Becoming complacent in your business is very easy.
It’s easy to get swallowed up in the here and now. It’s easy to lose sight of what’s going on around you…and it’s very easy to do things the same way, because that’s the way you’ve always done them, and historically it’s always worked for you.
If this sounds like you, it’s time to change!
Business is fast-paced and very competitive, so being aware of your competitors and understanding their offering is essential to the development and growth of your business…and it will give you the advantage over others.
By no means should you ever copy a competitor, however knowing what they’re up to, their strengths and weaknesses, and regularly assessing their products and services against your own is vital to ensure you’re targeting your business correctly…and that your client both finds you, and wants to buy into your offering.
A competitor analysis is an official review of your competition that should be undertaken with an open mind, and in a positive manner. It will allow you to effectively assess their strategies against your own.
How to perform a competitor analysis
The best competitor analysis starts with a spreadsheet, a clear head, and a morning or afternoon of uninterrupted time. The spreadsheet should include the following assessment points:
Your competitors, and whether they’re local to you, or national – include their web address and social media links
The quality of their branding, and its consistency across their website and social media platforms
A summary of their products / services, their price points and inclusions
The quality and professionalism of their online presence
How do they market themselves?
Their strengths and weaknesses
When you’ve researched and recorded your competitor analysis, add your business as a column and carry out an honest analysis of your offering too. If you feel you’re too close to your business to do this properly, ask a colleague or trusted peer to rate you instead.
Once you’ve completed your competitor analysis, score your competitors overall (including your own business); you’ll have an immediate feel for which competitors are those that you should watch, and those that you can discount. I also find it useful to add five bullet points at the end of each competitor with your overall points so that you can remember at a glance your perception of them.
Why carry out a competitor analysis?
Performing a competitor analysis gives you the edge. Many businesses do not understand the value of this exercise, but because you do, you now know your competition’s strengths and weaknesses and you can base your marketing strategy and future planning around it.
All companies have a weakness in an area or two, and by recognising them, you can take advantage and jump on opportunities that come your way more effectively.
It’s a training opportunity, too. It’s the perfect reason to study your market each year and see developing trends – so if you’re planning to diversify or develop new products / services, you will gain an insight into whether the timing / product or service is right or not.
You will also learn what has / hasn’t worked for your competitor’s businesses and you’ll be able to apply your findings to your own, and develop your new ideas effectively.
How does this benefit the continual progression of your business?
We are all entrepreneurs and therefore have creative minds – when I carry out a competitor analysis, I find that my creative juices start to flow immediately; new ideas begin to form and develop, and I have the confidence to grow the right ones into actions due to my knowledge of what’s going on around me.
It’s a positive too, you will take away constructive points in which to better your company, and you will also realise how well you’re already doing – a definite win : win.
Do remember, however, whilst it’s incredibly important to understand your competition, don’t take your eye away from your own business. A competitor analysis is a tool to enable you to develop and grow your business, not become so obsessed with others and lose sight of your own goals.
Natalie Lovett is managing director of The Whitewed directory