Running A Competitive Audit To Kick Start Customer Acquisition
We get it. You want to jump into the deep end with lead generation and new customer acquisition. But how do you pick the right approach? We suggest always kicking things off with a competitive audit.
Competitive audits methodically examine marketing, sales, and product dynamics across competitors in any given market. With objective comparisons in place, you have the right pieces to begin differentiating yourself against your competition.
What Is A Competitive Audit
A competitive audit is a structured framework for tracking how different businesses in a given category attract new customers. Covering everything from marketing channels, website experience, trial process, pricing and much more, competitive audits provide necessary insights for how to differentiate a business in a crowded market.
Competitive audits identify who is out there, what they’re doing, and how you can stand apart from the pack. By performing a thorough competitive 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, their content, or how they execute certain tactics. By studying what works well, you get a frame of reference for activities that you should consider yourself.
- What You Should Avoid: On the flip side, audits also shed light on what competitors do not do well. Maybe it’s lackluster messaging or poor information sharing. Regardless of what the issues are, the audit process clues you in on how to mitigate the same issues.
- What Isn’t Being Addressed: Few competitors do everything flawlessly. A competitive lay of the land lets you visualize these holes and home in on areas where you can shine.
Picking Competitors For Your Audit
To kick off any audit, first start by picking the competitors. You likely have a ton of competitors in your market, making it difficult to select just a few. We suggest using a few different criteria to narrow things down.
1. Product/Service Alignment
This means choosing competitors with very similar products and services. This generally applies to saturated or mature markets with a lot of competitors.
2. Category Alignment
This option means selecting organizations that offer related or complementary services. Notably, they are not necessarily direct competitors. This is a great choice when your organization is part of a broader, well-known category since customers will already have these organizations in mind.
3. Market Position
This option means selecting competitors based on the market share they own or could potentially own. This is a solid choice for smaller organizations going up against entrenched players, or established players keeping tabs on category upstarts.
For businesses with regionally-oriented services, this option allows for hone in on competitors vying for the same customers. When geography is a factor, it’s usually used in conjunction with one of the criteria above.
There is no set number of competitors you should audit. However, from a strictly practical standpoint, keep the number in check. After all, each incremental competitor adds incremental time to the process. Additionally, when it comes time to review the findings, too many competitors makes it difficult to keep differences top-of-mind. We generally run audits that include 4-5 competitors.
Core Competitive Audit Components
Ready to run your audit? First, determine exactly what dimensions to include in your audit. While there isn’t one definitive set of items, there are certain items that usually make the cut.
A website sitemap shows you a competitor’s website structure. In particular, it provides a high-level view of what information they want to share and what they think is important to know about them.
A big takeaway often includes how to avoid confusing information flows. Seeing what’s confusing about competitor website structures lets you develop a streamlined architecture for easier, crisper information sharing.
Messaging applies to several key areas. This includes 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, the broader ways a business claims they help customers.
Reviewing messaging is extremely illuminating. It pinpoints if competitors focus on particular customer targets and if certain messages are over-used or ineffective. Additionally, reviewing messaging identifies extremely compelling value propositions, phrases, or styles that you’ll want to emulate.
Search Engine Optimization (SEO) is the process of structuring your website for Google and Bing discoverability. One very basic component is something called title tags and meta descriptions. These are backend text inputs used on websites to tell search engines what you are all about.
Examining this text across competitors tells us two things. First, good SEO text structure shows a commitment to “winning” organic search. If competitors use strong SEO text, it means they actively work at strong search engine rankings.
Secondly, the keywords themselves shed light on two core areas. One is the potential language your business should use to also rank well in web searches. The other is identifying strong keywords to use in search engine marketing.
Search Engine Marketing (SEM)
Search Engine Marketing refers to spending money on platforms like Google and Bing. When people search with relevant words, your ads appear.
Exploring competitors’ SEM offers insight into aggressive spend patterns, relevant keywords, and how much they spend for their ads to appear for certain keywords. In aggregate, auditing SEM shows how competitive the channel is, budgets needed to be competitive, and keywords that are especially valuable to “win.”
Social media refers to activity across social media platform (e.g. Facebook, YouTube, LinkedIn, Instagram, TikTok, etc.). Audits include message cadence, message content, and the way the brand engages with followers and others on the platforms.
Evaluating competitors’ social media activity isolates if certain types of content are extremely engaging and who the target customer likely is. It also lets you identify social channels where competitors choose not to engage.
Content marketing includes a wide range of materials including blog posts, case studies, white papers, eBooks, and webinars.
Reviewing content marketing lets you see what materials resonate strongly and why. It also gives you ideas about specific types of content or content topics to use in your own materials.
Price Points & Pricing Model
This refers to both the product price and how competitors determine how to charge. For instance, it could be a single price for one fixed item (e.g. shoes, a series of education videos). Or it could be a monthly subscription for access to a robust entertainment platform (e.g. Netflix, HBO Go). Another approach could be an annual subscription for software with additional fees for incremental add-ons (e.g. Salesforce).
Exploring pricing models tells you how much customers are willing to spend and existing price anchors. Further, it tells you the market’s expectations for the breadth or depth of a product based on price. In total, it helps you identify whether you can price high or low, and how to distribute that cost.
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 includes free trials, public pricing information, live chat, a public-facing sales phone number, and other question-answering or assessment tactics.
Evaluating customer conversion journeys tells you the resources you’ll likely need to get customers to buy. Also, it might help you identify resources your competitors aren’t investing in, giving you a leg up.
If your product requires a sales process, you’ll want to see how others structure the sales experience. For instance, is there a clear process used to qualify or disqualify customers? Do they use activities to nurture leads and keep them interested? Do they use any particularly compelling sales materials? A good sales process runs on clean, clear structure and process. Evaluating how others are building their sales process tells what you’ll need to build out yours.
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 how competitors do onboarding (e.g. automated emails, online learning platforms, account managers, etc.) as well as what resources they use (e.g. videos, knowledge bases, webinars) sheds light on compelling tactics you’ll want to incorporate. Additionally, if there are less-than-impactful activities, you’ll know what to avoid.
Keep in mind this is not an exhaustive list. Depending on your market target (e.g. B2B or B2C) or particular industry, you may want to include additional items. Or, perhaps exclude items on this list. Be sure to map your audit to what’s relevant to your core category.
What To Do When Your Competitive Audit Is Complete
The competitive audit is all about intelligence gathering so that you can perform as well as, or better than, your competitors. Use the results from your audit to identify how category insiders talk about themselves and their products. Along the same lines, use audits to understand how prospective customers think about the category and make sure you’re talking about yourself in a similar way.
Competitive audits will help in several tactical ways too, including let you…
Learn What’s Working For Others
Businesses typically put large investments in tactics that perform well for them. If you see major investments in some channels, especially search engine marketing, it’s likely a good signal that the channel drives strong leads. Additionally, bigger players likely performed research to land on their sitemaps as well as their SEO and content strategy. Take the opportunity to piggy back on someone else’s work. This is especially valuable if you’re a smaller player trying to make inroads.
Inform Your Channel Strategy
In a world where nearly all customers are doing comparison shopping, you know you need to look as good as, if not better than, competitors. However, unless you’re flush with cash, you’ll still need to pick and choose which marketing activities you want to excel at. Completing a competitive audit isolates which channels are competitive weaknesses. This lets you prioritize acquisition channels and customer journey experiences to set you apart.
Identify Where You Need to Step It Up
While competitive audits are about isolating opportunity, they are also about creating wake up calls. It’s likely that you or other team members have strong hunches about where your competitors are stronger. However, performing the audit gives you concrete evidence to validate those hunches and set the foundations you need to start doing something about it.