Find out what your competitors are doing better than you.
Why conduct a competitive audit?
- To gather ideas of what your competitors are doing that you think works, doesn’t work. Better yet, get prospects and customer feedback on what they think works and doesn’t by conducting research or hosting focus groups.
- To gather ideas to try in your marketing programs
- To understand what it feels like to be a prospective customer for the category of products/services you are selling (what is everyone in the industry saying)
- To understand what messages your customers are getting from competitors that may work to get them to switch.
The competition is broader than you think
There is direct competition and indirect competition. It’s important to understand and analyze both types of competition.
Direct competition should be easy for you to identify – it is the companies/products/services that you think of as your “competitors.”
Indirect competition is an alternative to someone buying the category of products/services you are selling. An example will help: If you are selling a new fizzy drink, you think of your competition as other companies that make/sell soda. That’s direct competition. Indirect competition might be: water, juice, coffee, tea, other kinds of beverages. The railroads missed seeing cars as competition.
If you’re a sit-down Italian restaurant, what is your indirect competition? Eating at home, fast food, catering services, prepared meals available at the grocery store, frozen lasagna. It could also be other ways people spend their discretionary “fun budget.” Instead of going out to eat, they might choose to go to the movies, go bowling, or out dancing.
The real sales barrier may be customers choosing to do nothing. When does a customer or prospect choose not to buy or upgrade? Can the audit help you understand these customers and how to change their mind?
How to conduct a competitive audit
Step #1: Define who is going to do the competitive audit
- Do it yourself
- Identify someone in at your business/non-profit to do this
- Involve everyone in the company to do this with you as the “aggregator” of all the information they collect
- Hire someone to do this (a college student studying marketing, someone who has graduated with a marketing degree and is looking for extra work, an independent freelancer are all good choices)
- Hire a marketing consultant to do this as a freelance project.
- Want to do mystery shopping? There are companies and freelancers who specialize in this.
TIP: If you want to focus on what your competitors are doing online, then you may want to hire an SEO/SEM agency with access to all the competitive tools and expertise in your industry/type of business.
Step #2: Define and scope the project
List the companies/products/services (both direct and indirect) you want to include in the competitive audit.
- List direct competitors you know of (and may have lost business to)
- Then expand that list by doing a Google search to see what other companies/products/services come up
- You want to notice any competitors that may be new, that are listed on page one of search results, or companies who are investing in a lot of advertising
- Local marketers should look at the Yellow Pages
- Business to business marketers should look at industry directories
- List indirect competitors and decide which ones you want to include
What customer “touch points” do you want the competitive audit to cover?
It’s best to look at how your brand (product, service, company or non-profit) and the direct and indirect competitors you’ve listed are marketing and treating customers from a 360-degree perspective. That means, you want to understand what customers experience at all stages of the purchase process (from not aware to purchase) and afterwards (delivery, early use, customer service, replenishment or repurchase).
TIP: Focus on auditing the total customer experience. Many companies focus a competitive audit just on one aspect of marketing, let’s say looking at ads. That’s helpful for the ad agency but not as actionable to you as the business owner because you miss “the big picture” of what the total customer experience is and insights into what is really working (or not) for your competitors to attract new customers, close more deals (faster), retain more customers, get more business from existing customers, and create customer advocates who spread positive word-of-mouth.
Customer touch points to consider auditing:
Ads in all media (TV, radio, newspaper, magazine, outdoor, yellow pages, online, search, coupon books). Is there a consistent brand look? Tone? Is there a consistent message? Offer? What do you think works? What doesn’t?
TIP: You might want to consider testing competitor’s ads to understand what your prospects and your customers think of your ads in comparison to your competitor’s ads. Large advertisers do this as a objective way to improve their advertising.
What else to evaluate for your competitive audit:
- Media mix (What types of advertising media are they using?)
- Timing – When do they run their ads? (Time of year, time of day)
- Retail point of purchase
- Sales support materials – brochures, sales sheets, sales presentations, etc.
- Direct mail (ask people you know to save their direct mail from competitors)
- Email marketing – Sign up for your competitors’ mailing lists to see what they send people and what offers or specials they run.
- PR – How much coverage are they getting compared to you? What does the press say about your competitors? How much is positive? Neutral? Negative? Are reporters writing about or covering your industry? Your brand? Your competitors? Which of those writers is most positive? (That might be the reporter to whom you pitch a story to about your brand.)
- Phone – Who answers? How fast? How professional are they? Are automated phone systems used? What’s that experience like? How easy is it to find the person you want to talk to as a prospective customer? How responsive are they in getting back to you?
- Physical location
- Social media – what are people saying on Facebook? Twitter? YouTube? LinkedIn? MySpace? Yelp?
- Ordering, purchasing, check-out
- Customer service, customer returns
- Repurchase – what’s that like?