How to analyze your competition (with steps!)
First, let’s talk about why it’s important to check out your competition.
There are many reasons why you need to know who you are up against. When you’re first starting a business do you have any idea what to charge? Probably not. I bet your first reaction is to see what others who do similar work are charging. Also, every business should have a competitive advantage (I talk about that more here.) Once you come up with that advantage you want to make sure other businesses in the area aren’t doing the same thing.
I create a competitive analysis for all my clients, and it’s mostly based around branding. It’s really important that your branding is relevant to the industry. I look for trends among other businesses to be sure my clients fit in, BUT I want my clients to stand out among that industry. Their branding needs to be better than the competition and the only way to make sure I’m doing that is to do a competitive analysis.
Step 1: Identify your style and ideal client
You want to compare yourself to other businesses that are similar. For example, I had an interior design client and her style was mid-century and modern design. I wouldn’t want to compare her to someone who specializes in western design. It’s not the same and they wouldn’t attract the same clientele. A competitor is anyone who would make a client choose between you and them. Along those lines you also want to compare yourself to a business that is trying to attract generally the same ideal client. If you were an interior designer who wants to work with young couples, you probably wouldn’t consider an interior designer who wants to work with couples over 60, competition.
Step 2: Find six competitors (Google is your friend)
There are a number of ways to find these competitors and it does take time and a lot of web searching. The first thing I do is see who pops up first on google maps. I would search “modern interior designers in Phoenix area.” I would then look at each business website and see if it’s a good match. I also only look at businesses with 4 or more stars. Someone who is getting bad reviews will hopefully not be a competitor. My next avenue is Yelp. I do the same thing and search for top modern interior designers in the area with 4+ stars. If you still don’t have six competitors, you could search on Instagram (hashtags are helpful) or specialty websites. For my interior design client, I found most of her competitors on Houzz, a website tailored specifically for those trying to find an interior designers.
Step 3: Build the competitive analysis by answering imperative questions
Now that you’ve gathered your competitors, it’s time to see what they’re all about. Here are questions to answer that will give you an overall feel for what you’re up against.
Is there pricing on their website? What is it?
Would you buy from them? Why or why not?
Do you like the colors they use in their branding? Why or why not?
Do you like their logo? Why or why not?
What feelings do you have while interacting with their website or social media? Do you like those feelings?
Step 4: Find common trends and generate ideas for your brand
You’ll probably have a good idea of general trends in the industry after this exercise. I want you to look through all the competitors you picked and write out common themes. Now you know the general direction you need to go with your brand. All you have to do is brainstorm how to be better! More on that in later blog posts.
If you need help building a competitive analysis, or you want me to review yours, let’s chat.