There are three main reasons why knowing your competitors is important for your business. First, knowing who they are and what they are offering can help you in defining your products, services and promotion in a way that will make you stand out. As such, they can help you define your niche market and target customers. Second, you can evaluate your competitors’ performance, learn best practices of your most successful competitors and adapt them within your business. Lastly, keeping an eye on your competitors can also help you create competitive advantages and marketing strategies in future.
Based on the results related to these three reasons, you will also be able to minimise risk and increase your chances of success.
If you have never done any competition analysis before, in this article you will learn how to search, identify and analyse your competition in a simple and fast way.
Search for competitors
The first step is to find out who your competitors are. While planning to start your online business, you might be already familiar with one or more of your competitors. They might have even inspired you to start planning this particular business.
In addition to these competitors, you need to search for other competitors that offer the same or similar products or services to yours. If you are having (or going to have) an online business, you can do this search online, through Google Search for example.
When searching for competitors online, you need to use keywords that are relevant to your business and solutions, as well as to the competitors you are already familiar with. And if you will be serving customers internationally, you might want to use also keywords in the languages present in various countries you will be focusing on.
Analyse your competitors
Once you have identified your direct competitors, try to select the five to ten most relevant ones. In the competitor analysis, focus on reviewing and assessing the following aspects:
Their brand (e.g. company name, logo, colours, products and services brands…);- Their website (e.g. the type of website, structure, what information they provide, what looks good and what doesn’t…);
- Identify in which markets they are present;
- Identify what kind of customers they serve;
- Find out what problems they solve;
- Identify any niche markets they serve;
- Their prices;
- Their products and services, as well as solutions (e.g. what kind of products and services they provide, do they offer any solutions, sets of products, packages…);
- Their social media pages and other online presence (e.g. where are they present online, how they engage with customers, how their pages look like…);
- Find out what are their marketing activities (e.g. are they doing Facebook Ads or Google Ads, are they sending email newsletters, are they having banners on specific websites, are they organising any online or offline events…)
- Find out what are their competitive advantages.
When analysing these aspects, try to keep it short and simple. Where useful, you can also prepare screen shots of some good examples of brands, websites, social media posts, landing pages, etc. Make a note of anything else relevant, a particular niche market they serve, or a strong competitive advantage.
Define best practices for your online business
Once you have analysed your key competitors, prepare a list of best practices to include (consider) in your online business. These can be related to your brand, your website, your marketing strategy, your range of products and services, your solutions, your social media presence, your pricing, and so on.
When you work on implementing these best practices into your own business, you can even define what you can do better compared to the things they don’t do well or don’t have.
However, be careful about copyrights, patents and other legal issues. You cannot just copy your competitor’s solution and only change the price or the name. These best practices are meant for you to learn what they do best. This can then help you in preparing properly your own online business.
If you are currently looking at competitors because you are trying to define in more details your online business idea, the blog article “How to Define Your Online Business Idea in 7 Steps” can be of great help.
