Competitor analysis has exploded in recent years thanks to the arrival of AI-powered, automated software tools. It’s estimated that 90% of Fortune 500 Companies are using them to gain an advantage over competitors and smaller companies are following suit.
In this article, we’ll take a closer look at competitor analysis benefits. Whether you’re a marketer, sales professional, product manager or responsible for managing data and intelligence in your organisation, there’s a lot to be gained from embracing competitor intelligence.
According to McKinsey, 80% of companies use competitive intelligence to make strategic decisions across multiple departments, including marketing, sales, and product development.
But before examining the 8 key competitor analysis benefits, let’s start with a simple definition.
What Is Competitor Analysis?
Competitor analysis is the process of gathering and analysing data about competing businesses in the same industry or market. The primary goal is to understand the strengths, weaknesses, opportunities and threats of each competitor, in order to inform strategic decision-making and gain a competitive advantage.
Competitor analysis typically involves gathering data on a range of factors, including pricing, product changes, marketing activity, promotions, investments, personnel changes and more.
There’s tangible evidence for competitor analysis benefits. Businesses that use competitor analysis to inform their sales and marketing strategies, for example, can achieve up to a 10% increase in revenue and up to a 15% increase in market share.
How Is Competitor Analysis Gathered?
Competitor analysis can be performed through a variety of methods, such as online research, surveys, interviews, and industry reports. Increasingly, businesses are turning to competitor intelligence platforms to automate the process of gathering and analysing data.
Such platforms accelerate the gathering process, capturing insights in real-time and ensuring nothing important is missed. The data is then ready for organisations to mine and analyse. In the case of WatchMyCompetitor, the intelligence is analysed and curated on behalf of users, saving them time and energy and reducing the need to hire more in-house analysts or consultants.
What Are The Best Competitor Analysis Benefits?
The benefits listed below have been inspired by real-life examples from WatchMyCompetitor’s (WMC) clients across a wide range of industries.
1) Build a fuller, clearer picture of the market
Your competitors are actively seeking to steal market share and grow their business. Every action they undertake has the potential to impact your position in the market, sales and future success.
Likewise, if something happens to them such as an industry fine or PR blunder, it could create opportunities for you. If you’re not tracking and analysing the market, you could discover the news too late to protect your interests or make the most of a situation.
Competitor analysis keeps your finger on the pulse of the industry you’re operating in. It gives you a complete and up-to-date picture of what’s happening so that you’re in a better position to respond.
2) Become the authority on regulatory changes
If your industry is subject to regular regulatory change, waiting for official updates or commentary in trade publications may not offer enough time to plan the appropriate response.
But using competitor analysis, you can gain the insights to make the most of the situation. For example, by monitoring the right sources for mentions of planned changes or discussions preceding them, you can start to build up a clearer understanding of how they’ll impact your industry.
This could give you the opportunity to create content around the topic and establish your organisation as a leading voice that others follow. As a result, you can build trust amongst customers, attract the right candidates and raise awareness for your brand.
3) Win the talent market
Are you operating in a small or competitive talent pool? If you’re missing out on great people and your competitors are leading the race to top talent, it has the potential to impact your productivity and future prospects. It could also give them a sizable advantage in the market, meaning they get stronger while your organisation plateaus.
Monitoring your competitors can turn the tide. By tracking their approach to salaries, benefits, messaging, marketing channels and tactics, and other aspects of their proposition, you can begin to understand the reasons for their success and where you need to improve.
Not only that but you can spot potential areas of weakness that you can exploit to your advantage. The more informed you are, the more effective your own recruitment strategies will be.
77% of recruiters believe that understanding their company’s competitive position is essential for attracting top talent.
4) Perfect your product roadmaps
Launching a new product or feature brings an element of risk. If it doesn’t go well, the financial impact can be devastating for an organisation not to mention the impact on the people involved. If your product is going head-to-head with other products or has the potential to disrupt the market, understanding the competitive landscape is incredibly valuable.
Competitor analysis gives you the ability to track and understand rival product roadmaps. You can see when and how they launch their products and even when products are discontinued. You’ll gain insight into what’s working and what isn’t and where there are opportunities and threats. This level of business intelligence can inform your own product roadmaps so that you increase the potential for your launches and updates to be a success.
5) Minimise the impact of your competitors’ marketing activity
If a competitor changes its website, messaging, content or channel focus, or marketing tactics, it could improve their results and see them gain an advantage in the market. By tracking every change they make in real-time, you won’t be playing catch up trying to work out what they’ve done differently to grow market share.
You’ll have a clear picture of the approach they’ve taken and be able to analyse why it’s worked. You’ll be armed with the most up-to-date intelligence to adapt your strategies and improve your website so that you reduce the risks to your market position.
6) Respond faster to market threats and opportunities
Whether it’s the threat of a new entrant or product in the market, or an opportunity created by a competitor facing financial struggles, the window of time for you to act in order to protect and grow your revenue is small. The longer you leave it, the greater the risk of them impacting your revenue or of another organisation seizing the opportunity first.
Because competitor activity is tracked in real-time and analysed by market experts, your intelligence is ready for you to act upon immediately. You can move faster to minimise threats and capitalise on opportunities. Five-times faster, in fact.
7) Empower teams and individuals to get better results
Competitor analysis isn’t only valuable to data and insight teams. It has the potential to benefit multiple departments, teams and individuals across your organisation. Whether it’s marketing, sales, product or even senior management, intelligence can be used to help them make smarter strategic decisions to improve results.
A number of competitor intelligence tools offer the ability to set up alerts for specific types of insights and share them directly with relevant stakeholders, meaning they don’t need to access the dashboard directly. Some will integrate with the communication and data visualisation tools your organisation is already using to smooth the transition to becoming a data-driven company.
86% of businesses believe that integrated, automated technology is critical to their success.
8) Increase the value of your department to the organisation
Every department needs to prove its worth to an organisation. The more valuable it is, the more budget and resources it can expect. That could present the opportunity to grow your team, invest in training and development, offer promotions and even improve your own career prospects.
By leading the project that brings valuable intelligence into the organisation, you can increase your department’s value. You can give teams and management a clearer understanding of the market they’re part of and the competitors they’re up against. They’ll have data that helps them become better at their jobs and achieve better results. All of that will shine a favourable light on you and your team.
How WMC Can Solve Your Competitor Analysis Challenges
Whether you’re in a fast-changing industry with multiple competitors and new challenges or a more steady competitive landscape with a small number of big players, finding the right approach to competitor analysis can help you exploit its benefits.
Sifting through your competitors’ entire global digital footprints to find the most relevant intelligence is time-consuming and labour-intensive. If you don’t have a dedicated or large insights department, it may not be feasible, which limits the value you can gain from other intelligence solutions. WMC combines automated tracking with expert human analysis. Everything you see in your dashboard has been curated, so it’s ready for you to use.
It can be used to optimise your product, marketing and sales strategies as well as make smarter decisions faster as a business.
Don’t let your competitors gain an advantage. Book a demo today.
