How to Perform and Leverage a Competitor Analysis

There's one thing that all businesses in every industry share: competition. The question for your business isn't whether you have competition, but whether you run from it or face it head on and use it to your advantage. The best and most pragmatic way to meet your business objectives--and succeed despite the competition--is to know more about your competitors than they know about you, and use that information for your benefit.

Fortunately, there's a proven method for acquiring this information and making the most of it as critical business intelligence. By performing an in-depth competitor analysis, you'lldiscover your competitors' strengths and weaknesses, find out how your business stacks up in terms of customer acquisition and retention, and hit on creative strategies to help you achieve your goals relative to the competition. To get the most out of your competitor analysis, follow these three steps:

STEP 1: IDENTIFY THE COMPETITION

You may already have a pretty good idea of who your competitors are, especially if your business is local. But whether your business is local or global, it's a good idea to do some online research. You can research competitors online by identifying your top keywords, then typing them into Google to find out which appear in top search results.

STEP 2: USE COMPETITOR STRENGTHS AND WEAKNESSES TO YOUR ADVANTAGE

After you've settled on your top competitors, do research on each to identify your competitive strengths and weaknesses and use this information to enhance your business. For example, if they've been successful in marketing a product or service you don't offer, you might want to expand your offerings to include these items. If they offer the same products as you but charge less for them, you could lower your prices to increase your customer base.

STEP 3: ENHANCE YOUR MARKETING STRATEGY

The success of your business is more than the products you offer and how much you charge for them. It also depends on how well you market them. After you've reviewed products and pricing, assess each competitors' marketing strategy as it compares to yours.

If they're successful with strategies you haven't used, like email and social media marketing, you should consider including these strategies in your own marketing arsenal. If their websites are optimized for mobile but yours isn't, you might want to employ a firm that specializes in responsive web design to gain an edge with mobile shoppers. You can also use tools like Spyfu to find out if they're successful with paid search campaigns and use this information to launch pay-per-click campaigns of your own.

CONCLUSION

The point of your competitor analysis isn't necessarily to applaud yourself for your strengths or demean your efforts when you identify weaknesses. The point is to generate new strategies to improve your competitive position based on the information you've gathered. If you take the time to perform your analysis carefully and comprehensively, the result will be a powerful new tool to help you boost your business and achieve your sales objectives.