You have launched a business in India, you have been working well for a year or more, you have good service and reasonable prices, but such metrics as LTV (customer life cycle), Customer Retention Rate (customer retention rate) are not satisfactory. This means that there is a better offer on the market from your competitors. To return customers and increase your profit, you need to analyze your competitors: find what attracts customers and offer some unique advantage, create value.
Competitor analysis is needed when you want to launch a new product or service and do not know how to approach it. Before promoting it on social networks, creating a new website, expanding the assortment, check out how your competitors have already done it. You can prevent their mistakes and do better.
Preparing for Competitor Analysis
Before proceeding to the comparative analysis of competitors, it is necessary to carry out preliminary works.
First, be clear about your competitors. How to find them?
- Using analytics services. For example, SemRush will find competitors and show which ones are the most dangerous. If you need free analysis, see the statistics of relevant search queries in Google Analytics.
- In search queries. Type in the search bar a query by which clients find you. And all the sites before your platform in the search results are your competitors.
- In industry rankings. This method is suitable for medium-sized businesses that operate not only in one region.
- At themed events. Conferences, fairs, online events – search the information about previous events or find upcoming ones.
- In the shops. If your products are sold offline, just take a look at the store shelves. If you work with online aggregators like Ozon, check out your directory neighbors.
Secondly, define the objectives of the competitive analysis, so as not to analyze unnecessary information.
Third, conduct a survey of consumers in the market to form an understanding of what the target audience knows about your product and about competitors’ products, assess the level of knowledge and loyalty.
What if it is the first analysis?
Like in any field, it is unnecessary to worry about doing something for the first time. For instance, if you have decided to try yourself in Forex trading, there are various approaches. You may do everything on your own, learning the market basics from educational blogs provided by brokers like FXTM and applying the knowledge in practice in a demo mode. Alternatively, you can entrust the decision-making process to professionals, in other words, to resort to a copy trade approach.
So, if you have decided to try on your own, here are essential steps to take.
1. Assess the overall level of intra-industry competition
The more intense the level of competition in the industry:
- the faster the market environment changes;
- the more important is mobility and quick reaction to changes;
- the higher the level of required costs, personnel qualifications, and expectations from the product;
- the more difficult it is to find a free market niche and a successful competitive strategy;
- the higher the risks of a decrease in long-term profit;
- the higher the level of development and market saturation;
At the first stage of the competitive analysis, determine the number of players, the rate of market growth, the dynamics of the emergence of product groups, and new products in the industry. Conclusions at this stage should be made regarding the intensity of competition, the prospects for its tightening, and forecasts of changes in the market for the next three years.
It is better to collect data for 3-5 years, but in the absence of such information, 1-2 years will be enough. The objective is to clearly understand the trend and correctly predict the future position of the market.
2. Build a map of competitors
A competitor map will help to highlight those companies that drive the market, determine the rules of the game in the industry, and can become examples of successful decisions and strategies.
It is easy to build a map, it is enough to determine the market share and sales growth rate for each competitor.
What conclusions can be drawn from the information received? Make a description of each competitor:
- Competitors with a high market share and high growth rates are setting the rules of the game in the market.
- Competitors with negative or low growth rates can be a good source for business growth.
- Competitors with high growth rates can report successful sales techniques.
3. Conduct a comparative portfolio analysis
Identify your competitors’ portfolio and compare it to your company’s portfolio. Be sure to highlight the key lines of business for each player. Determine the competitors’ bestsellers for each product category and prepare a comparative analysis of your products.
The surest way to get a true assessment of the products of your company and competitors is by carrying out a consumer survey and blind tests (without packaging and the ability to identify the product with the manufacturer).
4. Conduct a price comparison
Distribute all competitors by main price segments:
- premium segments.
There are plenty of other indices to compare and analyze. However, at this stage already, you will understand which direction to take in the development of your business. Follow the example of the most successful companies in the niche.
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