Snooping on the Competition: How to Conduct a Killer Competitor Audit
The ultimate guide to conducting a competitor audit
Before delving into the next steps, it’s essential to understand what a competitive audit is and isn’t.
The primary objective of a competitive audit is to assess your competitors and their practices. At this stage, your focus should be on gathering factual information and being non-judgmental.
It’s crucial to remember that if you’re just starting out, there could be a good reason why your competitors do things a certain way.
Perhaps they have tried multiple approaches before and found that the current one works best for them. Therefore, it’s important not to jump to conclusions and approach the audit with an open mind.
Why do they even matter?
Performing a competitive audit is a crucial step for any business as it provides a wealth of information that can help you understand the market saturation and your competitors’ strengths and weaknesses.
By putting yourself in the position of a customer during the audit, you can gain valuable insights that can be used to your advantage later.
It’s important to note that a competitive audit should not be a one-time activity.
While you may be able to get away with conducting it once a year in some industries, in many cases, it should be an ongoing process to keep up with changes in the market and competitors’ strategies.
In this blog post, we will cover the key areas of a competitive audit and how to perform one effectively to gain the insights you need to stay ahead of the competition.
Step 1 : Identify your competitors
Let’s discuss different competitor types
Direct
These refer to businesses that offer a product similar to yours and cater to the same target market.
For instance, if you plan to establish a company that specializes in delivering exceptional cocktails for home parties, your direct competitors would be other sellers who offer the same product to customers.
Indirect
Indirect competitors offer products or services that are adjacent to your target market. They may not sell the same product as you, but they cater to the same underlying need.
For instance, if you run a business selling cocktails for home parties, an indirect competitor could be a nearby coffee shop that offers drinks that could be consumed instead of cocktails.
How to find them
If you’re not familiar with it, start by identifying your ideal customers, and then follow the steps outlined below for each competitor type.
Direct competitors: Put yourself in the customer’s shoes and think about how you would search for your product. Would you turn to Google, Etsy, or another platform? Could you simply walk down the street and find a local coffee shop that serves delicious cakes? Write down the steps you would take, and follow them to create a list of competitors. Depending on the time you have available, you may want to focus on the top five to ten competitors.
Indirect competitors: Consider the problem your product is solving. As a customer, what other solutions might be available? Write down all of the potential solutions, and then select a few to focus on, depending on the amount of time you have available. Once you have your list, follow the same steps as you did for direct competitors to identify the competition.
Analyse Competitors- Set Up
Now it’s time to get organized! Consider where you would like to conduct the analysis. There is no right or wrong answer since it needs to work for you.
You could use a paper, an Excel spreadsheet, or a Notion template, which is our personal favorite. Whatever it is just make sure it works for you!
Set up your template with rows representing each competitor and each column representing a different feature you will compare. First, list all the competitors you want to analyze.
Then, list all the features you plan to compare, including the competitor’s type (i.e., direct/indirect) and the date of the analysis
Analyse Competitors- Products and Services
Start by identifying what your competitors are selling.
This information is usually readily available on their website. If not, is there a logical reason?
Take note of all the features and benefits they offer, and think about the problem they are solving. Is it clear and easy to understand? By doing this, you can identify any gaps in the market that your business can fill.
Analyse Competitors- Online Presence and Marketing
Now is the time to gather more information on your competitors by thoroughly exploring their online presence.
Engage with their website, social media, and even download their app. Sign up for their newsletter to see what kind of content they’re putting out and how often.
Pay attention to their social media following and engagement. Do they seem real or are they mostly bots? Analyze the type of content they post and whether or not it resonates with their audience.
Additionally, you can analyze the website traffic of your competitors using tools such as Google Analytics.
This can give you insights into their audience demographics, geographic location, and even popular keywords they’re using to drive traffic.
Take note of which social media platforms your competitors are active on and consider whether or not this is where your target audience is spending their time.
Analyse Competitors- Pricing
it’s important to focus on the prices of products or services that are most similar to yours, even if the competitor targets different customer tiers.
By doing this for the majority of your competitors, you should start to see patterns emerge.
However, just because your competitors are pricing their products or services a certain way, it doesn’t mean you have to do the same. Disruptive companies often offer very different prices, which can coincide with greater efficiencies or a revolutionary value/product.
Remember, building a solid foundation takes time, so tailor these steps to fit your own product and industry. There’s no such thing as an overnight success!
Now that you’ve done all of the above competitor by competitor, look at the data and pick up similarities, weaknesses or gaps you can see.
Thanks for reading! What are your thoughts?
We are just getting started bringing you all you need to start and get better at either running your own thing.
Follow us for more business tips in the future. You can also subscribe to the twice-monthly newsletter here
