If you read our first blog about competitive analysis, you know that we are all about knowing your business competition. But when it comes to looking at others in your industry, is it clear who else your customers might turn to? Or are you looking at your direct competitors and missing key opportunities to gain new clients?
For now, we’re focusing on three types of competitors to look at when you run your competitive analysis.
Direct competitors can be thought of as your ‘equals’. These are companies that solve the same problem for the same people that you do. They likely have a similar target demographic and offer products or services just like yours. While there are bound to be little differences here and there, your direct competitors are the key companies to keep an eye on.
What does this look like in real life? Think about Netflix and Amazon Prime Video. They both stream shows and movies offered by other networks. Likewise, both create their own shows and movies. They even take turns with the rights to show many of the same films and series.
So, in your industry, who are your direct competitors? What are their strengths compared to yours? What about their weaknesses? Always keep an eye open to what they’re doing, so you can set yourself apart.
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These competitors offer a similar solution to yours, although not exact, and they target the same customers you do.
In the above example, an indirect competitor to Amazon Prime Video or Netflix would be a cable television network. There’s no streaming available, but customers have a choice between streaming or just watching whatever shows they like on TV. It’s a different service with a different outcome, but customers still end up entertained by a movie or series.
These “competitors” are alternatives to your business. They consist of straightforward replacements or stitching together multiple tools or solutions.
In the above example, it could be that potential customers opt-out of streaming services or cable. Maybe they prefer the local theater and stay up to date on what performances are going on nearby.
While this may seem like a very different competitor to a streaming service, it’s an alternative solution that some people choose. Having an awareness of the other options out there is crucial to business success.
Steps Toward a Successful Competitive Analysis
Once you have determined your main competitors, it’s time to dig into the competitive analysis. Start with Customer surveys. Learn what your customers like about your company and what they wish could be different. Find out why they choose you as opposed to other brands offering something similar.
Next, take time to review your Competitor’s website. See what they highlight online. Are their branding colors bolder than yours? More comforting? Is their copy stronger? Do they have clearer calls to action?
Finally, you need to research your Competitor’s reviews. What are their customers saying? Are they content with their purchases or is something missing? Where can you offer a better alternative?
Taking the time to look at these details is extremely important to business success. And if you need a hand with your efforts, Planify™ is here for you.