One of our past blog posts includes a competitors’ analysis template, but before you start filling the spreadsheet out, you need to know who your competitors are. Knowing who your competitors are, what they offer and how they go to market will help you create a strong marketing strategy to differentiate your company.
Let’s start with the types of competitors you can find:
Direct vs Indirect Competitors
Direct competitors offer an identical product or service as your business in the same market segment. (Let’s use the example of a coffee shop). An indirect competitor is a company offering products and services in the same market, but at a different level of the value chain. (Following the coffee shop example, coffee beans for sale would be an indirect competitor).
Replacement Competitors (or “Phantom” Competitors)
Replacement competitors satisfy similar needs to your company’s offerings, but usually at a less expensive price and easier level. Thinking about a coffee shop that offers special freshly brewed beans, a replacement competitor would be a regular instant coffee powder.
Disrupters are just that: ones you don’t see coming that completely disrupt the industry with a whole new take on a product/service. Netflix disrupted the movie rental industry and, later, cable network television shows. Uber disrupted the taxi business. They tend to be a superior product that is easily scalable, reliable and have great branding and customer service.
When doing your competitor analysis, we recommend focusing on direct competitors. But don’t forget about the other types, as they could at some point become a direct competitor and always keep your eye out for a disrupter!
Now, how to find your competitors:
Search Engine Research
Which keywords would your customers use to find your business in a search engine such as Google? It would probably be your niche + location. For example: “fresh brewed coffee shop Nashville”. The results on the first page will probably be your direct competitors.
96% of small businesses use social media in their marketing strategies, so there is a high chance you will find your competitors there. You can enter your keywords in the search box or see who is using the same hashtags as you. With LinkedIn, it is very easy to search for companies based on location and industry. You can also take a look at the accounts your customers are following and find competitors there.
Ask family, friends, coworkers and customers if they know another company that offers the same product or service. In B2B for example, when you get a new prospect, it is good to ask if another business has or is currently providing them the product/service you offer.
Once you know who your competitors are, you can download our competitor’s analysis spreadsheet to have a clear vision of what they are doing and be able to develop a powerful message and marketing strategy for your business. But remember, the market is always changing and a competitor analysis is not a one time thing. It should be conducted on a regular basis – as much as quarterly if you want to stay ahead of competition. Does it seem too much for you to handle alone? Contact us using our contact page or email us at [email protected] to see how we can help.