Startups, entrepreneurs and, more often than not, established businesses often miss out on potential profits and additional revenue due to lack of proper competitive analysis.
Competitive analysis looks at what everyone else is doing, and how they do it – not the same as market research, which concentrates on who will potentially want your product, content, or services.
By undertaking a complete analysis of who is competing in your niche and what their strengths and weaknesses are, you will be able to position your enterprise properly. With enough information, you’ll often find startling gaps in the market – even over saturated ones, like the online marketplace (in pretty much every niche).
Two types of value offering
Whether you are a blogger, an app developer, a traditional business, consultant or service provider, your value offering is going to be one of the following (each with its own set of advantages and challenges):
- completely original, unique and new
- tried and tested
Either you are offering something that is completely new, in which case your main challenge is “educating” the market about what is so useful and valuable about your new way of doing things. This is not as easy as it sounds – more often than not, consumers don’t want to have to learn something completely new, they just want stuff to make their lives easier in a way they can understand quickly and easily.
Alternatively, you’re offering something that people are already familiar with, in which case the challenge is to distinguish yourself from everyone else. More often than not what sets companies apart is quality products and services, backed up by great customer service and/or support. But there are other ways… like kickass marketing.
The value of competitive analysis
In either case, knowing what everyone else has to offer and how they are offering it is extremely important. For example, if you are doing something new, then other businesses may be willing to enter into strategic partnerships with you (because you are competing in slightly different areas). Established partnerships can help spread the word about your new offering.
Alternatively, you might find that everyone offers a certain product or service in the same way, in the same price range. If this is the case, then it must lead you to consider how you can offer the same value for less, or far greater value for only slightly more.
Case study: SEO service positioning in a saturated market
By way of example, consider something ubiquitous like SEO services. There are thousands of sites offering SEO website reviews (where they scan your site, look at the main keywords, score you against various metrics, and so on). Most of these offerings are around $50 – $100. But, the one thing they have in common is that they are all automated. In other words, they don’t do anything you can’t do yourself with a little bit of effort.
Your alternative, if you really want a solid SEO website review, is to go and find an experienced consultant (because there are plenty of chancers who will do a rubbish job quite cheaply), who may take a day or so to look at your site, charging out at say $80 – $120 per hour. This ends up costing you anywhere between $700 – $1000.
The vast majority of choices for SEO (and other important website feedback services) are therefore an automated, inflexible report that doesn’t give you expert, human oriented advice for $100, or forking out up to $1000 on a pro.
Understanding this, there are a few offerings like the online business report card that take the middle ground. You get a highly trained expert, who looks over your site, using a pre-defined range of metrics (put together based on years of experience) and gives actionable, helpful human feedback, for far less than hiring a consultant.
This value offering is distinguished from the vast majority of competitors, despite the massive amount of competition in this niche, because it provides the same quality of service as a professional consultant for around half the price. By the same token it is cheap enough that businesses wanting genuine feedback should feel the additional cost is worth it, given the human value provided over the automated reports.
Competitive analysis, market positioning… and repeat; always repeat
In the same way, you have to look at your blog, eCommerce store, affiliate marketing site, or whatever your enterprise is, and see where you can jockey for position. Once you have found a gap, you can position yourself in it and market like crazy.
Remember, competitors will catch on as soon as you start having success, so you have to keep innovating in order to stay ahead of the pack.
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