6 Reasons Why is a Competitor Analysis Important
If you are thinking of starting a business with the assumption that you are the only one with that idea, think again. It won’t be long before another competitor springs up selling the exact same service or product. Competition is always going to be a part of life and a part of the business world. And you have to discover how to handle competitors in the best possible way that would be both to your own advantage and that of your business. Hence the need to carry out a comprehensive analysis of all or major competitors in the niche of your business.
What is competitor analysis?
Competitor analysis is an essential part of marketing which has remained timeless. It is impossible to dream about successful marketing without properly carrying out an analysis of other businesses offering the same or similar products or services as yours. It is not just about finding ways to out-smart these competitors or hijacking a larger percentage of the target market share but rather it focuses on improving the business overall.
Competitor analysis allows business owners to get deeper insights about the strengths and weaknesses of competitors in the same business niche, in relation to the products or services offered; which would help the business improve to get the needed advantage over others in the same business niche. It is the needed cost your business has to incur in order to stay afloat in the business world.
What metrics do a competitive analysis help with?
Some things a competitive analysis will help you understand: Are your competitors offering a better price than you are? How strong is their distribution channel? What kind of customer service do they offer? What is the size of the business in terms of production capacity? (for those offering products). Do you share the same target market or does the competitor have a wider target market that is inclusive of yours? Do they have a website and what does it look like? What kind of customer service do they offer through the website?
All of these questions might seem a little overwhelming, especially for startups and businesses in their first three years, but it is a necessary procedure to carry out if you plan to excel in your business venture. Also, consider the help of an SEO marketing agency to make the process easier.
5 Reasons why competitive analysis is Important
Here are six important reasons why competitor analysis is vital;
Helps you to understand who your competitors are
Carrying out a competitive analysis allows you to understand who your competitors are. If you have not already taken a conscious effort to list out your competitors and understand how they are a threat to the financial wellbeing of your business, this provides that opportunity. Imagine you are a goldfish in an ocean surrounded by sharks, you need to know the kind of sharks that threaten your existence and seek out parts of the ocean you can call home which would threaten a shark so you can live longer.
Delivers insights about competitors
If your customers are not buying from you, they are buying from others who are offering the same or similar products or services. Competitor analysis further reveals your competitor’s market share, past and current marketing strategies, channels used to market their products or services, potential threats areas they pose to your business, and potential opportunities that such competitors create for your business.
Improves content marketing strategy
Content is king and it is an essential aspect of marketing. Your goal in this business is to make sales and you need to be able to know what to say to your target audience and when to say it in order to reach your goal. And if you are able to spot a competitor who is raking in a lot of money through sales, you can research on their content marketing strategy and adopt it to suit your business. Once you have identified this, you can further improve on the quality and do better to outperform them on all distribution channels for their various contents.
Search Engine Optimization (SEO) is crucial if you want to remain relevant in this era. One of the things that competitor analysis helps you discover is the SEO strategies that your competitors are using to rank high in Search Engine Result Page (SERP). When people, especially your target audience, are searching for products or services online through search engines, they are going to be using keywords related to your business (and that of your competitors). It would be wise to have done proper research on these keywords, which strong competitors in your niche are using. You can then use it in the content you publish on your website and social media so that you can also rank higher in SERP related to your business keywords.
If you can’t rank high on primary keywords after adopting the SEO structure and strategies of your competitors, try using secondary keywords relevant to your business to rank high on SERP. Chances are that when your target audience is searching online, these search engines would suggest results in the secondary keywords if it senses it is closer to what the person is searching for.
Identifies areas of the business to improve on
If you conduct a very comprehensive competitive analysis, you will discover not just the strengths and weaknesses of your competitors but also of your business as well. If you are unsure about areas of your business you need to work on, compare your products and services with that of your competitors. You would be surprised to see areas you are sloppy in and you can work on it. Comparing your business with both your direct and indirect competitors allows you to work around every single aspect of your business.
Identifies new opportunities
Some opportunities find a way to get to us while some others you have to go find and create it. This is what carrying out a competitive analysis does. There is something that your competitors are not doing that you can do to improve your business and it is impossible to discover this is if you have not properly done your research.