Competitive analysis is a double-edged sword. It’s one of the most-requested tasks we marketers are asked to perform, but done improperly, it’s fraught with danger. On one hand, competitive analysis helps us to understand our place in our industry’s ecosystem. We learn what the general best practices are, what other companies do or don’t do, what’s working for others. On the other hand, competitive analysis can lead to paralysis or reactive management, causing unnecessary panic or unrealistic expectations of what marketing can achieve.
When we use competitive analysis well, we truly understand our competition. We identify their unique selling proposition, their strategy and tactics, even the people doing the work for them. We will often find blind spots in our competitors, things they should be doing that they’re not. Steve Jobs famously reinvigorated the tablet computing industry with the iPad, an industry that Apple’s competitors failed to understand for decades.
Competitive analysis can also be a trap. It’s not uncommon for C-suite executives to become obsessed with the competitors, to demand that a company match every competitor’s move, especially if the competitor is a leader in the niche. The corporate graveyard is filled with businesses that matched a competitor’s strategy, not realizing that the competitor was ailing and following their lead to certain doom.
For example, if a competitive analysis shows that our key competitor earns twice as much engagement in social media, we know to look at what they’re doing. However, if our analysis isn’t thorough, or we report it poorly, our stakeholders may simply demand that we also double our engagement rates – even if we lack our competitor’s resources.
Use competitive analysis to find another perspective on our audiences. With our competitors and our own data, we understand as much of our audience and potential, addressable audience as possible. What audience members do our competitors attract that we don’t? What behaviors do they elicit? What content and themes appeal to their audience?
Correctly interpreted, I should glean an understanding of what kinds of content I should be creating that the others do well for that I’m currently not. Once I know what the audience wants, I develop an action plan to
A Simple Competitive Analysis Test
Here’s a simple test to understand whether we’re using competitive analysis effectively or not.
- When we are “doing it right”, competitive analysis should open up new questions to ask, of our business, of our processes, of our customers, of our market.
- When we’re “doing it wrong”, competitive analysis shuts down curiosity with rigid, inflexible requirements to copycat, to mimic, to do nothing that the leader isn’t doing.
At the end of a competitive analysis, do you have new things to try? Do you have new questions to ask? Do you have new ideas? Or are you more constrained than ever? Answering these questions tells you how well your organization uses competitive analysis.
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