Competitor analysis – Know your enemy

Marketing is an inherently competitive activity – we are here to take market share from direct or indirect competitors. Yet competitor analysis is frequently overlooked by B2B marketers.

Richard Bush, MD at B2B marketing agency Base One, says, “It’s amazing how often prospective clients tell us they don’t know much about their competitors. At best, they’ll give us a list of websites; at worst they’ll say they don’t even know who their competitors are.”

Indeed, it is remarkable how much time and effort some marketers put into understanding their customers – profiling them, anticipating their needs, desires, and motivations – but will do nothing to analyse the competition.

Leo Aspden represents the Chartered Institute of Marketing (CIM) as ambassador for SMEs in the

Manchester area. He runs a workshop called ‘How to get to grips with your competitors’ as part of a series of workshops available through the CIM. He outlines ten questions every B2B marketer should be able to answer:

1. Who are your competitors?

2. What do they offer?

3. What is their pricing policy?

4. Who are their customers?

5. How do they promote themselves?

6. Who are their suppliers?

7. How financially secure are they?

8. How do they organise their operation and how does this differ from yours?

9. What are their strengths and weaknesses?

10. What is their business strategy?

If you are unable to tick one or more of those then perhaps it is time to pay more attention to your competitors. Follow these five steps to make a start:

Begin with an open mind. Claire Roy, head of marketing at Kingpin Intelligence, says, “Don’t assume you know what the outcome will be before you start. Marketers often think they know where they sit in the market, and begin a competitor analysis exercise almost as a way of proving that they’re right. Before you set out, you should be clear about what you want to do with the results, but be open about what you might find.”

This includes taking a broad approach to defining your competition. Chris Dickens, head of strategy at Geronimo – a creative agency that works for Direct Line for Business and Seat Fleet – says, “All too often clients only look at the sectors they operate in. This runs the risk of ‘copycatting’. It’s far better to look further afield in related sectors or other countries. Consider not only existing competitors, but also new entrants to your market, and those who indirectly compete with you.”

Once you have drawn up a list of your competitors, begin by writing down what you already know or can easily find out. You can gain basic facts such as location, turnover, age, products, services and pricing from their websites and Companies House. Then start accessing information within your organisation. You may employ former staff of your competitors. These should be an excellent source of information, so make sure you talk to them.

She says, “It’s vital to connect with internal sources such as sales people, customer-facing staff, call-centre employees and the senior executives. It’s about motivating them to be your eyes and ears. No piece of information is too small or insignificant. It all builds to tell a story of the industry or market you’re in.”

Without doubt, B2B marketers face difficulties when it comes to competitor analysis. As Richard Mabbott, group head of planning at Gyro International says, “Much B2B marketing is through direct channels and this can make it challenging to get sight of everything the competition is doing. For example, it can be hard to know if a competitor has sent a direct mail pack to the top 50 UK IT directors.”

However, he adds that while it is difficult, it is not impossible. “It takes a bit of creative thinking,” he says. Furthermore, there is a wealth of accessible marketing communications you can use to build a picture of the competition.

Essentially, you need to perform a marketing audit on each of your competitors. This will cover the key messages a competitor is transmitting, and also give you ideas about the brand image it is trying to create through its visual and verbal presentation.

Don’t forget online marketing. Bruce Townsend, marketing manager at ecommerce and EPOS supplier, Actinic, says, “Online activity is one of the easiest things to find out about, and it will tell you a lot about their overall business plan. Services like Alexa, Compete and Adgooroo can tell you how much traffic a competitor’s website is getting, where visitors are coming from and what search phrases they are advertising against.”

Finally, consider auditing your competitors’ media coverage and try plugging industry experts for news and views. Chris Cleaver, MD for business brands at Dragon, offers this advice: “Talking to trade press and other industry experts can be revealing. They often have a helicopter view of an industry and of how things are developing that will help you understand the overall landscape and help locate yourself within it.”

Competitor analysis doesn’t have to be expensive. You should be able to accomplish the preceding three steps in-house without enormous investment of time. However, you may need to go further to get more insight and this is where you may want to bring in external research agencies. Cleaver suggests conducting a regular image study.

“It doesn’t need to be a huge quantitative piece,” he says. “I’ve seen valuable information come from a series of in-depth interviews of customers and suppliers. If carefully constructed, it can help you to understand your competitors better and how you can build your offer to better meet your customers’ needs and outpace your competitors.”

He says that in his experience people will speak more freely to someone they consider to be objective. Although morally dubious, if you want to take it further you could hire a third party to go undercover to provide you with insights into exactly how competitors market to their prospects and customers.

Whatever you do find out, you need to ensure you use it. Never collect intelligence purely for the sake of it, and no matter how difficult the changes you have to make as a result of your research, be prepared to adjust your marketing accordingly. However, be careful of allowing your strategy to be dictated by your competitors. It should be an important factor, but it is not the only one – profitability, sustainability, innovation, relationships, and job satisfaction are all equally important.

Finally, competitor analysis should not be a one-off exercise. As Trevor Merriden, director at Communications Management, a communications consultancy, says, “Competitor analysis at its best is not just a report, but a state of mind. You obviously put more time into it in the three months or so before an overhaul of your annual marketing strategy, but if as a B2B marketer you stop thinking about the competition when the report is finished then you probably need to rethink your career options.”

 

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