Measure twice, cut once. It applies in construction, and in marketing too!
By taking time to measure what’s going on in your industry—what competitors are doing, how they are marketing their product, how they are positioning themselves—you’ll have the data inputs you need to confidently carve a direction for your business that will successfully set you apart. In the marketing world, this means performing competitive audits.
As strategic documents that pull together what’s working (or not working) in your category, competitive audits give you an objective lens by which to build marketing plans that will make sense, differentiate you in the market, and help you reach your growth goals.
Why Perform A Competitive Audit
Let’s be clear. You don’t perform a competitive audit to be a copy cat. No one needs two of the exact same thing out in the market. Instead, you do it to get an an understanding of who is out there, what they’re doing, and how you can stand apart from the pack. By performing a thorough strategic audit, you’ll uncover:
- What Works Well: As you perform the audit, some things will likely shine through as being extremely compelling. It could be a competitor’s tone and messaging style, it could be their content, or it could be how they’re tackling certain marketing tactics. By studying what works well, you’ll have a frame of reference for activities that you should consider for your own business.
- What You Should Avoid: On the flip side, taking time to review how others are going to market with their products or services will also shed light on what they are not doing well. Maybe it’s lackluster messaging, or maybe it’s poor information sharing. Regardless of what those things are, the process of reviewing them will often clue you in to what actions are needed to avoid the same failures.
- What Isn’t Being Addressed: Even if a competitor is doing many thing well, they are likely missing out on something. It could be a customer target, a service line, a pricing model, a marketing channel, or something else entirely. By getting a lay of the land, you’ll be able to visualize these holes and home in on areas you can take advantage of to really differentiate yourself.
Key Components Of A Strategic Competitive Audit
Let’s say we’ve got you bought in to doing a competitive audit. The next course of action is to determine exactly what to audit. While there isn’t one definitive set of items, there are certain items that usually make the cut.
Website Sitemap: A website sitemap shows you how a competitor’s website is structured. In particular, it gives you a high-level view of what information they want to share, and how they want prospective customers to navigate the process of learning about their unique product or service. Some of the big takeaways that come with reviewing sitemaps is understanding how to avoid confusing flows of information. Said another way, by seeing what’s confusing about how competitors structure their websites, you can develop an underlying site architecture that offers relevant information to relevant customer targets in crisp, clear ways.
Messaging: Messaging applies to several key areas. This can include business positioning statements which are succinct definitions of a business’s core product, customer target, and why they will excel in the market. It also includes value propositions or brand tenants which are the broader ways a business says they will deliver value to the end customer.
Reviewing messaging is extremely illuminating. It can pinpoint if competitors are focusing on particular customer targets, and it can also show if certain messages are over-used or ineffective. Additionally, reviewing messaging helps identify if there are any extremely compelling value propositions, phrases, or styles that you’ll want to weave into your own marketing.
SEO Text: Search Engine Optimization (SEO) is the process of structuring your website in such a way that it will be easily be found by search engines like Google and Bing. One very basic component is something called title tags and meta descriptions, the key text used to tell search engines exactly what individual website pages are about.
Examining this text for different pages of competitors’ websites tells us two core things. First, good SEO text structure likely shows a commitment to “winning” organic search which means getting people to easily find a website when doing web searches. Additionally, the actual keywords used in this text can shed light on two valuable things: 1) potential language your business should use to also rank well in web searches, and 2) possible words you want to bid on so that your ads appear if/when you do search engine marketing.
Search Engine Marketing (SEM) This refers to the money spent on ad platforms like Google and Bing, and can include search-based ads (i.e. text ads that appear when someone makes a search) or display-based ads (i.e. visual ads that are shown based on someone’s known background or browsing history).
Exploring competitors’ SEM gives you insight into how aggressively they’re spending in the channel in general, the particular keywords they are bidding on, and how much they’re willing to spend on appearing when certain keywords are shown. In aggregate, it shows how competitive the channel is, if you have a chance to compete given what your budget might be, and if there are certain keywords that are especially valuable to “win.”
Social Media: This refers to any activity competitors have across any social media platform (e.g. Facebook, YouTube, LinkedIn, Instagram, TikTok, etc.). It includes looking at message cadence, message content, and the way the brand engages with followers and others on the platforms.
Evaluating competitors’ social media activity lets you isolate if certain types of content are extremely engaging (or not engaging) and who the target customer likely is. It also lets you identify if competitors are especially weak in certain channels, providing you with a possible place to grow your presence.
Marketing Content Content includes a wide range of materials including blog posts, case studies, white papers, eBooks, webinars and any other collateral that is intended to engage and/or educate prospective customers.
Reviewing content is a great way to see what materials resonate strongly, and why. It can also give you ideas about specific types of content or content topics that would be valuable to use in your own materials.
Pricing Model Pricing models don’t just mean the price of a product but also how that price is paid and what is received in return. For instance, it could be a single price for one fixed item (e.g. shoes, a series of education videos), it could be a monthly subscription for access to a robust entertainment platform (e.g. Netflix, HBO Go), or it could be an annual subscription for software with additional fees for incremental add-ons (e.g. Salesforce).
Exploring pricing models tells you not just how much customers are willing to spend on a product or service but also how competitors have anchored them around this price. Further, it tells you the market’s expectations for the breadth or depth of a product based on price. In total, it can help you identify whether you can price high or low, and how to distribute that cost out.
Customer Conversion Journey The customer conversion journey reflects the path a customer takes to evaluate and purchase a product. It’s a way to assess discrete items that may be in-place to increase the chance of a purchase. This can include free trials, public pricing information, live chat, public-facing sales phone number, and other question-answering or assessment tactics.
Like evaluating pricing models, evaluating customer conversion journeys help you understand the resources you’ll likely need in place to get customers to buy. Conversely, it might help you identify resources your competitors aren’t investing in, giving you a pathway to get a leg up.
Sales Process: If your product requires a sales process, you’ll want to see how others are structuring (or not structuring) the sales experience. For instance, is there a clear process used to qualify or disqualify customers, are there activities being done to nurture leads and keep them interested, are they using any particularly compelling or uncompelling sales materials? A good sales process runs on clean, clear structure and process. Evaluating how others are building their sales process will help you determine the right building blocks for your own process.
Onboarding Process: If you’re in a more complex category or sell something that requires multiple steps to fully use, customer onboarding is likely a piece of the puzzle. Assessing the way that onboarding is done (e.g. automated email, online learning platforms, account managers, etc.) as well as the channels being used (e.g. videos, knowledge bases, webinars) can bring to light compelling, effective tactics being used to train customers. Additionally, if there are less-than-impactful activities, you’ll know not to spend your time replicating them.
Keep in mind this is not an exhaustive list. Depending on your market target (e.g. B2B or B2C) or particular industry, you may need to add additional components to this list or exclude ones that are here. Be sure to map your audit to what’s relevant to your core category.
What Competitors To Choose For Your Audit
Once you’re ready to kick things off, you’ll need to narrow down a list of who to include in your audit. There are usually two ways to isolate who should make the cut:
- Direct Competitors: The most obvious group are those organizations that you go head-to-head against to win customers. These are the companies that people are comparing you to on a regular basis. Knowing their activities will give you a strong sense for how your core market is behaving and thinking.
- Tangential Category Players: The second group consists of organizations that offer products or services to your end customers, but that aren’t direct competitors. Examples of this would be looking at computer brands if you sell mouses or looking at high-end linens brands if you sell high-end home decor. While you aren’t competing with them head on, they are creating customer expectations via their marketing. As a result, auditing their marketing will help you further recognize where the market is anchored.
Usually we see audits feature about 4-7 organizations. You want enough data to compare and contrast across organizations, but not so many that you’re stuck in analysis paralysis.