You take on a new client: an ice cream brand that isn’t quite on the level of Ben & Jerry’s, but it’s on the rise and has serious potential to disrupt the industry. But, before you can start thinking big, you need to get a better picture of the landscape for the product to find how similar products in your industry are doing — and more importantly, what they’re doing. You need to do a competitive analysis.
Competitive analysis needs to go much deeper than looking at your competitors’ social media or advertising efforts for comparison. Take a look into their history, who they consider their closest competitor, and where they’re succeeding and falling short on selling their products.
Putting together a good competitive analysis demands a good understanding of industry hierarchy — for instance, still using the up-and-coming frozen treat brands as an example, who is the competition you’re measuring against? It isn’t the big leagues of ice cream but brands of a similar size and awareness as your client’s.
The strategic advantage behind compiling a competitive analysis is that it helps you get a better picture of the competition so you can try to emulate their success but also recognize and avoid their failure. They take some effort to put together, so here are three reasons why it’s worth the time.
They help to establish benchmarks.
Benchmarking is the process of building points of reference against which you can measure growth. Say you do an analysis of ice cream or frozen dairy treat companies similar to your client. To form a benchmark, take the metrics for how well their Facebook posts do, combine them for an average, and set that as your benchmark to surpass.
Set benchmarks for things like engagement, social media reach, impressions, and return visitors to keep the pace — and eventually set the pace — in your client’s corner of the industry.
You can use them to identify and fill crucial gaps in your client’s business.
I know plenty of marketers who’ve worked on campaigns for brand new companies and would agree that the Wright Brothers had an easier time getting off the ground than most startups do. This is because running a business — especially for the first time with no guidance — can be, in general, a quagmire.
Take a look at the kind of roles your competitors are looking to bring on. What gaps are they filling that your client also has?
Hiring is about so much more than bringing on new staff. When your competition brings on someone for a totally new role, they’re doing it because they sense a change in the industry and want someone on their team who will ensure smooth sailing and a successful campaign.
They help you determine you’re ‘why.’
When a potential customer has your client’s product and a similar product side by side, the “why?” of your client’s brand is often going to be the determining factor in closing that sale. I’ll tell you something that most clients are too precious and protective of their brands to accept: most similarly priced products in an industry are pretty much the same.
If your client’s gallon of ice cream costs $10 and the competition’s cost $11, there’s unlikely to be any meaningful difference between the two products. The difference is the “why.” Why should a customer buy your client’s brand over the other? Having an appealing “why” will be arbitrary to some customers, but it will be a deal-sealer to others. For instance, if the competition supports some political causes that a lot of people might find unsavory, standing in opposition to those could become the basis of your “why.”
Data is what greases the wheels of a campaign and helps your agency make the tactical decisions that ensure winning campaigns. The more insight into your client’s field that you have, the better position you put yourself in to help them dominate it. For all these reasons and more, competitive analysis is an essential part of the onboarding process for all clients. Because, as they say, know thy enemy.
But remember, if you want to keep a client long-term, no resource that you create for a campaign should be considered a one-and-done project. As your marketing strategy succeeds and your client ascends within their industry, the landscape will rise to meet them. It’s important, then, that your competitive analysis be constantly evolving to keep updated on potential threats.