Businesses of all sizes and in all industries must consider what their competitors are doing and how their actions may impact their own. Follow our straightforward 3-step method to conduct a thorough yet concise competitor analysis, and familiarize yourself with various instruments with distinct advantages so that you can plan a more professional digital marketing strategy for the business.

It is the examination of your competitor’s marketing activities in order to compare your brand to the alternatives that consumers perceive. It enables you to evaluate the strengths and weaknesses of competitors who offer similar solutions, thereby highlighting growth opportunities and facilitating strategic decision-making.

Competitor analysis enables you to:

There is no correct or improper method. You can follow certain models (for guidance, see the conclusion of this blog), or, as we recommend, you can employ a more customized approach comprised of these three steps:

1. Define your competitor set
2. Gather competitive insights
3. Combining and evaluating the above information to put it into context

This strategy is readily adaptable to the specific industries or marketing channels you may wish to target. Let’s examine each of these stages in detail.

To accomplish this, you must identify the relevant competitors for your business and industry. It should include all of the major competitors in your market, including those who sell similar products and those who target a similar audience.

If you do not have access to helpful tools like Similarweb or SEMrush, press reports for similar products, local chambers of commerce, industry directories, and industry events are also valuable resources.

Next, collect competitor information regarding the most essential metrics.

To gain an omnichannel perspective, it is useful to start with high-level metrics that enable you to compare competitor performance across channels at a glance. What you choose to analyze for your business will be unique. Here are several illustrations of insightful metrics:

If you want to take your analysis to the next level, you can begin to delve deeply into channel-specific metrics once you have identified the broad metrics. Using PPC as an example, you should monitor your spending habits, impression share, and return on ad spend (ROAS). You should conduct a keyword gap analysis for SEO purposes.

After collecting all of this information, it is time to evaluate. Spend time contextualizing your initial findings in the context of the larger marketing environment. The objective here is to discern competitors’ strategies, identify growth opportunities, and determine if your strategy may need to be adjusted.

We suggest beginning by comparing your data with broader market metrics, such as total traffic share, to determine whether the market is expanding or contracting. After that, you can narrow your focus to specific channels or competitors.

As an illustration, overall market traffic is declining, as are search volumes for key products; therefore, the market is not presently expanding. However, the total traffic share of your main competitors is increasing. From this, you can deduce that they are thriving and acquiring market share from other competitors in the industry – possibly from you.

The next stage is to examine specific channels or individual competitors, as this will help you determine your next course of action. Using the preceding illustration, you have already determined that the market is declining. Now, you notice that competitors are decreasing their PPC spending while simultaneously increasing their social media traffic. This may imply that they are shifting their PPC expenditure to social media, as paid search may no longer be effective in a declining market. These insights will provide you with the knowledge and opportunity to proceed.

These three stages will provide you with a comprehensive comprehension of the market and competitive landscape and enable you to determine the next steps in your strategy.

There are numerous competitor analysis models available for use. We have hand-selected several useful frameworks for conducting analysis. The optimal paradigm is the one that aligns with your unique business objectives.

If you wish to identify your unique selling proposition in comparison to competitors, the Points of Parity & Points of Difference model is appropriate; however, if you are searching for new opportunities in the market, a SWOT analysis may be more suitable.

The Points of Parity and Points of Difference model by Keller is a straightforward method for comparing your brand to those of its competitors. It assists in identifying three crucial factors:

This is the segment or category to which the business belongs and in which it competes, such as gyms.

These are the characteristics a business or product must possess in order to be considered by the intended market. Going back to our example of gyms, if your gym lacks a cycling studio or cardio area, the target audience may not view it as a viable alternative.

These are all the elements that set your business apart from its rivals, or your USPs. In the context of gyms, a point of differentiation could be the addition of massage chairs, a swimming pool, or complimentary post-workout protein drinks to a cycling studio.

The analysis could appear as follows:

The SWOT analysis has been around for a very long time, and for good reason! It categorizes business information into four categories.

Internal components that are beneficial to a business (e.g. brand equity, marketing budget, internal culture)

Internal components that are a disadvantage to a business (e.g. team structures, lack of quality tools and tech)

External factors that show an opportunity to a business (e.g. product innovations, partnerships)

External factors that are a threat to a business (e.g. replicable products, barriers to entry, the economic situation)

External factors that are a threat to a business (e.g. replicable products, barriers to entry, the economic situation)

The Five Forces of Porter is a framework for analyzing competitors by concentrating on five segments.

The ease with which new enterprises can penetrate a market.

How many alternative products are available on the market?

The number of consumers in the market and how their presence may influence pricing.

The number of suppliers in the market and their potential impact on pricing.

The number and relative strengths of a company’s competitors.

There are numerous instruments that facilitate the collection of all necessary data and insights. We have compiled a list of our favorite items. You should ideally use a combination of tools and investigation to validate your findings.

This is a potent tool that enables you to obtain competitive intelligence. It will assist you in determining how much traffic they generate and from what channels. Are you or your clientele performing better or worse than the competition?