How to Write a Competitor Analysis for Your Early-Stage B2B Start-Up
In the highly competitive world of B2B, understanding your competitors is essential for the success of your early-stage business. By conducting a thorough analysis of your competitors (aka competitive analysis), you can gain valuable insights that will help shape your content strategy and differentiate your offering. In this article, we will explore the benefits of doing a competitive analysis and provide a step-by-step guide – and all the competitor analysis tools you need – to conduct one effectively.
Before diving into the process of competitor analysis, let’s discuss why it is crucial for your early-stage B2B business.
Here are the Key Benefits of Doing a Competitive Analysis:
Identifying market trends and opportunities:
By analyzing your competitors’ strategies, you can gain a better understanding of the current market landscape and identify emerging trends and opportunities. This knowledge will enable you to adapt your content strategy to meet the needs of your target audience effectively.
When conducting a competitor analysis, you will not only gain insights into what your competitors are doing but also understand the reasons behind their success or failure. By studying their content strategy, you can identify which types of content resonate well with your target customers, and leverage this knowledge to increase your own competitive intelligence, and to create engaging and valuable content to increase your business growth rate.
Furthermore, analyzing your competitors’ strategies will help you identify any gaps in the market that you can exploit. By understanding what your competitors are not offering or addressing, you can position your business as a unique solution provider, filling those gaps and offering something different to your customers.
Discovering gaps in the market:
By analyzing the key features of your closest competitors’ products, you can identify gaps in the market that your business can fill. These gaps represent opportunities for differentiation, allowing you to provide unique value to your customers. With your thorough competitor analysis in hand, you can tweak your business decisions and then design a competitive marketing strategy that emphasizes your unique value proposition, attracting customers who are looking for something different.
Additionally, by identifying gaps in the market, you can also uncover untapped customer needs and pain points. This knowledge will allow you to tailor your content to address these specific needs, positioning your business as the go-to solution for customers facing those challenges.
This analysis can help you improve your existing customer retention as well. Knowledge of your major competitors’ customer experience is crucial to differentiating your value throughout the customer lifecycle. You can provide better customer service, be more engaged on social channels, and build customer loyalty, simply by making sure you’re filling needs that your competitors are neglecting throughout the customer journey.
Deepen Your understanding of your target audience:
By studying your competitors’ customer base and engagement strategies, you can gain insights into the preferences, needs, and pain points of your target audience. This knowledge will help you tailor your content to resonate with your potential customers.
When conducting a competitor analysis, it’s not just about analyzing their products, services, or advertising tactics. It’s also about understanding their customer base and how they engage with them. By studying their customer demographics, behavior patterns, and engagement strategies, you can gain valuable insights into your own target audience. insights that answer a lot of your burning questions about customer engagement and customer loyalty.
By tailoring your content to resonate with your target audience (at every stage of the buyer’s journey), you’ll build credibility — ultimately you’ll be able to market with ease.
How to do a Competitor Analysis
Now that we understand the benefits of competitive analysis, let’s dive into the step-by-step process of conducting one:
Step 1: Identify Your Competition
The first step is to identify your different types of competitors.
Direct competitors offer similar products or services targeting the same market segment, while indirect competitors may have different offerings but cater to the same customer needs. It is important to have a comprehensive list of both types of competitors for your analysis.
When identifying your direct competitors, consider product similarity, target market overlap, and geographic reach. Look for companies that offer similar solutions and have a strong presence in your industry.
For indirect competitors, think about businesses that may not offer the exact same products or services as you, but still compete for the same customers. These could be companies that solve the same problem using a different approach or alternative solutions that fulfill similar needs.
In addition to direct and indirect competitors, a third category to consider is replacement competitors. Replacement competitors are those businesses that offer alternative solutions to the same customer needs or problems but may not be immediately apparent as traditional competitors. These alternatives can often disrupt the market and distract customers from your products or services, driving traffic away from your services.
Replacement competitors may emerge from entirely different industries or may be startups using innovative technology to address the same customer pain points. They can pose a significant threat if they offer a more convenient, cost-effective, or novel solution.
For example, let’s consider two B2B businesses as examples of replacement competitors:
- Virtual Collaboration Software: A B2B company that offers a cloud-based virtual collaboration platform for remote teams to work seamlessly. While their direct competitors are other collaboration software companies with similar features, an example of a replacement competitor could be a telecommunications company that launches a cutting-edge virtual reality workspace, offering a unique and immersive collaboration experience. As a result, some businesses may switch to this alternative solution, finding it more engaging and productive.
- AI-Driven Customer Support: A B2B company providing AI-powered customer support solutions. Their direct competitors are other companies offering similar AI support systems. However, a replacement competitor could be a company from the gig economy, where businesses are opting to use a crowdsourced customer support service instead. This alternative may offer a more flexible and cost-effective approach, attracting some businesses away from traditional AI support providers.
Identifying replacement competitors is crucial for businesses to remain agile and adaptable in a dynamic market landscape. Keeping a close eye on emerging technologies and new players outside your industry can help you proactively respond to potential disruptions and stay ahead of the competition.
Step 2: Create a Competitor Matrix
A competitor matrix is a valuable tool used in competitor analysis to compare and assess different companies based on various parameters. It enables businesses to gain a deeper understanding of their competitors’ strengths, weaknesses, and market positioning in different areas. By organizing this information systematically, you can uncover critical insights to inform your own business strategy and stay competitive in the market.
To create an effective competitor matrix, follow these steps:
Action 1: Outline and include key factors in your competitor matrix:
- Mission Statement: What does the company aim to accomplish?
- Pricing Strategies: How are they earning revenue?
- Product Features and Quality: List their product features and note their quality.
- Target Audience Demographics: Who is their target audience? How much audience overlap is there with your target (bonus: analyze the audience growth rate to predict market share growth over time).
- Rate their Market Presence: How present are they on digital marketing channels and what tactics are they using? See if you can identify their traffic sources and their top-performing content.
- Make sure to look at: SEO, PPC, social media distribution, email marketing, content marketing, influencer marketing, remarketing/retargeting, affiliate marketing, display advertising, and overall advertising efforts. (You can even take it a step further and do a full social media competitor analysis. HubSpot provides a great guide for this).
- Customer Reviews and Feedback: Evaluate what customers are saying about your competitors to gauge their reputation, customer satisfaction, and customer loyalty.
Action 2: Setting up the Matrix:
Create a table with your competitors’ names listed on the left axis and the key factors mentioned above as column headers. Fill in the relevant cells with data collected through market research and analysis. Utilize various sources such as competitor websites, social media platforms, customer reviews, and industry reports to gather accurate and up-to-date information.
By using a competitor matrix and including these key factors, you can gain valuable insights into your competitors’ overall market strategy. This, in turn, will enable you to make informed decisions, identify potential areas of improvement, and develop effective marketing and business strategies to enhance your competitive advantage.
Step 3: Perform a SWOT analysis of your own business
Conducting a SWOT analysis of your own business allows you to assess your strengths, weaknesses, opportunities, and threats. This analysis will help you identify areas where you can excel and areas where you need improvement.
Start by examining your strengths. What advantages does your business have over others in your corner of the market? It could be your unique expertise, a strong brand reputation, or proprietary technology. Next, identify your weaknesses. What areas do you need to improve in order to compete effectively? This could include things like limited resources, a small customer base, poor engagement, or a lack of brand awareness.
After evaluating your strengths and weaknesses, look for growth opportunities in the market. Are there any emerging trends or untapped customer needs that you can capitalize on?
Finally, consider the threats that your business faces; such as new businesses, changing customer preferences, or changes to the growth potential of your industry.
Step 4: Identify your areas of unique value and differentiation
Based on the information gathered from the competitor matrix and SWOT analysis, identify your business’s areas of unique value and differentiation. For example, focus on specific features, pricing strategies, customer support, or any other aspect that sets you apart from your competitors.
Highlighting these unique selling points in your content strategy and marketing efforts will help you attract potential customers. By clearly communicating what makes your business special, you can position yourself as the preferred choice in the market.
Remember, a competitor analysis is an ongoing process. As the market evolves and new competitors emerge, it’s important to stay updated and adapt your strategies accordingly. Regularly revisiting your analysis will ensure that you have a comprehensive understanding of the competitive landscape and can make informed decisions to drive your business forward.
Use Your Findings to Develop Your Value Propositions
Now that you have a clear understanding of your competitors and your own unique value, it’s time to develop your value propositions. A value proposition is a concise statement that communicates the benefits your product or service offers to your target audience. Use the insights gained from your competitor analysis to craft compelling value propositions that differentiate your business from the competition.
Focus on highlighting your unique selling points. What makes your product or service stand out from the competition? Is it your innovative features, exceptional customer service, or unbeatable pricing? Whatever it is, make sure to emphasize these strengths in your value propositions.
Additionally, consider the specific needs and desires of your target audience (focus on one audience segment at a time). What are they looking for in a product or service? How can you fulfill those needs better than your competitors?
By addressing these pain points and desires, you can create value propositions that deeply resonate with your target audience.
Remember, your value propositions should be clear, concise, and compelling and should communicate the benefits of your product or service.
Competitor Analysis: Key Takeaways and Best Practices
Conducting a competitor analysis is an ongoing process that requires continuous monitoring and evaluation. It is a crucial step in understanding your market landscape and identifying opportunities for growth. Here are some key takeaways and best practices to keep in mind:
Regularly update your competitor matrix:
To ensure the information remains accurate and relevant, updating your competitor matrix regularly is essential. This matrix should include important data points such as market share, product offerings, pricing, customer reviews, and marketing strategies. By keeping this matrix up-to-date, you can have a comprehensive view of your competition and make informed decisions.
Monitor your competitors’ marketing activities:
Staying up-to-date with your competitors’ marketing activities is crucial to understanding industry trends and staying ahead of the curve. Monitor their content creation efforts (on and off their website), their social media strategy, their digital advertising, their PPC campaigns, their SEO ranking and traffic sources, and any other marketing initiatives they undertake. By observing their strategies, you can gain actionable insights into what works and what doesn’t in your industry.
Continuously analyze customer feedback and reviews:
Customer feedback and reviews are a goldmine of information. Analyzing what customers are saying about your competitors’ products or services is helpful. You can use this information to identify opportunities for improvement. Look for common pain points, unmet needs, or areas where your competitors are falling short. By addressing these gaps, you can position your business as a better alternative.
Collaborate with your team to brainstorm innovative strategies:
Your competitor analysis should not be a solo endeavor. Collaborate with your team to brainstorm innovative strategies and tactics based on the insights gained. By leveraging the collective knowledge and expertise of your team members, you can come up with unique approaches to outperform your competitors. Encourage open discussions, idea sharing, and creative problem-solving sessions to foster a culture of innovation.
By regularly conducting competitor analysis and leveraging the insights gained, you can fine-tune your content strategy, differentiate your early-stage B2B business, and achieve sustainable growth in a competitive marketplace. Remember, competitor analyses are not a one-time task. This should be integrated into your overall business strategy.
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