions and business processes is to go all the way from a to Z. from call to purchase, and even better, to return/reject the product, if possible.
And be sure you have to be the most meticulous customer to be served fully and you see all parts of the business.
This way you will be able to understand how to improve your working conditions.
- You’ll implement faster delivery than they do,
- or introduce interest-free installments for 24 months when everyone has 12.
- And also be able to improve your business processes to make a difference from them (this is one way to differentiate).
- Either increase efficiency or reduce costs.
In today’s world, there are dozens of methods to conduct competitive market analysis.
There are even those that are held for several months. We will study the simplest and at the same time the most effective methods of competitor analysis for conventional classical business.
Leave the complex and voluminous processes to us, because this also needs to be learned. For one article, moreover, without a mentor, it is very difficult to do it.
Bad news. In this article, we will not be able to consider in detail all methods of analysis of the market of competitors, as each of them will take more than one thousand words.
Therefore, we will analyze the concept, and if you are interested in one of them, read more in other articles
1. Comparative analysis
The most simple and scale (in terms of pages) method of analysis of the competitive environment.
You define the evaluation criteria (and based on the text above, you realize that there are hundreds of them) and compare yourself with each competitor in the form of a table or graph.
You can rate on the principle of ” Yes/No”, “There / No” or in a digital value from 1 to 10. I prefer the second option, as it is more transparent.
Competitor analysis comparative analysis
The main disadvantage of this method is that some aspects of the business can not be objectively evaluated by categorical or digital criteria.
Also, you can evaluate only the current situation at the moment, and not see what can happen next, what can be the threats and risks.
And this, too, need to know, so as work you are planning clearly not one year.
Comparative competitive analysis can be carried out as within the whole company. And within the framework of a specific tool to obtain more reliable information.
But this time will take several times more, perhaps even dozens of times, so properly prioritize.
The most popular method of analysis of the market and the main competitors. Classics of the genre among the analyses, which is still taught in universities.
Its meaning is that you compare yourself with a certain competitor in 4 parts:
These four parts are divided into external and internal. This method already sees a wider picture for the future.
I like this approach, but it also has drawbacks, as there is no digital assessment.
And we rely on our subjective opinion or conclusions of independent experts, which can also be wrong.
As a result of a questionable “Eat/no” assessment, you can focus on not what you need and spend time searching for non-existent treasures and eliminating Ghost pirates.
Someone says that SNW is an advanced SWOT analysis. But in fact, this is another model that focuses on the analysis of the internal environment of the company.
That is, if the SWOT analysis analyzes strengths and weaknesses (2 of 4 parts), then in the case of SNW you are still studying the neutral sides of the company.
In practice, this helps you to find the competitor’s points in the normal (neutral) state.
For You, this means that you can make them your competitive advantage if he does not pay attention to them.
This analysis is suitable for small business to a lesser extent, as its focus is on strategic comparison. So if you’re not really turning now on the subject of strategy.
It is better to go back to the SWOT or benchmark analysis. In addition, SNW-analysis makes an assessment on the principle of good/normal/bad, which is also not an accurate measurement of tactics.
In marketing consulting, we always start with the analysis of strengths and weaknesses of competitors. Usually because of this we get a lot of stones in our direction from the owners.
Since they do not see the need for this and believe that we are wasting their money. And you will be surprised (or maybe not), but there will be no good end to this story.
After the analysis, no one says “thank you ” to us and still consider it a waste of resources.
There is a phrase: “You had to fight evil, not join it.” We just treat those who go against the current.
Let us lose customers, because they allegedly did not see the result in the first month of work. But we will continue to analyze competitors and the company at the beginning of the work.
Hoping to find true connoisseurs of smart approach, where every step is done not because it is” fun”, but because it is justified. Without analysis this is not achieved.
You’ll forgive me, but most of you won’t do the analysis wisely. You have a thousand excuses to do it later.
As my friend says “”I don’t get paid for this bet, so let it be your way.” Therefore, I will not persuade you, but to somehow smooth the situation.
I have prepared for you a list of minimum actions to move consciously at least at arm’s length.
- What is the positioning and unique selling proposition?
- What channels of attraction are used?
- By what criteria is their product better than Yours?
- What is the pricing and discounts for the product?
- How well do managers sell on personal contact?