Building your brand: Competition Analysis
Part 5 in our series on building your small business brand.
Competition analysis covers detailed research into your brand’s direct competition (i.e. competition of a similar size, scope, geography, niche) and ultimate competition (competition above your brand or competing for online space).
Why it’s essential
With limited customer attention, you need to know what your competition is offering customers and how they’re marketing and selling to them so that you can differentiate yourself and position yourself where your competition isn’t.
What it covers
Competition analysis covers your direct and ultimate competition, an overview of their offers and products, an overview of their features and benefits, an overview of their branding and marketing activities, where there’s room for you to differentiate yourself and what your strengths and weaknesses are compared to your competition.
How you’ll use it
You’ll use your competition analysis to differentiate your brand from its competition so it can carve out a position on the market. You’ll also use it when designing your website and to direct all your copywriting.
How you’ll create it
Direct & Ultimate Competition
Your direct competition are your competitors who are at the same playing level as you are. These are the companies you’re fighting against for limited market real estate. They’re the ones you’ll have most in common with, whether size, geographic market, offering, target customers, etc.
Your ultimate competition, on the other hand, are the biggest players in your field, the ones who dominate the market. If you’re an online retailer, your ultimate competition is Amazon. If you’re offering something completely new, your ultimate competition is the status quo.
So, first things first, determine who your direct and ultimate competition is. Use Google search and sites such as www.similarweb.com if you’re not sure, or get a trial membership to a keyword tool like Moz Explorer to help you gather your competitive intelligence. The resources out there are endless, so there’s no reason to resort to guessing.
Offer & Products Overview
Now that you have a list of your competition, look closely at what they’re offering. What problem are they solving? For whom are they solving it and how? What are the benefits they’re offering?
In a crowded market, these will be similar across competitors, so you’ll want to look at how they position their offer to differentiate themselves. You’ll need to do the same.
Also look at what products or services they’re offering and what their prices are and what pricing structure they’re using. This will let you know where your own products and prices fit in. And be sure to write all of this down in an Excel sheet for easy reference.
Features & Benefits Overview
Next, look at each competitor’s brand features and accompanying benefits, along with more specific product or service features and their benefits. You’ll want to have better features and unique benefits, or unique positioning, so customers will start choosing your over your competition. Add all this to your Excel sheet.
Branding & Marketing Overview
Finally, you’ll want to look at how your competitors brand and market themselves. Look at their websites, their headlines, sub headlines, their logos, their visuals, etc. Note the style of language, each brand’s personality, how its positioning itself. Check out their social media profiles, brochures, videos, etc. This is what your brand needs to do better in order to stand out.
Include this information in your Excel sheet and take screenshots of their websites, etc. to create a swipe file for easy reference.
Differentiation from Competition
Now that you know what your competition is up to, you need to determine how you’re different and how that difference is a benefit to your target customers. If you realize that you’re not in fact different, then look for ways that you can make yourself different. Will look at this in greater detail in the next lecture about Positioning.
Strengths & Weaknesses Compared to Competition
As a final step, you’ll want to take a good hard look at your brand compared to your competition and write down all your strengths and weaknesses compared to them.
Your strengths are what you’ll want to focus on in your branding and marketing. Your weaknesses are what you’ll need to work on.
This post may be short, but your competition research is vital. As generals like to say, you need to know your enemy.
So take the time to get to know what you’re up against, otherwise your operating on naiveté, ignorance and even arrogance. Realism will take you much further, so don’t bury your head in the sand by ignoring this part, as boring as it may seem.
Once you’re done, you can move on to the really fun part, positioning your brand.