Top 7 Benefits of a Competitor Analysis

What’s life without a little healthy competition? Often, growing as a brand or company means learning from the strengths and mistakes of others—that is, from your competitors. Here we discuss the top seven benefits of a competitor analysis, and why every business can benefit from them. 

WHAT EXACTLY IS A COMPETITOR ANALYSIS?

A competitor analysis is the process of identifying other companies or products in competition with yours—directly and indirectly. It’s where you systematically assess and compare strategies, strengths, weaknesses, and other qualities in order to improve your own products and marketing strategies. 

Worried this sounds too much like snooping on other companies? Don’t worry—we can almost guarantee they’re analyzing your company at the same time!

DEFINE YOUR VALUE

A competitor analysis compels you to take a close look at your company’s special features, how your products and services compare to those of others, and how well you fit into your desired industry—essentially, what makes you special. This is a crucial first step because it’s as though you’re setting your hypothesis, and the research that follows will either prove or disprove your theory. All of this reflection will help you hone your value proposition. 

UNDERSTAND THE PLAYING FIELD 

Just like in a sports match, knowledge of the other players is key to winning the game. As part of a competitor analysis, you’ll identify not only your direct competition—people selling the same products or services as you—but also competitors who may not be obvious at first glance. 

STAY INSPIRED

Paying attention to the strengths and unique strategies of your competitors can lead to some real ‘aha’ moments for your own business. There are numerous factors for comparison, such as branding, inbound marketing strategies, culture, pricing models, etc., and all of them can serve as real inspiration for ways to improve your business. Check out some of the questions you can ask in a competitor analysis survey to gain customers’ feedback on some of these factors. 

WATCH AND LEARN

Paying attention to the strengths and unique strategies of your competitors can lead to some real ‘aha’ moments for your own business. There are numerous factors for comparison, such as branding, inbound marketing strategies, culture, pricing models, etc., and all of them can serve as real inspiration for ways to improve your business. Check out some of the questions you can ask in a competitor analysis survey to gain customers’ feedback on some of these factors. 

IDENTIFY YOUR NICHE

With a more in-depth understanding of your competitors comes a better understanding of where they leave gaps in the market—gaps that you, naturally, can step in to fill. Use a competitor analysis to double down on your own niche, make your customer targeting more precise, and in general make your product or services stand out even more. 

DISCOVER GROWTH OPPORTUNITIES

Where are your competitors drawing their support? In the process of analyzing your competitors, you’ll also get a glimpse of the sources they rely upon, some of which may also present opportunities to you. 

From groups of investors who’ve shown interest in your industry niche to start-up grants and other sources of support, competitor analysis is a great way to uncover more funding streams. It can also point you in the direction of cutting-edge social media tools or a new customer base. Who knows? Maybe a competitor could even become a potential partner down the line!

REMAIN INNOVATIVE

Markets and industries are constantly changing, and your company should be too. In other words, a competitor analysis reminds you not to be complacent—at least, not if you want to remain a competitor yourself. 

Even if you’re at the top of your field, a stagnant approach to business is a recipe for disaster. Thanks to ongoing analysis of your competition, you’ll remember to keep your finger firmly on the pulse of any new, innovative trends, techniques, and technologies. 

Bonus tip: banish the weasels. Weasel words like almost, sort of, maybe, probably, and likely all weaken your statements without adding anything useful. If you mean what you say, you don’t need to “almost” or “possibly” mean it. 

THE BOTTOM LINE

A competitor analysis is an incredibly useful tool for improving your company based on actual data about your competitors. After coming up with a strong definition for your brand and identifying your main competitors—remember to think outside the box! Use our Competitor Analysis template for identifying and comparing the same features across all of them. With this analysis in hand, you’ll have a fantastic tool for helping your marketing strategy come out in front. 

NEED HELP?

Feel free to contact us if you have any questions.