If market domination isn’t what your client is after, you can stop reading here.
Carving out your own place in the market landscape is no easy feat. It’s about knowing your audience, knowing your product, knowing your competitors and knowing how you fit in as an essential part of the puzzle. Let’s face it, we all want to be that missing je ne sais quoi. We all want customers to buy our products thinking, saying and feeling: “You complete me.” And your clients aren’t any different.
In order to successfully scale your client’s business, you need to have a pulse on market trends, their competitors and their company’s strengths and weaknesses. Then, translate all that data and key insights into an actionable marketing plan that sets their brand apart.
Welcome to the world of competitive analysis, a methodology to assess one’s place in the market, identify competitors (direct and indirect) and build a marketing strategy in response. Regardless of your client’s industry, reaching their target audience is more competitive than ever before. So you need to stay ahead of the curve—because this is about the livelihood of you and your clients.
What is a competitive analysis?
Competitive analysis, or competitive intelligence, is the process of gathering and assessing data about other companies vying for market share in your client’s industry. Your ultimate goal is twofold: 1) See how your client’s business and their products or services stack up against competitors. 2) Develop strategies to make their brand the clear choice among customers.
Pooling data from multiple sources and touchpoints, both internally (your client's sales records, quarterly goals/projections) and externally (market forecasts/reports, competitor promotions), gives you a broad picture of where their brand ranks and how to penetrate new areas of the existing market.
The importance of competitive intelligence and analysis in marketing
Conducting an in-depth competitive analysis has far-reaching implications, impacting every aspect of your client’s business. Here are just a few benefits of how market research and analysis can make a difference.
Understand your client’s strengths, weaknesses, challenges and potential
The core of any competitive analysis comes down to a SWOT analysis. A 2x2 matrix assessing your client’s business’ (as well as products) strengths, weaknesses, opportunities and threats. When identifying strengths and weaknesses, focus on your client’s business alone. Items that fall under weaknesses and opportunities relate to your client’s market or industry as a whole.
Strengths: Things your client does well, including qualities and values that set them apart from their competitors. They can be product or resource focused. Don’t discount the expertise and strength of your client’s team. Human capital is incredibly valuable.
Weaknesses: Things your client’s business lacks, limitations to their resources (finances, inventory, technology, employees, knowledge) or areas their competitors simply do better.
Opportunities: An underserved or emerging audience for your client’s products or services, lack of competition, a growing need for your client’s products or services (Did somebody say face masks?), or trends in the market.
Threats: New competitors or an oversaturation of competitors in your client’s market, instability in the industry or new regulations/laws that make doing business more difficult, negative changes in public perception about the products or services your client offers, bad publicity (your client’s product is being recalled), or quite possibly the worst situation, no product-market fit.
Enhance product features or service offerings
Complete an audit of your client’s products or services. Do a side-by-side comparison of their products or service offerings with their competitors, tallying their strengths and weaknesses. When conducting your audit, here are some basics to consider:
Does their product have better specs?
Does it have a unique selling point (made in the USA, locally sourced, vegan leather or Fair Trade Certified)?
Do they offer services that are hard to find?
Is their staff more experienced, or more sought after?
Are their products or services over-priced, at-market cost or below the market standard? How does this price point position your client—as a luxury brand, or value for the money?
Clearly identify areas in which your client’s products or services make them stand out in the market and areas they can improve to better compete.
Diversify a product line or develop new products
Building on a product or service audit, you may realize your client needs to up their competitive game by expanding business offerings. Look outward at your client’s competitors and see how they’re able to take a larger share of the market by giving customers more of what they want.
If your client has a service business, they can quickly up sales by creating custom branded products promoting their brand, or dropship products related to their industry. Let’s say your client owns a pilates studio. They can diversify their business offering by selling pilates and yoga related products, such as mats, fitness rings, foam blocks and more. Plus, with print on demand, they can create tees, tanks, leggings and totes with their logo and studio name. Chances are their most avid clientele will buy these items, boosting sales while promoting their business.
Assess the market landscape
Analyzing your client’s competition gives you vital info about the market as a whole. When you identify the major players of any market, you soon realize if it’s oversaturated, dominated by one MVP or if there’s healthy competition and room for growth.
In an oversaturated market, or one that has a clear leader, you need to be honest with your client. Draw attention to hidden opportunities and strengths they have and how they can potentially pivot their products or services to capitalize on the market. For example, if your client is in an oversaturated drone market, they could pivot their product offering and focus on high-end drone accessories, like cameras.
If your client is in a market with fair competition and no clear market leader, overhaul their marketing plan. Harness the power of influencers to reach new audiences, incentivize repeat business, change up their product line or offer popular services in bundles and more. Moreover, clients in this kind of market need to be made aware of possible threats. What are their competitors doing now that could cut into their future market share? How can they stay smartly on the offensive? Support your clients with strategic planning that accounts for their current situation while anticipating changes to the market.
Identify emerging segments
Combining what you learned from your client’s SWOT analysis and the current market landscape, you should be able to start connecting the dots to new opportunities. Emerging market segments and niche audiences in particular could mean big rewards for your client. New segments enter markets with more or less buying power, while others in the population age and their needs shift. Additionally, public perception about certain products and services change over time. Pay attention to the root of evolving attitudes. Nowadays, many businesses are directly impacted by a lack of economic stability and consumers that are choosing to save instead of spend.
Your clients need guidance on how to adapt their marketing efforts and messaging to cater to new segments, or the fluidity of existing ones. What worked for their initial target audience or customer-base may not lead to conversions with new audiences, especially in times of economic uncertainty. However, if they are able to speak to these segments in a meaningful, authentic manner, they’ve come more than halfway to building a loyal consumer base.
When addressing niche audiences, research is the only way to their hearts and their pockets. Invest the time in thorough research, engaging with focus groups and developing buyer personas for your client. Ultimately, it’ll come down to truly understanding the unique pain points of this group and then putting a spotlight on how your client’s products or services is the solution they’ve been waiting for and can’t miss out on.
Create a strategic marketing plan
Chances are this is why your client called you in in the first place. They have a product. They have potential customers. They just need help communicating to their audience why they really need this product. Your client won’t realize all the research involved to get your agency here, down to the planning stage. But that’s why you're the pro.
Knowing your client’s industry and target audience are the working variables in a performance-driven marketing plan. You have to live, breathe and believe in their product or service like a devout cult follower. To ramp up the conversion process, create an archive of marketing and promotional messaging your client’s competitors use. Then, ask yourself the following:
What words keep appearing? Are they industry specific, or more friendly and familiar?
Is the ad copy text heavy and loaded with stats, or just a simple and direct call to action?
What kind of visual story do they create to sell their products or services?
What emotions are they appealing to?
Which part of the market audience are they targeting?
Would you or your client click on the ad if it popped up on your Facebook feed?
Maintaining an archive of competitor ad exemplars is a great way to engage with your client about marketing materials and ad formats. All conversations are centered around shared examples, giving you common ground for dissecting the competition and plucking morsels of winning material to use and A/B test in your own marketing campaigns.
Review operational processes
Product and process are no doubt interconnected. A competitive analysis prompts you to take a hard look at the tools, systems and technologies that your client and their competitors use. Investigate the structures and processes at play in your client’s business:
How can your client best allocate their resources (human included)?
Which routine tasks or processes can be automated, or perhaps even cut altogether?
What SaaS programs do businesses in their market use and why?
What new technologies address common challenges in their industry?
Be open and honest when you share your findings. It’s not an attack. You're helping them streamline operations. Oftentimes inefficient company processes and workflows go unchecked for years and an outsider looking-in, even for a short time, can offer invaluable feedback.
Improve distribution models
Similar to inefficiencies in operations, companies offering the same product or service might employ distribution channels that are outdated, no longer practical, or worse, no longer financially rewarding.
Get a firm grasp of your client’s distribution model. Do they get their products directly from a manufacturer, or do they work with one or many wholesalers? Track your client’s expenses end-to-end—from purchasing products, stocking them or storing inventory, to selling it to their customer. Where along this chain can they reduce costs (inventory, handling, transport)? How’re your client’s competitors able to cut distribution costs while maintaining the integrity of their products or services? Like a detective, it’s your task to uncover mysterious clues that point to how your client can maximize profit margins.
Shape company culture
From employee satisfaction to customer-experience indicators, corporate culture can be a central ingredient to a business’ success or failure. While no company is living it up 9-to-5 in utopia, continually working towards a work environment where all employees feel valued and respected is critical.
Get a sense of your client’s company culture from all levels. Does top management feel one way about the company’s vision and quarterly goals while middle management and support feel another? Do employees like coming to work, why or why not? Are they passionate about the products they sell or the services they offer? Do your client’s company values match their employees' values? Their customers?
For clients in larger companies, you can anonymously poll employees using tools like SurveyMonkey or Google Forms. If your client is smaller, or prefers a more intimate setting, consider gathering info informally through a custom generated game, like Kahoot!. When employees are on board with the company culture, they understand the importance of business objectives, own their role and responsibilities, and want to make an impact—regardless of their job title.