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Competitor analytics

What is it?

Competitor analytics is important for marketing and strategic planning. It allows you to understand your competitors in more than just a cursory ad hoc way. Not everyone in your market is your competitor; some may sell similar products but to a different audience and some may simply be too small to be your competitors. You need to know who your real competitors are, how they are positioned in the market and in relation to your business.

By understanding their strengths and weaknesses you can identify opportunities to exploit and threats to navigate or mitigate through strategic planning. Plus, competitor analytics pulls all the relevant information on all your competitors together so that you can see the whole picture not just snapshots when you focus on one main competitor.

Why does it matter?

Competitor analytics matters because your business does not exist in a vacuum. It is part of a dynamic industry where many businesses are all seeking the same consumer spend. If you are to prosper in that dynamic market you need to know what’s happening around you and how you and your competitors are perceived by the market.

Competitor analytics help you to understand your competitive advantages and disadvantages relative to your competition. It also helps you to predict what they will do in the future and therefore how you can stay ahead. Plus, if you know how they have behaved in the past you can better predict how they will behave in the future and how they may respond to a new product or pricing strategy.

When do I use it?

This depends on how changeable your industry is. If there are constantly new companies entering your market and others falling away then you would be wise to conduct thorough competitor analytics at least once a year. If the industry is fairly stable and your main competitors haven’t changed in several years then once every couple of years will probably be enough.

That said, you do need to review your findings when you are making important strategic decisions. That way you can anticipate what your competitors will do if your plans will impact them and how you can counter any competitive move.

What business questions is it helping me to answer?

Competitor analytics will help you answer some important business questions including:

  • Who are our key competitors and why?
  • What are the objectives of our key competitors and how does that differ from our objective?
  • What are their strengths and weaknesses?
  • What threats do they pose?
  • What opportunities do they present?
  • What strategies are they pursuing and how would they affect us?
  • Based on their past action how are they likely to respond to changes in our business?

How do I use it?

As always, strong and useful analytics relies on strong and useful information. You can source competitor data from recorded data that is easily available such as annual reports, product brochures and marketing activity. If possible, have an employee, friend or family member to buy a product or service from your key competitors and assess their experience. This will also get that person on their mailing list so you can see all their communication and marketing efforts. Pay attention to business journals and newspapers for any mention of your competitors. You can use media monitor services to find these or simply create a Google Alert which will alert you to any online mention of your competitor.

There is also observable data which is collected from various sources such as competitor pricing data, advertising campaigns, etc. And finally, there is opportunistic data such as trade shows, supplier meetings, and sales force meetings. Your sales team will often meet would-be clients who are already doing business with your competitors – they could be a rich source of information.

This type of analytics used to be quite laborious but so much data already exists online. You can, for example, read competitor product reviews like their Facebook page and see what their customers are saying about them. When you have the data you could conduct text analytics (Chapter 8) and sentiment analysis (Chapter 9) to gain insights into what your competitors are doing right and doing wrong.

Practical example

Say you are a mobile phone manufacturer and you wanted to conduct competitor analytics. The easiest way to start would be to use the internet to establish all the other companies that manufacture mobile phones. Most businesses already know who their main competitors are but may not know all their competitors, or may not consider companies that create products that are a substitute for their product. Today more and more people are using tablets or simply making calls via services such as Skype – these are also therefore competitors because they could and do replace the need for a phone at all. So Skype may be an indirect competitor of yours and certainly what that business is doing should be something you know about.

Once you’ve compiled your list of key competitors and indirect competitors you need to identify the key value drivers in the market. What do customers in this market value the most? What are the features and benefits they are searching for when they buy their product? Are they interested primarily in price, quality, length of warranty, simplicity to operate, etc.? Looking at your own customer analytics can help establish what those features may be. Once you have a full list of features and benefits identify which competitor fulfils which ones. Of course it may be easy to figure out if a competitor product has a particular feature or not, but benefits are more subjective. However, if you look at social media data, for example from review sites, you will be able to establish if each competitor delivers certain benefits too.

Finally, you need to compare your own offering to your competitors – especially your top three rivals and work out what makes you products or services unique. Are those factors important? Do your customers know about them, do they recognise the difference? Again there is a wealth of new data such as social media data and review data that can tell you a great deal about your competition and what their customers think about their products. And all of this data can be broken down by service, product, competitor or geographic location.

Tips and traps

The most useful tip for competitor analytics is to do it! Most businesses don’t. Instead they think they have analysed their competitors because they may share snippets of information that a manager might hear at a conference or they may notice a newspaper article and share that in a strategic meeting. And yet this approach places your business at risk of potentially dangerous competitor blind spots.

Don’t fall into the trap of thinking that informal impressions, intuition and conjecture is a) all you need and b) competitor analytics. The process is much more systematic and thorough than that, and if you invest the time it will yield reward and inform your decision making.

Further reading and references

To find out more about competitor analytics see for example:

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