6 Biggest Mistakes to Avoid When Running a Competitive Analysis
A competitive analysis can help identify the “white space” in the market—areas where the market is being ignored and where opportunity presents itself for a company to move in to innovate and expand. Running a competitive analysis will help you see how your business stacks up against others in the market and where the unique opportunities lie—ultimately revealing ways to stay competitive.
So, how do you get started with a competitive analysis? We’ve outlined the questions you should be asking to get to the meat of your competitive advantage in our downloadable guide, but first, let’s take a look at what not to do.
01—Only paying attention to your primary competitors.
It’s easy to identify and assess direct competitors, but you also need to be aware of those sneaky indirect rivals—your secondary competitors. They may not offer the exact same goods and services as you, but they might have a comparable market reach or target audience which means they could indirectly take business away from you. Comparing and analyzing only primary competitors is insufficient. It can lead to incomplete information and make your overall competitive analysis accidentally deceitful…it is mistake #1 for a reason, after all.
02—Reviewing outdated competitor information.
This one might seem obvious but make sure the information (numbers, statistics, articles, interviews, websites, etc.) you find and use is up-to-date. Reading an article about the competition's new initiative? Make sure you check the date when it was published. Reviewing advertising campaign stats? Make sure it is a current or a more recent campaign and the stats are accurate. There’s no use in comparing yourself against an outdated version of what the competition used to be.
Now, that being said, there is great value in knowing your competition and their evolution as a company—it’s just not necessary for a competitive analysis of the competition’s current state. Focus your research on their evolution and then speculate on their future trajectory and/or market moves.
03—Keeping your target audience too generalized.
Narrow your focus to specific demographics (e.g., geographics, age, race / ethnicity, gender, etc.) or common traits, behaviors, intuitions, and anything that might set these customers apart from the rest. Who are they targeting? What campaigns are for which segments? Are these campaigns accomplishing their overall goal? What are they doing right? Wrong? Just like how you should understand your own customer segments, you should also dive into how your competition segments its audiences and how each strategy works together. One tactic that might work for the competition, if not targeted toward a customer segment that resembles your own, may fall short for you.
Keep in mind that your competitors are not an exact replica of your company. They will likely have variants in their customer segments, their social strategies, and other nuances that may not matter to your specific audience.
04—Getting caught up on numbers without identifying patterns.
1, 3, 7, 9, 13—what can you gauge from this sequence of numbers? They’re in a pattern that increases incrementally by 2 and then by 4. In a competitive analysis, identifying patterns is key—but it’s only the start. If you can use the key to crack the code, you are well on your way to standing out against the competition.
For example, learning how many followers a company has or how many website views they get per month is interesting information, but not exactly helpful. Look at when and why they receive such attention. Do they have a specific formula for their social posts? Have they nailed the time of day posting works for them? What kind of content are they providing on their website that creates the most traction? These are the patterns you should be looking for within the numbers—what story are the numbers telling you?
05—Believing this is a “one and done” process.
Competition changes. You not only have to keep up with general changes in the market—but also with competitor changes and how those changes may affect your approach. Set a regular schedule to review competitors and update any information you have on them to stay sharp. Vigilance and innovation are the keys to blowing past the competition and updating your competitor information regularly will help.
Don’t overlook the newbies. Make sure to keep an eye out for up-and-coming competitors within or close to your sector of the market. It’s not just about keeping tabs on the major players in the field—but also the other guys that are coming up and breathing down your neck.
06—Continuing with the same old strategies.
You’ve done all the work to dive into your competitor’s information, you’ve analyzed the data, you know how you fit in the marketplace, and how you can trample the competition, so why aren’t you implementing new strategies with these findings? Don’t leave them to collect virtual dust on your servers, only to be forgotten. Brainstorm ideas to make a splash in the market, rise above your competitors and beat them in the race to reach your target audience. Use this information to put together a plan for next steps to drive change and to not only keep up with, but dominate the competition.
Getting Started With a Competitive Analysis
Now that you know what to avoid, download our Competitive Analysis guide to get started on gaining a competitive edge over your competitors.
