Know your competition

Marketing Communications

Conducting a competitive analysis is probably one of the most important reports you should do for your business. The main reason is that clients perceive product and differences among competitors, and creating a competitive analysis spreadsheet will allow you to understand how you compare against direct competitors based on actual product features to clients’ perceptions of you and your competition. It is these gaps and opportunities across a range of factors that you are looking for to either help define your brand message or educate your target audience should their perception be incorrect or skewed.

These factors include financial stability, type of clients, marketing investment, staffing, product and service offering and brand positioning and messaging.

A competitive analysis includes the following:

  1. Who are your direct and indirect competitors
  2. Understand the threat of substitution
  3. What is the ease of market entry
  4. Supplier Power
  5. Buyer Power

RESEARCH PROCESS

At the start, create an excel template listing the top 5 to 10 factors, benefits and features your customers believe to be important and are factors for your company’s success.

You’ll need to set at least 10 hours a week to stay on top of your competitive reporting; it comes with a lot of reading competitor’s annual reports, press releases, product brochures, patent applications and much, much more!

Also, you’ll need to travel to trade shows, check out how the competition presents their brand, attend all seminars and speak with the trade show organizers – the good ones will have a vibe on the industry’s outlook based on exhibitors and attendees comments, attendance and promotional programs.

LOOK IN / LOOK OUT TO UNDERSTAND YOUR COMPETITOR

I like doing a competitive analysis. It allows me to understand clearly my company’s position in the industry, as well as my company’s strengths and weakness. During a competitive analysis, you need to remove any bias. You need to think analytical because you won’t be doing your company any favours by listing brand strengths that are still not developed. Also, brand strengths need to be relevant since you’ll be using these strengths to create a truly unique brand message that is relevant to your target market.

REAL BENEFITS IN COMPETITIVE ANALYSIS?

Yes! It will help you formulate the marketing strategy, discover opportunities in new markets or product development and create a unique brand message that will help you stand apart from your competitors.

DEALING WITH UNKNOWNS

My biggest frustration is when I read posts that insist that you can know your competitor’s marketing strategy by reading a press release. By the time you’ve read the press release, it’s too late. You are in reactive move.

However, you can find out a lot from a public company from their annual shareholder report, especially in which product saw growth, which markets they are focusing on and why they’ve spent so much money. Here is a list on how to track your competition:

  1. Subscribe to their newsletter
  2. Speak to your sales people
  3. Ask lost sales why they chose to go with the competition
  4. Visit trade shows
  5. Follow them on social media
  6. Visit their website often

SALES FORECASTING FROM COMPETITIVE ANALYSIS

The second area is sales forecasting. There are two types of sales forecasting, a) when you’ve just launched a business and need to know your cash flow and b) when you’ve been in business for a few years and need to know how much sales you need to stay profitable.

The idea that you can track your competitive and help you with your sales forecast is naïve. It will only help you understand how much work, like marketing, promotion, sales, and product development you need to do if you plan on entering ‘their territory.’

Or, it will help you determine whether you should enter their landscape, or not and go somewhere else.

NOTE: As much I appreciate the importance of a monthly competitive analysis report, I also know that big client wins, overnight a competitor enters your niche market, and new product introduction can and does arrive as a big surprise and changes the market space. It happens, no matter how much competitive tracking you are doing. It what makes business so exciting.

Need more? Check out The Business Toolkit.

Your thoughts?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s