Cloudhaus January 17, 2025 Brand News
The 5 Keys Steps to Conduct a Killer Competitive Analysis
In Today’s crowded marketplace, understanding your competition is more critical than ever. A thorough competitive analysis can help you identify your unique strengths, uncover opportunities, and stay ahead of the curve. This guide will walk you through five (5) key steps to conduct a killer competitive analysis.
Step 1: Identify your competitors
This is where a pen and paper are one of your best friends. It’s time to hit the drawing board and get your research documented. The first area we need to look at is called ‘Direct Competitors’. These are businesses that offer the same product or the same services as your business, targeting the same customer base. For example, if you are a web design agency that specializes in e-commerce websites, your direct competitors would be other agencies offering the same services. Think of companies like WordPress, Shopify, and Squarespace.
The next area to look at is called ‘Indirect Competitors’. These are businesses that offer similar products or services but may target a slightly different audience or market segment. For example, if you are a web design agency, an indirect competitor might be a full-service marketing agency like ‘Droga5’ or ‘Wieden+Kennedy’ that also offer web design as one of their services, but their primary focus is on more broad marketing campaigns.
Additionally, you might admire a globally recognized design agency like ‘Pentagram’, or ‘R/GA’, or ‘IDEO’ for their innovative work, strong brand identity, and successful client relationships.
Step 2: Conduct In-Depth Research
This is where it was important you wrote down your competitors, direct and indirect. We are going to need to do some research now. You need to gather data, collating as much information on your competitors’ products, services, pricing, marketing strategies, customer reviews, and any publicly available financial performance. Here are a few places to help gather information on your competitors:
• Competitor Website: This is a direct approach, analyze their services, pricing, portfolio, about us page, and blogs if available.
• Social Media: Their website should have some indication of social media platforms that they use, this is the best approach to looking over their official account, some people like to make fake brand accounts, it’s strange I know. Monitoring their social media activity like posts, ads, engagement, as well as checking their follower count and online reviews.
• Industry Publications: Read articles, case studies, and news related to your industry and competitors.
• Marketing Research Platforms: Use tools like SEMrush, Ahrefs, and SimilarWeb to analyze competitor websites, traffic, and keyword rankings.
• Customer Reviews: Check platforms like Google, Glass Door, Yelp, and Clutch for customer reviews and testimonials.
Now take this research you have combined, and let’s use a SWOT matrix to analyze your competitors. We will use this method to identify what your competitors do well, and where they fall short.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Use this matrix to create your own SWOT analysis of competitors as well as your own brand. SWOT Analysis is a strategic planning tool that helps you gauge how internal and external factors could affect the success or failure of new projects. This can help your business leverage a competitive advantage and achieve greater success when executed properly. SWOT Analysis’ have a few benefits that can add value to your business immediately.
• They are extremely flexible, allowing for a wide range of applications. Whether you are a large corporation or a small mom and pop shop, you can use it in your operations. It can help with strategic planning, market research, product or service development, and as we are discussing here, competitive analysis.
• It is super low cost, requiring little to no training or specialty tools. Once you train yourself or a staff member to use SWOT Analysis, you or they can utilize this deep knowledge of competitors’ businesses or an organizations environment, this tool can be very cost effective.
• It is easy to present a visual illustration of a company’s strengths, weaknesses, opportunities, and threats. Reading is one thing, but visualizing these different aspects in the company’s environment can sway the outcomes and steps to take to increase success.
Stay tuned for an article that will help you break down SWOT Analysis, where we will walk you through how to identify every strength, weakness, opportunity, and threat.
Some resources to remember are industry reports, market research studies, trade publications, and any brand articles.
Step 3: Analyze your competitor’s Marketing Strategies
Go digital and check out their digital marketing, analyze their website, social media presence, SEO strategy, and any paid advertising campaigns. Check their content marketing like blog posts, articles, videos, and other content. If they are a large enough company, check any press releases, media coverage, and/or industry awards.
Some resources for these are to check the company website, check SEO auditing tools, industry news websites, and make sure to analyze their content quality, the topics they cover, articles, videos, and other content.
Step 4: Analyze Your Competitors’ Customer Base
By now, you should have a grasp of who your target audience is. It was a defining factor in determining who your direct and indirect competitors are. Remember, direct competitors sell the same product or service and have the same target audience. Indirect may have some of the same audience, but they aren’t the main target. Well, from here, let’s dive into your competitor’s target audience. Understand their demographics, psychographics, and buying behavior. This is where using qualitative and quantitative research can help understand what they are looking for.
Start to analyze all the customer reviews you have been documenting; the feedback they receive and give back. Gain insights into customer satisfaction, or dissatisfaction, and identify areas for improvement.
Some resources for this are Google, Yelp, Clutch, Glass Door, and social media comments. Monitor social media conversations, and track mentions of your competitors and analyze customer sentiment to that business.
Step 5: Develop Actionable Insights.
Now that you’ve gathered data and analyzed your competitors, it’s time to turn those insights into actions.
• Identify Your Competitive Advantage - What makes your agency stand out? Is it your expertise in a specific industry? Perhaps you offer unique services like UX/UI design or specialized animations. Maybe your customer service skills are exceptional. Whatever it is, pinpointing your strengths is key.
• Develop a Competitive Strategy – Based on the analysis you did of Direct and Indirect Competitors, create a plan to address their strengths and weaknesses. This could include:
• Differentiating your services: Offer specialized services like UX design or SEO Keywords to stand out from generalists.
• Improving customer service: Go the extra mile with client communication and project management.
• Developing new products or services: Consider offering website maintenance packages or expanding into new areas like social media marketing.
• Targeting new market segments: Focus on a specific industry or niche to carve out your own space.
Conclusion
Conducting a thorough competitive analysis is an ongoing process. It’s not a one-time task. Regularly reviewing your findings and adjusting your strategies as needed. The competitive landscape is constantly evolving, so staying informed and adapting is crucial for success.
By following these Five (5) Key Steps and leveraging the information and resources mentioned, you can gain a deeper understanding of your competition and develop a winning strategy for your design agency.
Ready to take your competitive analysis to the next level? Contact Cloudhaus today for expert guidance and support.