Back in 1996 – I got the task to set up a marketing department for a software company, I had free realms to do what I wanted to build up the department, for me one of the fundamental pieces of the marketing department was competitive intelligence. You may ask should you not focus on promoting the products and business in the early stages when building a marketing department.
In my view, no to me competitive intelligence is the most important function, you need to understand your competitors, market size, how buying cycles work, build sales strategies to lay the foundation for a successful marketing department to promote and sell products into a specific market.
Why focus on what your competitors are doing?
While many businesses prefer to keep their focus on their own activity, conducting a competitor analysis has a range of benefits for businesses of all sizes – this means that not only do you have data on your competitors but that you have a deep understanding of your competition. Having up-to-date analyses allows you to:
- Track pricing, product or market changes
- Define your own unique selling points (USPs)
- Create Key Performance Indicators (KPIs)
- Create strengths, weaknesses, opportunities and threats (SWOT) analyses of your competitors
- Be proactive in your sales and marketing, not reactive
In the initial stages of building a business, it’s important to be aware of what’s going on both within your market. Developing a new product or service, competitor analysis data allow you to understand the details about pricing, product options, customer service and more – which also gives you valuable insights to help shape your own offering and business plan.
What should I look out for?
It’s important to start by creating a list of your competitors, start with a list of competitors and make sure to keep this updated, as any new entrants to the market could be a disruptor, and it’s important to keep an eye on these.
Once you have your list of competitors, create a competitive database with some of the following metrics:
- What size company are they?
- What’s their annual turnover?
- What are their price points and profit margins?
- Are their products seasonal? When are their peaks and troughs?
- How long have they been in business and how long they been in this marketplace?
- How do their products or services compare to yours? (Pricing, options, costs of manufacturing, and so on)
- How does their customer service, support or sales aftercare process work?
- What do they do currently to market their business both online and offline?
- What are their objectives and future plans?
To find the answer to some of these questions, you can get information form LinkedIn, BuiltWith, company websites, in annual company reports or in published white papers. For competitors’ marketing and outreach strategies, they can often be found by looking at their public social media accounts, utilizing search engines and using tools such as Google Trends to understand their current search engine marketing and traffic acquisition priorities.
Take it one step further
When you have collected your competitor data and analyzed it, you should have a clear overview of your marketplace: average business sizes, product offerings, market penetrations, customer acquisition methods and any future expansions planned.
The findings that you now have, use it to compare with your company and to find patterns such as:
- Any reoccurring themes or trends?
- Which best practices can you uncover from your competitors?
- Are there opportunities to replicate their successful marketing activities for your own business?
- Are your decision-makers engaging more frequently with your competitors on one or two channels?
Understanding the way the marketplace currently works can allow you to both replicate the success of your competitors by planning similar activities and gives you the chance also to exploit gaps and missed opportunities, such as new marketing channels, cost-effective manufacturing processes or efficient approaches to sales, allowing you to boost your profit margins.
What to do with your competitor analysis
Now when you have a great view of the data and your competitors, you need to take advantage of the data to make it work for you and your business and build your own marketing strategies around it. Use your competitor insights to make business decisions such as staffing, product costs, processes, marketing channels, acquisition methods, customer relationship management and more.
The data can not go stale, it is an ongoing process – you would need to regularly update this data, which will give you a structured and longer-term strategy. This will give you a strong sign of where your business priorities should lie – allowing you to be proactive in your planning, rather than reactive to changes or, worse still, taken by surprise.
If you do this right, will allow you to understand your companies marketplace standards and best practices, and leverage this information in your own business to create a unique offering that stands out from the crowd!