Every business has competitors who are selling the same goods or services. Competition for customers is also present in the digital market as customers search for products online. It is, therefore, important to have your website stand out from your competitor’s website. The best way to accomplish this is offering the answers that the clients are searching for. To do this, you can engage in competitive analysis. (Image Credit: Freepik)
Competitive analysis is a business strategy that helps you to understand your strengths and weaknesses while compared to your competitors. You can then be able to make improvements to your business and to be able to keep up trends that help you to adapt to your competition. The goal of competitive analysis in digital marketing is to have consumers looking for information from your website rather than that of your competitors.
Most people have a myth that competitive analysis is a form of spying. This is false because while you are gathering information about your competitors, you only use the information that is out in the public. It is also highly likely that your competitors too are doing a competitive analysis of your business if you are doing better than them. The advantages of competitive analysis are discussed below.
Helps to Know Which Businesses are Your Competitors
Competitive analysis helps you to identify your competitors by finding out the types of goods and services that they are offering. If another business is offering similar products as you are, this is a direct competitor. Indirect competitors sell products that are substitutes to the ones that you are selling like glasses versus contact lenses.
When you engage in competitive analysis, you will also be able to know whether your competitors have the same target market as you. If a business is offering the same products or services, but to a different target market from the one that you are targeting, such a business may not be a competitor for your business and therefore you can focus on the ones with the same target market. The competitive analysis also helps to find out whether your competitors are selling in the same geographic area as you.
Understanding Your Strengths and Weaknesses and Those of Your Competitors
When you engage in competitive analysis, you can know the strengths and weaknesses of your business. Moreover, you learn how your competitors are outperforming you in digital marketing. There is a marketing tool that can help you to learn how your competitors became successful. You can take a look for yourself to learn more about this marketing tool. Competitive analysis helps to find out how active your competitors are in the digital market including on social media.
You can also learn from how a competitor engages their audience in the digital platform and make improvements in your strategy. By observing how your competitors make ads and the keywords that they use on their websites, you can learn any weakness that they have and use it to improve your website so that clients prefer it to theirs. It is by studying the weaknesses of your competitors that you get an opportunity to make improvements in your digital marketing strategy.
Finding a Market Gap
As you engage in competitive analysis, you will be able to find out the exact products and services that your competitors are offering. This will help you to know which products are missing in the digital market and you can start offering them without competition. You can also learn about a target market that has been neglected by your competitors and take advantage of this opportunity to sell to them. To stay a step ahead of your competitors, do competitive analysis as often as you can.
Taking Lessons From the Shortcomings of Your Competitors
As you do competitive analysis, you will learn the errors that your competitors are making in their digital websites, avoiding these errors puts your business in a better position. You can also read the consumers’ reviews about your competitors’ business. If there are negative reviews, you can make adjustments and improvements in your marketing strategy to satisfy such clients. Learning from your competitors’ mistakes helps you to optimize your digital marketing strategy.
Identifying an Opening for Merger
While engaging in competitive marketing, you may learn of competitor’s products and services that you do not offer. You may be unable to provide these products because of a lack of resources. Should this occur, you can try to procure the necessary resources. However, approaching your competitors for a merger may be another strategy. This would allow you to provide the other services to your customers in the digital market.
Understanding the Digital Market
Engaging in competitive analysis helps you to understand the online market better. As you study the customer reviews, you can know what products and services they are looking for. Learning about digital marketing can boost your business by increasing sales. You can also learn about new strategies in digital marketing that you can engage in to promote your business. The goal of digital marketing is to fulfill consumers desires for insightful information and answers.
Other advantages of competitive analysis include:
- Knowing how your online customers rate your competition
- Understanding the needs of your customers
- Fine-tuning your marketing strategies in the digital platform
- Understanding the best practices to improve your digital marketing
- Doing a forecast of the digital market potential
- Tracking your competitor’s products and pricing
- Understanding customer acquisition and other possibilities in the tertiary market
A Valuable Asset
In conclusion, competitive analysis is a necessary tool in digital marketing. Competitive analysis helps you to understand your direct and indirect competitors. As you engage in competitive analysis, you learn about the strategies that your competitors use in the digital market. You can also learn about the weaknesses of your competitors. Take advantage of these weakness to stand out from the competition. You can also avoid the mistakes that your competitors are making.
The competitive analysis also helps you to find market niches that you can invest in to make more sales in the digital market. In case a competitor is offering products and services that you cannot offer because of financial constraints, you can approach them for a merger. Competitive analysis helps you if you are constantly doing it to keep check of new competition. The goal is to have your business stand out in offering the products and answers that the customers are looking for in the digital market.