A solid competitive marketing strategy is the key to maximizing your business growth. Essentially, doing a competitive analysis involves understanding three main elements:
Your target customer is the individual or individuals who will purchase your product. Hopefully you already have some idea of who your ideal target customer is (not specific names, but the type of buyer they are: eg, retail sales managers, or stay-at-home moms, or whatever). You need to get inside your target customer’s head, and paint as detailed a picture of them as possible. There is often value in narrowing your market niche by tightening up your target customer profile (eg, stay-at-home moms who work out of the home, versus all stay-at-home moms), especially if you are a small company or just starting out. For more information on customer segmentation and developing a detailed profile of your target customer, take a look at the following video:
Next, you need to identify your target customer’s pain points.
What big problem do they have that your product or service helps solve?
It will be much easier to market and sell your product if it is solving a key problem facing your target customers. Especially when budgets are tight, other things are considered “nice to have” and it can be much harder to drive those purchase decisions.
Think about the detailed target customer profile you just painted, and identify the top 3-5 issues that keep them awake at night. How can your product solve one or more of those pain points? If your product is not a solution to one of your customer’s top problems, you may need to re-evaluate either your product or your target market.
Now you need to identify and study your competitors.
Once you have completed steps one and two, it becomes fairly straightforward to identify your main competitors: just ask yourself what other solutions your target customer has to their problem. Also take a look at this article for some good marketing research resources for gathering data on your competitors. Often your main competitors will be other companies with products that are very similar to yours. But be on the lookout for different ways that the customer could solve their pain point – those are competitors also. Now consider the ways in which your product or service is better than the competitive options at solving the pain point of your target customer. Make a list and refine it – it should be short and easy to communicate. This is your Unique Selling Proposition (USP). For more information on identifying your USP or competitive advantage, take a look at the following video:
Congratulations! You have now completed your competitive marketing strategy and hopefully this exercise has helped you hone your product or service focus and positioning, better understand your target customer, and create a compelling USP.
You are now ready to move on to Step 3: Complete Your SWOT Analysis - where SWOT stands for Strengths / Weaknesses / Opportunities / Threats.
Start your SWOT analysis here.