What is a competitor analysis?
A competitor analysis is when an organization sets out to evaluate and categorize their market or industry competitors to have a better understanding of their strengths, weaknesses, and processes with a direct contrast to their own. These competitors will have similar services, pricing, products, strategies, or audiences and should be evaluated based on a predetermined set of business criteria.
When done correctly, and with the right competitive intelligence tools, a successful competitor analysis makes it possible for a business to see competitors through the eyes of shared customers as a way to identify areas to improve for continued success.
Steps of a competitor analysis
As an organization conducts a competitor analysis to evaluate other companies, products, or marketing strategies, it’s important to follow these steps for the analysis to be as useful as possible.
- Choose the competitors to analyze within a sector or market
- Determine the aspects of a competitor’s business to analyze
- Narrow down where to start looking for the data, whether it be their website, within search engines results pages, financial reports, or social sources
- Apply insights to the business model as ways to improve and grow
Basic elements of a competitor analysis
What a competitor analysis will look like will depend on the industry a business is within. The common elements that are typically included in a competitor analysis are:
- Website features: search tools, design, menu layout, product images, calls to action
- Customer experience elements: mobile design, customer support workflow, checkout process (if applicable)
- Social media strategy: platforms used, posting frequency, customer engagement
- Content marketing: content types, posting frequency, SEO strategy, link building strategy
- Marketing initiatives: promotion types, discounts, or coupons
- Email marketing strategy: abandoned card campaigns, newsletter, promotions
- Customer reviews: common complaints, the language used to describe products/services
Benefits of conducting a competitor analysis
Whether conducted by business owners, startup founders, marketers, product managers, or entrepreneurs, there are many benefits to seeing a competitor analysis through from start to finish.
- Narrow down the ways a business, service, or product needs to be improved
- Remain up to date on marketing trends, industry best practices, and product offerings
- Provide insights into how to adjust processes to better serve an audience or group of customers
- Uncover new strategic opportunities to improve products or services
- Better set benchmarks and measure future growth of an organization
- Come to more informed decisions
- Discover new ways to speak to customers
- Reveal where competitors are throughout every stage of business
Competitor analysis best practices
Before a business begins a competitor analysis, an understanding of the best practices involved is key to ensure no data is left uncovered.
- Understand who the direct (offering the same service or product in a similar geographical area), indirect (offering the same service or product in a similar area but serving a different need or audience), and tertiary (offering a product somewhat similar but doesn’t compete) competitors are
- Conduct the analysis over the course of multiple days
- Learn the technology or software a competitor is using
- Deep dive into a competitor’s website, customer experiences, pricing models, social media feedback, online reviews, company culture, and market position
- Pinpoint the ways a competitor is unique and what is being advertised as their best quality
- Use tools to continuously stay aware of competitors and fill any business gaps
- Make any improvements deemed necessary to remain a successful organization
Mara Calvello
Mara Calvello is a Content Marketing Manager at G2. She received her Bachelor of Arts degree from Elmhurst College (now Elmhurst University). Mara writes customer marketing content, while also focusing on social media and communications for G2. She previously wrote content to support our G2 Tea newsletter, as well as categories on artificial intelligence, natural language understanding (NLU), AI code generation, synthetic data, and more. In her spare time, she's out exploring with her rescue dog Zeke or enjoying a good book.
