Your business doesn’t exist in a vacuum. There will always be external forces pushing on your bottom line — both upwards and downwards. A strong economy drives a sustained boost in demand for your solution. Nice. A change in your closest competitor’s lead generation strategy drives an acute drop in opportunities for your sales team. Yikes.
It’s important to understand what you can and can’t control. And it’s equally important to differentiate between I can’t control this and I couldn’t have prepared for this. As a B2B marketer, you can’t control how your closest competitor goes about generating leads. But that doesn’t mean you can’t prepare for potential changes in their strategy.
Competitive analysis is the ongoing practice of assessing your competitors in relation to your own business. It’s the process of determining how you compare to each individual rival — in terms of both strengths and weaknesses — from the perspectives of product, marketing, sales, and more.
This is an introductory guide to competitive analysis for the B2B marketer. Once we’ve established the importance and the benefits of competitive analysis, we’ll discuss what you need to look for and share some tips for distributing your insights.
The Importance (and Benefits) of Competitive Analysis
To better understand the importance of competitive analysis, let’s think about Sarah. She’s an account executive at a B2B software company called Flex, selling technical content management systems to large manufacturing firms. It’s a crowded market — very rarely does she talk to a prospect without hearing the name of at least one competitor.
The strengths and weaknesses of Flex’s software depend almost entirely on which specific competitor it’s being compared to. Compared to Competitor A, the user interface is more navigable, but the collaborative tools are less intuitive. Compared to Competitor B, the collaborative tools are more intuitive, but the content archive is less detailed.
On any given call, Sarah needs to be able to (1) understand which competitors are part of the conversation and (2) position Flex’s software accordingly. If Sarah knows the prospect cares deeply about collaboration between users, and they mention Competitor B as an alternative solution on their radar, Sarah can confidently steer the conversation in her favor.
That’s not possible without competitive analysis. Competitive analysis enables sales professionals like Sarah to win more deals by adjusting their value propositions according to the unique needs of prospects and the relative weaknesses of competitors.
Winning more deals (and securing more revenue) is undoubtedly one of the primary benefits of competitive analysis — but it’s far from the only one. I’ve zoomed in on Sarah for the sake of being concrete, but let’s zoom back out to ensure we’re getting the full picture.
Competitive analysis is important because it enables folks across your organization to fully understand your position in the market — and, therefore, enables them to make decisions and implement strategies that are truly impactful. The benefits, as you can imagine, are far-reaching.
Three Major Benefits of Competitive Analysis
Far from exhaustive, here’s a quick list of three major benefits of competitive analysis.
- Win more deals & secure more revenue. Sales professionals are better at their jobs when they’re prepared to pivot depending on which competitors are part of the conversation with a prospective customer.
- Deliver better solutions to customers. Product managers are more equipped to provide value to customers when they understand what is and isn’t being delivered by alternative solutions.
- Optimize your online marketing strategy. Marketers who stay on top of the ways in which their competitors are generating leads are more likely to deliver a consistent stream of high-quality opportunities.
Now that you understand the importance of competitive analysis and how it translates into positive outcomes across your organization, let’s discuss the information you need to look for.
What to Include in Your Competitive Analysis
If you have an internet connection, your access to competitive information is practically limitless. Competitors’ websites and social media accounts, third-party review sites, discussion forums — the list of digital intelligence sources goes on and on.
This is good in the sense that you have the power to find everything you need for a successful competitive analysis, but not so good in the sense that there’s a lot of noise to sift through. The best way to cut out the irrelevant stuff and consistently find what you’re looking for is to employ a software-driven intelligence platform.
Regardless of whether you’re ready to take that step, you’ll need to set aside some time to think about what’s important to you and your stakeholders. Here are a few ideas as to what should be included in your competitive analysis.
Let’s start at a macro level. Who are your competitors? Which ones are direct competitors, and which ones are indirect competitors? Which ones are emerging, and which ones have been around for a while?
For context, a direct competitor is a company with which you compete head-to-head in the sales process. A prospective customer would never simultaneously use both your solution and the solution sold by your direct competitor — that would be redundant. Elsewhere, although an indirect competitor is in your industry (e.g., marketing technology), you don’t go head-to-head with them in the sales process.
Competitor mapping along a couple simple dimensions (direct vs. indirect, emerging vs. legacy) is an easy way to gauge the size of your market and the relative position of each organization. It’s also worthwhile to note how many employees each company has, how quickly each one is growing, and which area of the business each one seems to be focused on. (If, for example, your closest direct competitor is rapidly hiring engineers, that’s something to stay on top of.)
By definition, your direct competitors sell products that are very similar to yours. And while that may seem like a reason to gloss over the product portion of your competitive analysis, it’s imperative that you take the time to understand the ins and outs of each alternative solution in your market. Remember Sarah? Had she not known that one of her direct competitors was lacking in the collaboration department, she wouldn’t have been able to make such a targeted and persuasive pitch to her prospect.
Your competitors’ websites are a good place to start, and when you’re ready to dive into the details, I recommend third-party review sites like G2 and Capterra. In addition to providing insight into the individual features of each product in your market, these sites give you access to the minds of your competitors’ customers (and former customers). Habitually read reviews — glowing, scathing, and lukewarm — and you’ll start to get a strong sense of each competitor’s strengths and weaknesses.
Marketing & Sales Analysis
So, you know what your competitors are bringing to the table. As awesome as that is, arming your sales team with one-pagers and battlecards is pointless unless you’re feeding them a steady stream of qualified leads — something you’ll struggle to accomplish without an understanding of each competitor’s approach to marketing and sales. There’s a handful of basic questions you’ll want to answer.
How does each competitor build awareness? While some companies focus on blogging, others invest heavily in social media channels like Twitter and LinkedIn. YouTube has long been popular amongst B2B companies as a way to provide free educational content, and podcasting has been on the rise for several years. Understanding how you stack up against your competitors across these channels is a crucial part of the decision-making process. If both you and your biggest competitor are killing it with blogging and SEO, but neither of you has much of a YouTube presence, it might be time to hire a videographer.
How does each competitor generate leads? Whitepapers, ebooks, case studies, free tools, webinars — there’s no shortage of tactics for B2B marketing teams to employ. It’s safe to assume that each company in your market is using some combination of lead magnets to keep their sales teams occupied. Again, take note of what your competitors are doing well and identify opportunities to provide value in ways that they are not. If one of your direct competitors is crushing it with monthly webinars, but they’re slacking on the case study front, I’d recommend calling up some customers.
Finally: When your competitors get prospects on the phone, how do they position their products? How do they talk about your product? This kind of intel, as you can imagine, is a bit trickier to uncover. (Plus, when conducting competitive analysis, we always want to make sure our methods are ethical. Contrary to what my last name implies, I’m no advocate of espionage.) I think the best way to go about this is to chat with happy customers who came from particularly competitive deals. If they were taking calls with the competition, chances are they were told why your product is inferior. Even if you think you have an understanding of what your weaknesses are, it’s useful to stay on top of what’s being said outside your four walls. The more prepared your sales reps are to make adjustments in their conversations, the better.
Tips for Writing & Presenting Your Competitive Analysis
I don’t care how much amazing intel you gather in the process of conducting your competitive analysis — if you don’t take the time to organize, synthesize, and distribute that intel in a clear and digestible manner, you won’t see returns on your investment. With that in mind, let’s wrap up today’s guide with a few tips for writing and presenting your competitive analysis.
Speak Your Audience’s Language
Although everyone in your organization is (hopefully) working towards a handful of common goals — happier customers, more revenue, greater market share — different stakeholders care about different things. Whereas a product manager wants to create and execute a clear roadmap that maximizes value for end users, a sales rep wants to win more competitive deals. And whereas a demand gen specialist wants to increase lead volume, an executive leader wants to refine the company’s long-term positioning and strategy.
As you’re writing about the intel you’ve uncovered and the action items you’ve identified (more on this below), always keep in mind who you’re writing for and what they care about. Speak to your product manager in terms of UX; speak to your sales rep in terms of competitive win rate.
Prioritize Your Action Items
You’ve discovered that Competitor A is rapidly growing their sales team, Competitor B is delivering a certain product feature much better than you are, and Competitor C is light years behind you in terms of video marketing strategy.
Cool. Now what?
You can’t do everything at once. Certain competitive insights will naturally take precedence over others. It’s good to know that Competitor C has an abysmal YouTube presence, but that doesn’t necessarily require action right now — all it really tells you is that your marketing team can focus on other channels that demand more immediate attention. Competitor A rapidly growing their sales team, on the other hand … that’s a problem. A top priority, therefore, should be getting together with sales leadership and HR to make sure you’re keeping pace.
Make It Repeatable
All these extraordinarily valuable insights you’ve taken the time to uncover? Please don’t distribute them willy-nilly in a disorganized onslaught of one-off emails and Slack messages. Not only is that a terrific way to make sure your efforts are wasted, but remember — competitive analysis is an ongoing process. This is something you should be doing on a regular basis.
So, as you’re embarking on this endeavor for the first time, why not write and present your findings in a manner that can be easily replicated?
Templates are your friend. They make it easier for you to communicate the most salient points of your competitive analysis, and they improve the likelihood of key stakeholders retaining the information you’ve worked so hard to uncover. Below is a screenshot from a sample of Crayon’s free competitive analysis template — a simple, comprehensive tool that ensures everyone across your organization derives value from your efforts.
The more effectively you can compartmentalize the fruits of your analysis — delivered, again, in the language of your target audience — the greater returns you can expect to see.
Topics: Competitive Analysis