What is Competitor Analysis in Marketing?

On the surface, a competitor analysis helps brands identify competitors in an industry and reveals any winning marketing strategies. This intel can be benchmarked against your own data to give you a working idea of where you stand in the market. However, today’s competitive analysis goes well beyond that. Let’s check it out . . .

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Before we did into the what, why and how of competitor analysis in marketing, here are some stats speaking to the need for a robust social media tool:

  • As of 2020, 38 million new businesses have opened up each year. This is a 75% increase from 2010.
  • In the first three months of 2022, over 1.26 million new business applications were filed.
  • 87% of businesses believe big data analytics capabilities, such as competitor analysis, will alter the competitive makeup of their industry.
  • And 89% believe that if you’re not using or planning to use competitive intelligence, you’ll lose your market position.

With more and more competitors entering the global business arena daily, understanding the competitive landscape has never been more important. With that, let’s dig deeper to see how competitive intelligence works, followed by metrics to measure your efforts.

How Competitor Analysis Works

The goal of a competitor analysis in marketing is to evaluate the performance of businesses within a specific category, including your own. When the right intel is captured consistently, it can be utilized to provide data on:

  • Your brand’s share of voice within a category
  • Emerging trends to take advantage of
  • Consumer sentiments towards brands and their products and services
  • Media coverage making waves, from blogs to top-tier publications
  • New product or event launches
  • Merger and acquisition opportunities
  • Potential influencers and KOLs who can amplify your brand, or at least help you better understand your audience/trends
  • Gaps in the competitions’ capabilities––things you can fill.

Additionally, all of this allows you to benchmark your relative position to each competitor out there, revealing untapped potential. Your reward for all this hard work? Stronger business strategies, capturing market share, and giving the competition a run for its money.

Which metrics reveal so much? We’ll cover a few of those now!

Basic Metrics for Analyzing Competitors

The first step in your competitor analysis in marketing is identifying the competitors in your market. And you may think you have a good idea who they are––but think again. As our stats revealed above, new brands pop up on the global marketplace every day. And never underestimate the smaller, independent businesses too! After all, that’s how Cards Against Humanity and Blendtec started out. Even the small fish can grow to be sharks. So, locating and tracking these brands, no matter how small, is critical.

Once you have a good idea of who your competitors are. Monitoring conversations and consumer sentiments which surround competitor brands is the next big step. What are people saying? Are they happy with Brand X? Why or why not? These are all questions which can be answered using a competitor analysis.

For example, our competitive analysis to support marketing efforts in the health and beauty brand aisle reveals consumer behaviors with attached sentiments for two top brands below:

word-clouds

These word clouds offer insight into what consumers think and feel about the brands, as well as their intentions/behaviors. When we look behind these words, that’s when the truth of what’s happening is revealed. Brand A wins many mixed emotions and behaviors and examining the green sentiments we can peel back recommend. Doing so, we find multiple consumers promoting this brand’s cream lip stain. Conversely, when we look at Not Buy in Brand B, we find that consumers love their products, but find their customer service horrible.

These details found in the data can produce change. As a brand seeking to expand operations, the intel contained in these word clouds could bolster your efforts. You’ll want to do further research of course, such as figuring out where consumers are talking, but this is a great starting point and gives you an idea of what other brands’ consumers are saying, and how they feel about them – and about you!

Next, you can compare audiences. Who makes up your audience versus who makes up a competitor’s audience. There may people your competition is connecting with, that you aren’t. With your competitor analysis in marketing capabilities, you can identify who these groups are and what makes them tick.

Below, we have demographics of a popular brand in the beauty space, showcasing common professions of consumers participating in brand conversations. We could also compare other characteristics, such as age and common interests:

professions

These details give you clues that inform messaging and even product creation, helping you relate to your consumer on a more personal level.

And then, it’s important to monitor audience interests and conversations on an ongoing basis. What you find out today may change in as little as a week, sometimes even overnight. Continuing to pay attention to basic metrics such as volume, sentiment and brand passion is critical to staying ahead of everyone else in the game. And when you’re monitoring consistently, it gives you the ability to pivot quickly as needed.

So, what does this look like played out in real life? How do these metrics transform into strategies?

How to Turn Competitor Analysis Data into Strategies

You’ve done the work. You have figured out what’s being said, who said it, where it was said and how they feel about it. Now it’s time to put this data to work for you! And one way is by discovering emerging trends

Emerging Trends Point to 1990s Nostalgia

Take PMG for example. This digital marketing company uses competitive intelligence to perform social listening polls to find out what various consumers in different age groups are talking about. Recently, they conducted a search surrounding nostalgia. Their findings showed that all age groups were talking about it in some way, but it was the millennial age group that were over-indexing when it came to the conversation. They used this intel to help their clients beat out the competition, by harnessing this trend around 1990s nostalgia.

Locating trends is amazing, but you must know how to appeal to different groups. Not every millennial is going to have the same nostalgic reaction to a song, or a fashion. Put two people side by side and you’ll see diverse interests. And those interests require different messaging, as Ayzenberg, a creative services agency, sorted out for one of its gaming clients

Understanding Sentiment for a Gaming Win

In sorting out sentiments for this client, they found negative sentiment. Digging deeper revealed this negative sentiment was due to the exclusion of a game driver. The consumers wanted something form the brand they weren’t providing. Armed with this intel, this client fixed the issue to the delight of existing consumers, while drawing in new consumers

If you had been a competing brand, this would have been a great opportunity to steal some attention by meeting the unmet needs of a competitor’s audience. But you also need to capture their attention in the first place, and an influencer could be a great fit. They certainly have the consumer sentiment ‘pulse’ and can help amplify a message.

The world of influence is taking over and changing the way we do business. The influencer marketing value grew to over 13 billion in 2021. It’s the new way to market and reach your competitors’ audiences in a way you never could before, offering authenticity that just isn’t possible with a traditional ad. And with competitive analysis, you can harness this electrifying new way to market pretty effectively.

There are many more ways to use competitor analysis in marketing, these are just a few examples to give you some food for thought. If you want to see the full potential of competitive intelligence, which goes well beyond the smattering of capabilities we’ve shared here, please reach out for demo.

https://go.netbasequid.com/EB-ImportanceofCompIntel.html

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