As a small business owner, you probably have mixed feelings about conducting a formal competitor sales analysis. You already generally know who your competitors are, and you’re likely aware of how their value proposition compares to yours. Is it worth the time and energy necessary to conduct a formal competitor sales analysis — and then applying those findings to your business? Absolutely.
Why conduct a competitor analysis? It provides an immense amount of value to your business. It lets you learn from competitors and helps ensure you’re perceived as an innovation leader. Let’s say you’re working on rolling out a new customer portal, product tweak, or service line. If your competitor comes out with a similar product first, this intel gives you a chance to tweak your offering to differentiate it and keep your edge in the market.
Understanding a Competitor Sales Analysis
To start, make sure not to confuse a competitor sales analysis with a SWOT (strengths, weaknesses, opportunities, and threats) analysis. A SWOT analysis is just a tiny piece of a competitor sales analysis. In fact, it’s almost impossible for you to conduct a SWOT if you don’t have other companies against which to benchmark yourself.
Competitive research goes much deeper than a SWOT analysis. It helps you understand your competitors’ product offerings, features, pricing, customer ratings, markets they serve, clients, and social and digital presence.
Putting Results to Work for You
Here’s what to look for in a competitor analysis and how to turn the conclusions you draw from it into an actionable sales strategy:
1. Start small and work your way up
As Jack Welch, former chairman and CEO of General Electric, famously said, “If you don’t have a competitive advantage, don’t compete.” The only way to truly understand your sales advantage is to conduct the research — and then continually keep a finger on the pulse of market and competitor shifts. Start small with key insights about products, features, and pricing, using that data to drive your sales strategy.
For instance, maybe a competitor offers a different product feature set that you think would make sense for your customers. You can use this idea to tweak the way you present your products, creating your own unique positioning and messaging. Ensure that your data is updated, and commit to confirming this either quarterly or biannually. Products and services change rapidly, and it’s vital to stay on top of the most current trends.
2. Get a 360-degree view
To get an accurate view of competitors, you need to use multiple resources. Ask your marketing team whether they’re using social listening tools. Visit your competitors’ websites. Ask your sales team to share what they hear from prospects — maybe just add a few minutes to each team meeting to discuss — and interview prospects that didn’t buy to find out what others are offering that you aren’t. All of these competitor analysis components will give you valuable insights into how you can set yourself apart from the competition.
3. Revamp your value proposition
Your unique value proposition (UVP) is only as good as your competitor analysis. Your UVP should drive and inform your marketing and sales messaging because it outlines exactly what you offer in the market that sets you apart. Once you know how your products stack up against competitors’ offerings, you can more accurately define your UVP, keeping customers’ pain points in mind along the way.
Note that creating a unique value proposition is only the first step. Next, you have to educate your sales reps on that UVP. That way, they will all be consistent in sharing that information — and the “why” behind it.
While it might seem like an exercise in futility, a regular competitor sales analysis can be quite valuable. As you embark on this journey, be sure to start with the foundation: properly identifying and researching competitors. Then, build on that information and turn your conclusions into actionable results.