At BottomLine, we’re big on research and data. You’ll see that theme woven in everything we do, from your Impact Assessment all the way to your Strategy. That’s because we know that good marketing and copy is rooted in insights, and far more than words on a page. When you deeply understand what is at the heart of your customer’s behaviour, decisions, and desires, along with where you shine (or fall short), you can create the plan to perfectly match. The result? Maximized ROI and far more bang for your buck.
The Importance of a Competitive Analysis
One of the key pieces of research that cannot be sidestepped is a competitive analysis. Just like you need to deeply understand your customers, you must also understand who plays in the same space. What do they do well? What are their opportunities? How does your company differentiate from the rest? Without this insight, you’re at risk of being another carbon copy—and copies don’t translate to dollars.
The goal isn’t usually to be like others in the business. Instead, you want to find your niche or strength and play that up. You can’t be everything to everyone, and you don’t want to be. And you can’t begin to know what the opportunities are if you don’t understand your competition.
When to Do a Competitive Analysis
When starting a new business or rebranding your current one, an evaluation of other market players should be one of your first steps. It can even be a good idea if you don’t fully have your business model finalized! Sometimes, knowing what gaps that need filling can help you develop the right product or tactic to address them.
But don’t forget that the market changes, and that you need to change with it. It’s also important to conduct periodical analyses to see what has shifted and how you might need to adapt.
How to Do a Competitive Analysis
Let’s break down the steps in a good competitive analysis.
1. Identify the competition.
Although this may sound easy, competitors come in many forms. You want to list the obvious direct competitors that offer similar service or products as you, but you also want to identify your indirect competitors and your replacement competitors. Indirect competitors offer products or services in the same general category as you (coffee vs tea, for example), while replacement competitors don’t offer the same product or service at all, but are after your same customer (an energy bar company trying to get customers to choose a different way to wake them up, or a detox company trying to promote a coffee fast).
Coming up with the full list can take some out-of-the-box thinking and creativity.
2. Research critical data points.
For each competitor identified, it’s time to outline their approach. How does their product or service compare to yours? What do the reviews say, both good and bad? What is their marketing approach? Where do they place their ads? What geographic area do they serve and how big is their company? How big is their market share?
Now that you know who your competitors are and what they do, it’s time to rate each element when compared to you. A spreadsheet or chart works great for this. List out all the attributes you researched in the rows, and then you and your competitors in the columns. Give yourself and each competitor a rating (1-5 or 1-10 is common) for each element. For any particularly low or high scores, reflect on what earned them that rating.
From your comparison, where do you stand out? What are your relative strengths when compared to your peers? Alternatively, what are your peers’ weaknesses that you could solve with your offer?
Once you identify your area of focus, now you can develop your content, marketing, and business strategy to highlight your differentiators to the customers that need them.
Tools You Can Use
There are many tools available online to help with your competitive analysis. Hubspot, for example, offers some templates to get you started, alongside their paid Competitor Analysis Tool. Similarly, Semrush has a Market Explorer tool that can analyze web and ad traffic.
While these tools are indeed helpful, keep in mind that they don’t (and can’t) encompass all aspects of a thorough report. You will still need human expertise to dive into the more nuanced elements.
Call in the Experts
If doing your own research sounds daunting, or if you’d rather save the time to focus on other critical pieces of your business, we can help! Our team of experts are well-versed in competitive analysis, and are happy to help you gain actionable insights. In fact, we take business from idea to implementation, and can leverage our hard-earned data on top of the additional research we do for you.
Case Study: Verge Ag
When Verge Ag came to BottomLine, they had just acquired a software solution that was set to revolutionize the way agriculture was done. Despite the desire for their solution, however, the demand was way less than it should’ve been. Verge needed insights—what was getting in their way?
Through research, particularly a competitive analysis, BottomLine determined that Verge was not internationally recognized and not yet trusted by the international market they were trying to tap into. Through analysis of other players in the market, it became clear that Verge needed a full rebrand to attract the clients they wanted.
In fact, Verge wasn’t even their name! But, insights clearly showed that a name change was also necessary to gain market share.
It was the competitive analysis that highlighted the opportunities and gaps that lead to a laser focus on the right priorities. The result? Multi-million funding from investors and an 800% increase in profit.
Having the right insights that come from the right research is often (if not always) the key differentiator in a business’ success. At BottomLine, our entire foundation is rooted in research, so we can help you toward the same results that Verge was able to realize.