Competitive analysis can be addicting. If you’re a digital marketer working with a client, you might start by simply checking a competing website’s backlinks.
However, before you know it, you’re scouring every single one of the competition’s social media followers, scanning their interests and extrapolating imagined purchase histories in an attempt to etch out a tiny edge in the market.
When you finally take a break, you realize that you’ve been steeped in granular analysis for 3 days straight. Sure, you might’ve come up with a new angle, but you forgot whom you were working for in the first place.
Make no mistake – competitive analysis is a necessary part of any marketing plan. You need to understand your competition’s strengths and weaknesses, the demographics of customers, and barriers to entry, but if you let it overwhelm you, it’ll undermine all of your efforts.
(And if you need a little help with your brand’s competitive analysis, contact SPINX).
As with many things in life, the best approach is a balanced one. To keep you on track, here are a few advantages and disadvantages to remember as you conduct competitive analysis.
Perhaps one of the biggest benefits to competitive analysis is the identification of undeserved gaps in the marketplace. These aren’t always easy to spot, which is why it may help to plot out a matrix. By listing your competitors and their unique service models, including ranges in product quality, price and customization, you can locate untapped areas of your market. For example, after the raw info is plotted in the matrix, you may realize that high-end brands charge premium prices on their website, while the market’s discount segment goes undeserved.
From your matrix analysis, you can start to aim your marketing efforts accordingly. Does that untapped segment use social media? Will they respond to a contest on Facebook? Now that you have a target demographic, organize your tactics.
Trends represent a broad view of the industry, but they can provide helpful information. In fact, understanding trends in your market is critical to meeting customers’ needs and staying relevant. If you’re an online men’s retailer, it certainly helps to know that the competition may offer free shipping, humorous email blasts, or discounts through social media. Do customers seem to be responding to these trends? Can they work for you, or if you already implement them, can you model them after your more successful competitors and improve upon them?
Likewise, if you realize that everyone is offering the same thing, perhaps this is an opportunity to turn against the tide and offer something counterintuitive that people may want. As noted here, a small record label might discover that its competitors exclusively release music digitally. As a result, the label could hit an untapped market for vinyl.
Establish best practices
Studying the competition can help you figure out best practices for your market. If your brand needs a website re-do, for example, you’ll probably notice that industry best practices dictate clean, easy-to-use user interfaces. This is what’s in fashion, and you probably shouldn’t try to buck the system with a uber creative but impossible to navigate redesign. There’s no need to reinvent the wheel; give people what they want.
However, you also shouldn’t simply copy the competition. This is where the analysis comes in. Figure out where other companies’ sites have fallen short and provide something new and valuable while still within the arena of usability.
False sense of security
Analytics tools are powerful. Many of them let you drill down your data to see how a very specific digital marketing asset is performing within your campaign, and with any luck, you can hold this up against that same asset of your competitors.
Let’s say you compare website conversions and find that you’re outperforming the competition. Congratulations! You’re superior!
However, without a broader view of the market, you may fail to grasp that everyone is performing at lower-than-average levels. The takeaway here is to never perform competitive analysis in a vacuum. Every thread is woven into a greater whole.
Lack of innovation
Competitors can provide some valuable insight. Whether you identify a gap in their strategy or they cause you to self-reflect and tweak your own campaign, the value of following the competition can’t be overstated – as long as you don’t follow too closely.
Truthfully, you might see some gains by emulating another brand’s campaign. There’s nothing wrong with borrowing as long as you make the borrowed thing your own. But true innovation never happened by ripping off the work of others. Dramatic results come from dramatic contributions to the market. You have to disrupt the norm in order to stand out, which by definition means trying something bold, or at least putting a new spin on an old trick.
Competitor insights are helpful as long as you know what to do with them.