One of the fundamentals I teach our fashion marketing is students is competitor analysis, because to be a successful business you’ve got to know who you’re up against. Creative business owners don’t always take the time to work out who their competitors are, especially if they’ve started organically or are still developing their business alongside a day job.
Knowing and analysing your competitors gives you a really good understanding of where you are in the business eco-system. Are you high or low priced? Are you in a certain clique, or aesthetic, or making style? Are you totally, radically different, or subtly unique? And knowing the answers to these questions will help make your creative business stand out from the crowd.
By doing a competitor analysis, you’ll be able to:
- See who you’re competing with for customers
- Understand what other businesses are doing well (or not so well)
- Come up with ways for your business to stand out
But I don’t have any competitors!
You might think that if you run a very niche, very specialist, or very small business there’s no point doing a competitor analysis – after all, how many competitors can you really have?
The answer is more than you think.
Although no one might be selling exactly the same hand-carved wooden yoga sandals as you, there will still be creative people carving wooden ornaments, making beautiful sandals and tapping into the ever-so-bendy yoga market.
Even for independent creative businesses whose service work depends on other businesses – like self-employed marketing consultants and copywriters, ahem – competitor analysis is important. I know there’s quite a few copywriters and marketing consultants in my area.
I know their specialisms, USPs, prices and client base. I know where I sit in the market and what my USP is.
I found all that out through a competitor analysis – not because I had some spare time, but because I wanted to make sure I was running by business in a credible, sustainable way, at the right price, and with a USP that had a true U. Doing it has helped me focus my marketing and my services, and kept my business on the right track.
How to analyse your competitors
A competitor analysis really is very useful, and lots of creative business owners don’t do them. But if you do one, you’ll be able to make your business better by working out exactly how to stand out.
This guide is going to give you step-by-step instructions on how to do a competitor analysis that you can tailor to your unique creative business. This is something you can revisit in the future when new folk arrive on the scene, or when your business evolves.
You don’t need anything fancy for it, although doing it on the computer makes it easier to keep track of all your information.
- Working out who your competitors are
- Desk research about your competitors
- First-hand research
- Understanding strengths and weaknesses
- Highlighting danger areas
- Lessons you can learn from your competitors
- What makes you different (and how to use this to help you)
Work out who your competitors are
As I mentioned, it can be easy if you have a creative business that’s particularly niche, or you work independently, to think you don’t really have any competitors. But it’s very likely that you do.
Working out who your competitors are gives you a starting point for your competitor analysis. Your competitors might be ‘direct’ competition – they have the same business as you – or ‘indirect’ – they have a business which overlaps yours but isn’t quite the same.
For example, other freelance copywriters are my direct competition, while freelance community managers are my indirect competition; we don’t do the same thing but it does overlap.
You can start by thinking up a list of all the types of creative business that might be direct or indirect competitors. If you’re a fashion photographer, that might include non-fashion photographers, bloggers, creative directors, stylists – anyone who does something a bit like you.
You can make that list more comprehensive by considering these factors:
- Geography: who in your local area could be a competitor? What about national competitors? Or international?
- Product: who sells similar products or services to you? Who sells specialist products like yours? What about people who sell general products, but include ones like yours?
- Aesthetic: whose business looks and feels like yours? Who has a similar aesthetic? Whose business could yours be confused with?
For example, a fashion photographer might find there’s no people doing fashion photography in her local area, but there are several photography studios which could be indirect competitors.
Do some desk research
Desk research means looking at the information that’s already out there and putting together your findings (normally sitting at a desk, of course). In your competitor analysis, it means researching your list of potential competitors online or in print and recording what you find out.
It’s time to be a detective.
I’ve found the easiest way to do this is with a spreadsheet which lists your competitors and different elements of their business. But if you want to work visually, or on paper, then choose the right tools that work for you.
There will be a ton of information that you can record about your competitors, but here’s the essential list to find out and record:
- Basic details: name, business name, contact, website, social media links, email, where they operate
- Business type: a short description of what their business is
- Products and services: short descriptions of the type of products and services they sell (if you’re working on a spreadsheet it can be handy to give each type a different line)
- Prices: individual prices for their product types or services
- Aesthetic: description (plus pictures if you can) of their visual style and branding
- Marketing: a description of what you can see they’re doing to market their business (like writing blog posts, sending newsletters, etc.)
- USP: what you perceive their USP to be, or ideally what they say their USP is (if you can find out)
Don’t expect this to be a quick process. People have a habit of hiding the most important information in places you can’t find it, or being very vague about what their business actually does. But recording the information like this allows you to see, at a glance, what your competitors are doing – and later in your competitor analysis, it’ll help you work out how you fit in to this creative business eco-system.
Do some first-hand research
It’s always useful to support your secondary research with first-hand research – the stuff where you actually go out and find out new information. This isn’t always possible but it’s really, really useful if you can do it because you get first-hand experience of the business.
You can try visiting your competitors, checking out prices, seeing what their customer service is like, and generally being a ‘secret shopper’. It sounds sneaky but it’s exactly what big brands do when checking out their competitors (or what they do when testing the quality of their own staff).
Strengths and weaknesses
Once you’ve got all this information together, it’s time for some analysis of everything you’ve seen. Starting with strengths and weaknesses of your competitors is useful because it’ll help you quickly identify any common themes and any areas you need to think about for your creative business.
Here are some questions to help you analyse your competitors’ strengths and weaknesses.
- Is your competitor well-established? Are they well-known in their field?
- Do they appear to be popular on social media? Have you seen them in print or featured on websites?
- Are they busy? Were there lots of customers or phone calls when you were in the shop? Is their calendar booked up?
- Is their website easy to understand and use? Do they appear in search results for words related to their business?
- Do they have a strong list of clients or retailers?
- Do you think they look, feel and act professionally?
- Is it clear what they and their business offer? Can you understand their USP?
- Are they actively marketing themselves? Do you think it’s working effectively?
- Was their customer service acceptable? Are customers satisfied with their products or services?
- Was it difficult to get hold of them? Do you feel they look, feel and act professionally?
You might not feel like you can answer all these questions – how are you meant to know if they’re busy all the time, or their marketing is working? – but actually, you can. Because you are an expert in your field and therefore you can make a professional, educated judgement about what these competitors are doing.
The more of them you look at the more knowledgeable you become about what’s right for your industry and your business.
The whole point of a competitor analysis is to understand where you sit in the business eco-system (not just to make a handy list of who you should be keeping an eye on). So using what you’ve collected so far, and especially your competitors’ strengths and weaknesses, you can highlight some danger areas.
Danger areas are elements of your competitors which could be dangerous to your business. For example:
- A competitor offering cheaper services could undercut you
- A competitor whose brand is similar to your own could confuse customers
- A competitor stocking the same products could make you seem less unique
Not every competitor will present your business with a danger. But documenting as many of these danger areas as possible will help you in making sure your business stands up to the competition.
Lessons you can learn from your competitors
If you’re thinking, “I have so many competitors! There are so many danger areas! Eep!”, fear not. This is the part where you learn from your competitors to make your creative business even better.
Every competitor, no matter how small or indirect, will have something they can teach you.
Work through each competitor one by one, look at their strengths, weaknesses and danger areas, and see how they can help you improve your business.
Strengths is a great one to start with. Is there a competitor who is really doing well with local press? What’s her method? How does she get involved? What about one whose online presence is excellent? Learn from that.
Weaknesses next. Which of your competitors makes it hard to find out what their services are? Is there one who seems to be over (or under) priced? Think about why this could be and learn from it.
Danger areas can help you learn lessons from the future. If there’s a competitor stocking similar products to you, what could you learn to help you choose unique suppliers in the future? Or if their brand is so similar to yours it could be confusing, what could you do now to make sure yours is the one customers remember?
Keep these in mind when you’re moving your business onto the next step, as it’ll help you make the right choices so you fit effectively into this creative business eco-system.
What makes you different
Now you know your competitors inside-out, understand their strengths and weaknesses, and have learnt from what they’ve done, it’s time to re-affirm exactly what makes you different.
Having something which makes you different from your competitors is the way a creative business eco-system thrives. It’s means you’re developing a creative business which fits into a niche.
It’s the same reason why 8.7 million species survive on the planet, or why 18,000 beetle species were found in 2.5 acres of rainforest in Panama. They all find a niche.
That doesn’t mean all those beetles aren’t competing; it means they’re not all competing for exactly the same thing. You and your creative competitors will be competing for customers, but not for exactly the same customer. Explaining what makes you different means you can seek out that customer more readily.
It also means you have a snappy comeback to suppliers, clients or other customers who say “But so-and-so is cheaper/better/greener/whatever-er”.
“Yes they are”, you can say, “but here’s exactly why you should go with me instead.”
For example, I know there are freelance marketing consultants and copywriters out there who are much cheaper than me (and some who are way more expensive). But my cost is based on my experience and skills – which are really quite good.
So I can say:
“Yes, so-and-so is cheaper than me…but they haven’t worked with international brands or given one-to-one workshops or [you get the picture]”.
Compare yourself, honestly, to the competitors on your list. Ask yourself what makes you different. Are you:
- More experienced?
- Better priced?
- Friendlier or more professional?
- Easier to work with?
Write it all down and be ready to use it as your snappy comeback, and as a reminder about exactly why you’re worth buying from.
You’ve done it.
Congratulations – you’ve completed a competitor analysis for your creative business. If you’ve followed each step closely, you’ll have a great database of who your competitors are, what they’re doing well (and not), and the ways in which you can make sure you stay one step ahead.
Everything here can help you decide what to do next with your business, from developing new services to making sure your branding is the one customers remember.