If you've read Jake's most recent blog post, you know we've decided we're taking ourselves on as a client. As we develop this strategy for what Caddis needs to be online, there are some fundamental elements we must understand about ourselves and our market. The best way for us to get started is by taking time to create a detailed competitive analysis.
How To Define A "Competitive Analysis"
In our industry a competitive analysis can mean any number of things, but for us, it's about looking at our market from the online perspective, and understanding who the thought-leaders and top competitors are in the space. The good news is, because we're online, we have access to tons and tons of data about Caddis and our competition that we can use to gauge the market.
It's often tempting to jump right into analysis or strategy without taking the necessary time to really understand what kinds of answers we're looking for. So, before I write some more posts about exactly how I do competitive analysis, I want to walk you through five important questions to ask before starting a competitive analysis. I guarantee that if you stop and take some time to think about these things before jumping into an analysis, you'll find yourself more focused and find the insights you need among the noise.
1. What are your goals in understanding your competition?
While this is the most obvious of questions, I can't tell you how many times I've seen agencies, clients, coworkers and even myself take off on a project without stopping to really establish the end goals. Do you want to know who your competition is so you can learn from how successful they’ve been? Do you want to identify who you're gunning for in the search engines? Do you want to know what competitors you can reach out and propose partnerships to? The answer may be all of these or something else entirely, but if you don't know from the start what your goals are, then your analysis could go in any number of directions.
2. Who are your customers?
We've written more about conducting audience analyses and developing target personas in other posts, but it is still smart to sit down and think about who your target is going to be. In our case we could think of our customer as businesses, specific employees within those businesses, partner agencies and many others. Understanding who each of these potential customers are and what they need is crucial to understanding what companies are truly competing with you and what companies might seem like they do the same thing but don't at all.
3. How do your customers refer to what you do?
Let's say you sell high-end, luxury marshmallows (I know…just stick with me). Simply calling them marshmallows might feel like you're doing your product a disservice, so you've decided to call them "high quality, sugar-infused magic puffs." That's great and your branding is going to be just beautiful, but you've got a problem…literally everyone in the world calls a marshmallow simply that…a marshmallow.
Understanding that your potential customers may not understand what you're trying to sell them if you call it the wrong thing will help you understand how to position yourself online to best resonate with the potential customers looking for you. Understanding your own positioning and what customers expect will also help you compare yourselves to the right competitors. The best ways to do this are to a) ask your customers directly and b) do in-depth keyword research.
5. How will you measure the competition?
At the end of the day we need to be able to say that "X competitor" is beating us by "Y amount" in "Z category." Categories can include sales, leads, web traffic, PPC position, search rankings, social shares...you name it. The only problem with that is that not every category is relevant for your strategy application. Understanding what metrics are going to tell you the most about your competition will help you guide your research and make better decisions.
If you don't set out with specific metrics in mind then you can easily get lost in the data from your favorite tools and applications and never quite understand what the data is telling you. However, if you have something you're looking for and know that it will answer a question you have, then you're on the right track.
Sitting down and making yourself or your boss or a client answer these five questions is key to conducting a solid analysis of your industry and the competition. You'll likely identify some new angles for research or preconceptions that you weren't aware of that could have seriously hindered accurate results. In future posts, I'll start digging into how we do some of these more specific analyses here at Caddis, but until then comment below and let us know how this process works for you and what kind of questions you ask yourself in addition to these five.