Market analysis plays an integral role in a brand’s marketing strategy. It requires businesses to comprehensively study their customers’ evident and hidden needs and identify gaps in the market.
Analyzing your direct and indirect competition is also an essential part of this equation as it can help you figure out how to place your product for maximum profitability. Besides, to build a reputation that rivals high-profile and well-established firms, you must have a detailed insight into your direct and indirect competition.
The digital transformation of businesses has made it easier for new entrants to gain a foothold in markets across the world quickly. This gives rise to unprecedented competition from legacy firms and SMEs alike.
In a study by Crayon, 90% of companies reported their sector to have become more competitive in the past three years. The same data revealed that 80% of businesses stated that competitive audit is essential (44%) or categorically critical (26%) to their business success.
These numbers make it all the more important to focus on your potential and current competition to identify claims that differentiate your brand from theirs. The more you understand the brands that indirectly and directly compete in your industry, the better you will be able to capitalize on opportunities and mitigate threats to your own company.
However, you need to have a meticulous approach to understanding your competition. If you compete with firms dominating the market, you will have to examine heaps of raw and unorganized data, which can drain time and resources.
That is where a competitive audit can help. A methodological competitive audit strategy can help you understand what data you need to collect and how you can leverage it to optimize your business model. Then, with a thought-out plan of action, you can cut time and cost while improving the efficiency of your operations.
How To Conduct In-Depth Competitive Audit In 2022?
A competitive audit allows you to track your competitors, understand their approach, and figure out what your brand might be missing out on. The aim is to discover what works for other companies in your industry and incorporate those strategies for your brand to gain a competitive edge.
Evaluating your competition should be an ongoing process. A competitive audit can save you money and time while getting you the answers you need to succeed.
Comparing the customer data against your metrics can help you make better, data-driven decisions. The competitive audit process lets you identify the USP of your competitors and leverage that information to enhance your competitive position.
Now, let’s explore ways to conduct an in-depth competitive audit program to improve your business position.
Perform A Competitor SWOT Analysis
The first step in a competitive audit is conducting a competitor SWOT analysis. The SWOT analysis examines the competitions’ strengths, weaknesses, opportunities for growth, and threats.
However, first, create a list of your direct and indirect competitors.
Direct competitors are businesses that sell the same product or service as you. The indirect competitors operate in the same or similar industry but don’t directly bite into your market and don’t necessarily offer the same product/service.
But it is still important to keep track of what your indirect competitors are up to because they may rank for your keywords, create content on the same topics, etc., harming your digital visibility.
Once your competitors are identified, you can examine their strengths, weaknesses, opportunities, and threats by assessing the following:
- What is your competitor known for?
- Why are customers attracted to the competitor?
- What compels the customer to choose their brand over others?
- What are the frequent customer complaints?
- What products/ services do customers require but are not offered by the competitor?
- What problems do customers face during their shopping experience?
- Has your competitor discontinued a product or service?
- Are there any gaps that your competitor is unable to fulfill?
- What is the pricing of your competitors’ products/ services?
- Are they offering new products or services?
- Do they present a threat to your business?
Moreover, you can also audit the competitor’s website, social media pages, keyword usage, and content to gather more insight.
Gauge Your Competitors’ Current Offers And Pricing
Pricing has a massive impact on the customers’ purchase decisions. Therefore, you need to examine the price policies of your direct customers. This will allow you to create a baseline cost for your product or services. You can also conduct detailed research to examine other perks, such as discounts or free trials that your competition offers.
Assess The Technology Your Competitors’ Leverage
Another factor that you need to consider is the tools and software that competitors use to streamline their processes. Digital tools can help you save time, improve operational efficiency, and increase customer satisfaction by improving customer experience. In addition, you can leverage digital resources to discover the analytics, tools, plug-ins, and CRMs used by your competitors.
Examine Your Rivals’ Customer Experiences
You must monitor website changes, assess the online presence, and measure how functional your competitor’s websites are.
Treat competitor audit and research as a chance to close the gaps on your e-commerce site design roadmap.
With good e-commerce strategies and digital marketing at the forefront of various businesses today, this is an excellent opportunity to outshine your competition by having a robust, easy-to-use website.
Determine The Market Positioning Of Your Competition
Your competitive audit should also include studying their position in the market. Examine the following factors of their market presence:
- Price: Is your competitor’s product or service luxury or economical?
- Quality: Is your competitor’s product well-produced?
- Service: What type of support channels do they offer their customer/clients?
- Distribution: What medium facilitate product/service distribution?
- Mission/Vision: What impact does their brand messaging have on sales?
Review Performance And Social Media Feedback
The final step in conducting a competitive audit is reviewing the competitor’s overall performance in the market. You can read reviews and testimonials left by previous customers on review sites or social media platforms to identify further what the target customers are looking for.
Social media feedback can be a great way to discover your competitor’s shortcomings, which you can leverage when refining your policies.
Monitoring your competitors is key to spotting new trends, foreseeing market shifts, and staying on top of the best approaches in the industry in 2022.
Analyzing your competition is imperative for small businesses, as it allows them to make knowledgeable decisions. Essentially, a competitive audit operates as an investment to help companies gain remarkable insight into the ongoing trends.