by Wesley McQuillen, Principal at ALTER Strategies
So you’ve determined there’s a market for your business idea. How do you ensure you get your piece of the pie? Conduct a competitive analysis.
A competitive analysis is a granular assessment of your competition: who they serve, how they operate, how they market themselves, how well they’re doing, and where they might be letting people down.
1. Who are my competitors?
You can determine who your competitors are by searching online for keywords related to your business niche. Get creative in your search, search some alternate phrases to find them all. Other businesses that do exactly what you do are your direct competitors, and businesses that serve similar needs in the same industry are indirect. Create a list of them by category and save URLs of their websites, Google Local listings, social media feeds, and URLs to important press pieces about them. Create a Google Alert for each one so you get emailed when they appear in the news. Determine who their target demographics appear to be based on advertising and visible customer engagement.
2. What products do they offer?
This will usually be on their website. Note the variety of product offerings, the price points (and designate whether they are low budget, average, or premium pricing), the product/service quality, and the production quality of how products are presented (the photography, web design, written copy).
3. How successful do they appear to be?
This can be determined in a few different ways – if they have physical locations, you can observe how full the parking lot is, how many people are going in and out, how many cash registers they are operating normally to extrapolate potential gross sales numbers. Take mental notes on how they operate while you visit. Online, you can get estimates of their traffic by checking sources like Alexa and Ahrefs. You can also observe their reviews on Google Local, Yelp, Facebook, and Travel Advisor for general trends. Take notes on things they are praised for, and things that come up as common complaints. Search for job listings to see whether they might be growing, and what parts of the company they are hiring for the most.
4. How do they market themselves?
Do they do mostly traditional marketing (like radio, print, billboards, signage) or digital (like PPC, paid social, blogs and content marketing)? You can get a good guess of their marketing budget by knowing what they’re doing. If you haven’t already, create a Business Page on Facebook and then at the bottom of the Insights tab for that page, add your competitor’s pages to “Pages To Watch” and you can view the changes in Total Page Likes, Posts Per Week, and Engagement Per Week of your competitors.
Understanding all of the above will help you determine who they are, what’s working for them, what’s not, what segments of the market are underserved, things that you can do better than they currently do, and what their potential gross sales are. This intel can all inform the choices you make while you write your business plan and marketing plan.
Please join us next month as we look at how to describe your management and organization. You can read past articles on how to start a business here and here.
Wesley McQuillen is Principal at ALTER Strategies and creates marketing strategies that help age-restricted and highly-regulated businesses to increase sales and stand out in a crowded field while navigating complex regulations.
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