A core marketing activity that is often taken for granted is competitor research.

Whether you’re a multinational corporation or a local family-run business, knowing who your competitors are and what they’re doing is essential for achieving and sustaining success.

If you’re a young start-up company, it should go without saying that you’re avidly engaged in competitor research. You’re the new kid on the block, you need to know what’s already out there so you can differentiate yourself and refine your unique selling points.

But competitor research is equally important for large, established enterprises. Don’t fall into the trap of thinking you know it all and continue doing the same thing for years—You will become obsolete. Throughout the life of your business, you should continue to benchmark yourself against the other big players in your industry and keep an eye on the horizon for newcomers who are making a name for themselves.

There are many reasons why competitor analysis is important for the longevity of your company, in this blog post, we’ve narrowed it down to the top five:

1 – New Product Development

In any given industry, competitors are constantly trying to one-up each other through new product development or service offerings. By monitoring what your main competition is doing, you can make improvements to your existing products or adjust your R&D strategies to launch new products that better serve your market needs.

If you know which direction your competitors are going, you can keep up or overtake them by beating them on quality, functionality, or price.

2 – Staying Connected with your Target Audience

By keeping an eye on what your competitors are up to, you can save time and money on conducting your own consumer research. Paying attention to your competition’s marketing tactics will give you insight into market trends, changing consumer perceptions, and communication strategies.

Your direct competitors will likely be targeting your same audience. How are they reaching end consumers? Is their messaging effective? What communication mediums are they using? If it’s working for your competitors, either emulate it or improve it.

This is a particularly helpful practice if you’re a smaller fish in the pond with a tight marketing budget. Let the big fish do the market research for you.

3 – Entering New Markets

Now let’s say you’re expanding operations and want to enter a new market—be it targeting a new customer segment, crossing over into a neighboring industry, or taking the plunge into an unexplored national or international region—there will be barriers to entry and obstacles to overcome.

But if one or more of your competitors have already found a way into the market you have your sights on, there’s no need to reinvent the wheel. You can piggyback on their entry strategies—Work smarter, not harder.

On a side note, you can also capitalize on competitor analysis to identify gaps in your current market. Look at your competition’s geographic reach, there could be underserved areas where you could swoop in.    

4 – Learning from Mistakes

Benchmarking your strongest competition is always wise, but so is keeping tabs on the weakest links. You can learn from the mistakes that your struggling or failed competitors are making. You can forecast industry or operational problems that could likely affect you, then counteract them, avoiding catastrophic pitfalls.

Another good practice is looking at competitor reviews. How many disgruntled customers are there? Are negative reviews becoming more frequent? What are the main reasons for complaints? You can win over a portion of your competition’s customer base if you can address their problem points and better satisfy their needs.

5 – Planning for the Future

The four points listed above can all work in conjunction to improve your foresight and safeguard the future success of your company as much as possible. By keeping track of competitor actions and reactions to industry changes, you can plan strategically and try to stay one step ahead, like in a game of chess!

You should also review your competitor’s quarterly and yearly reports and look at their mission and goals. How are they performing overall compared to you? By comparing your company’s “report cards” with the competition’s, you can evaluate and adjust your business strategies to maintain the upper hand.

When it comes down to it, competitor analysis isn’t just a research activity, it also encourages introspection to identify the weak spots in your own company. So, no matter what growth stage you’re at, whether you’re a fresh new business finding your way or an established industry leader trying to stay on top, we have the skills and resources to help you.

As a full-service marketing agency, our expertise includes consulting, research and analytics, and brand and business strategy. We can produce tailored reports on competitor activities and industry insights or breathe new life into your consumer brands.  If you want customers to stay loyal to your cult brand and secure your dominance over the competition, give us a call!