Today, we’re going to show you exactly how to perform a competitive analysis.
If you’re interested in gathering insights on your rivals to give your business a competitive edge, then you’ll love this actionable guide.
To make sure everyone's on the same page, we’ll start with absolute basics before getting into the step-by-step process.
What Is a Competitive Analysis?
A competitive analysis is the process of researching your business’s key competitors to collect information about their products or services, sales methods, and marketing strategies to help you find opportunities to improve your own business.
By doing a competitive analysis, you can get an idea of what helps your rivals succeed. And maybe uncover some mistakes they could be making.
Why Should You Do a Competitive Analysis?
Doing a competitive analysis helps you make smarter business decisions.
Whether you're just starting out or looking to grow an established business, understanding your competitive landscape is crucial for success.
Specifically, doing a competitive analysis helps you:
- Learn from others’ successes and failures. Your competitors have already invested time and money in testing various strategies. By studying what does and doesn’t work for them, you can accelerate your own path to success.
- Discover untapped opportunities. Identify gaps in the market where competitors are overlooking specific customer segments or missing key features their customers are seeking. These gaps represent valuable opportunities for your business.
- Find out the best way to position yourself. Understand how your competitors position their products and services, so you can refine your own positioning to better appeal to your target audience.
How to Do a Competitive Analysis
Below, we’ll show exactly how to perform a competitive analysis.
Make sure to download our competitive analysis template to follow along. And modify the fields in the left-hand column as needed to suit your business.
1. Identify Your Direct Competitors
Direct competitors are businesses with similar products or services to yours that are targeting the same audience.
Find them through these methods:
- Run a search for the products or services you offer. The top results you see will likely include some of your direct competitors. Pay attention to both organic results (the standard blue links) and paid ads.
- Ask your sales team what other solutions prospects are considering. You'll often discover competitors you didn't know about by asking these questions.
- Browse industry-specific review sites or directories. Look at what other businesses are shown in your category.
- Use Market Explorer. Just click the “Find competitors” tab and enter your domain to see a list of your main competitors based on traffic patterns and audience similarities.
As an example, let's say you're launching an email marketing platform.
By following the research methods above, you would find at least a few competitors to use in your analysis.
Add them to your copy of the analysis template and move on to the next step.
2. Analyze Products or Services
Analyze your competitors’ products or services and how they speak about them to understand their value propositions and other relevant details.
Start by reviewing your competitors’ homepages.
Look at how they position themselves: what problems they solve, who they help, and how they differentiate their solutions. To get a high-level view of their core value proposition.
Next, study their product or service pages carefully to understand:
- Core features and capabilities: Identify the main functionalities and unique features that your competitors offer. Understand how these features address customer needs and any innovations that set their products or services apart.
- Limitations: Determine any weaknesses or gaps in your competitors’ offerings. This could include missing after-sales service or customer support.
- Pricing structure: If you’re in a software space, analyze your rivals’ subscription tiers. If you sell physical products or offer services, see their pricing across different product lines or service packages. This will help you identify whether competitors are in a premium, mid-range, or budget segment.
Once you've thoroughly evaluated your competitors’ offerings, record your findings in your copy of the competitor analysis template.
Like this:
3. Uncover Marketing Channels and Content Formats
Finding what content formats your competitors use and the marketing channels that drive the most traffic to their websites can provide valuable insights for your own strategy.
Look at their entire content footprint:
- Do they have a blog?
- Are they running a newsletter?
- Do they have a YouTube channel?
- Do they post content on social media platforms like Facebook, Instagram, and LinkedIn?
- Do they run webinars or online courses?
For the content formats they use, analyze their specific approaches.
For example, if they have a blog, analyze whether they publish educational articles, case studies, or company updates. This will help you understand what’s likely been most successful.
Next, use Semrush’s Traffic Analytics tool to understand how effectively different channels drive traffic to their websites.
Open the tool, enter a competitor’s website, and click “Analyze.”
Then, go to the “Traffic Journey” tab. You’ll see which marketing channels are bringing the most traffic to your competitor’s website.
Study these traffic sources to gain insights.
For example, if you see a large portion of their traffic coming from organic search, it suggests they’re investing heavily in SEO-focused content.
And if a competitor receives a substantial amount of direct traffic, it likely means they've generated brand awareness through ads and/or have strong word-of-mouth marketing.
A high portion of referral traffic may indicate the rival has partnerships with industry influencers or has been featured on popular websites in your niche.
Run the analysis for each competitor on your list and note the findings in the competitive analysis document.
4. Research Sales Processes
Analyze your competitors' sales processes to understand how they connect with prospective customers and possibly identify opportunities to improve your own sales processes.
A sales process typically involves at least these stages:
- Presenting the offering: Understand how competitors communicate value and demonstrate their solutions to their prospects. Businesses that sell small-ticket items might not have dedicated sales teams that are highly involved with prospects, but larger purchases often require that.
- Following up: Study how competitors stay in touch with prospects who haven't bought yet. They might use automated email reminders, phone check-ins, or offer a free trial.
- Closing: Look at how competitors convert interested prospects into customers. They might offer discounts, money-back guarantees, or product bundles to encourage purchases.
The way these stages play out varies drastically by niche.
If you sell software, there’s a good chance your competitors offer a free trial. You can sign up for that to understand their follow-up methods, communication styles, and overall approaches to closing deals.
Here are some things to look out for if you’re studying a software competitor’s sales processes by signing up for a trial:
- Preliminary setup: Do they involve a sales team to walk you through the product?
- Initial follow-up: What tactics do they use to stay in touch with you right after you sign up?
- Closing: What persuasion tactics do they use to encourage a purchase?
Track everything in the competitive analysis template:
5. Study Feedback
Look into what people say about your competitors and how those competitors have been rated to uncover valuable insights for your own business.
Here's how to gather this information:
- Check review sites. See what customers praise rivals for and what they complain about. Pay special attention to recurring themes in customer feedback. If multiple customers mention the same issue, it's likely a significant weakness you could capitalize on.
- Monitor social media mentions. Look at what customers and prospects say on platforms like X (formerly Twitter), Reddit, and LinkedIn. This feedback can reveal where a competitor shines—or falls short. You can track social mentions using tools like Mention and Brand Monitoring.
- Analyze news coverage. Check reputable news outlets for any mentions of your competitors, and evaluate both the positive and negative comments. Use the Brand Monitoring tool for this.
Document your findings in the competitive analysis template:
6. Compare Strengths and Weaknesses
After gathering detailed information about your competitors, identify their key strengths and weaknesses and how they compare against yours.
Look for patterns across your research.
What do your competitors do really well? This could be specific features that solve issues your target audience faces, great marketing that gets results, or exceptional customer support.
At the same time, look for places where your competitors struggle. Maybe competitors have software with confusing or outdated interfaces. Or they’re missing some new features that customers are requesting.
There might even be customer groups they have ignored or other problems those competitors haven't solved yet.
Document your findings in the competitive analysis document:
7. Find Where You Fit into the Market
Look over your competitive analysis data to identify your unique position and opportunities in the market, which can increase your chances of succeeding.
Identify what unique value you can offer. Maybe it’s a feature that solves a pressing pain point more effectively, a superior onboarding experience, or a pricing model that’s more flexible.
These differentiators form the core of your unique value proposition.
Also, consider the customer segments you'll target.
If you've identified a customer group that your competitors aren’t focusing on but are relevant, focus your product development and marketing efforts on serving that segment’s needs.
Record everything in the competitor analysis template:
Additional Tips for Doing a Competitive Analysis
Follow these tips to get the most out of your competitive analysis project.
- Document your findings: Record all research in a clear template copy or report. This makes it easier to draw meaningful insights and share them with your team.
- Base decisions on data: Let real data guide your conclusions (rather than making assumptions or guesses). This will help you make better decisions.
- Keep your approach consistent: Analyze each competitor with the same depth and method. This will help you maintain reliable comparisons and produce more balanced strategic insights.
- Use tools and do a thoughtful manual analysis: Tools and software provide valuable data. Use them to extract insights and then do a manual analysis to uncover deeper patterns and nuances.
Start Your First Competitive Analysis Project
You now have all the knowledge needed to conduct a thorough competitor analysis.
Plus, you’ve seen a competitive analysis example that solidifies what a finished evaluation can look like to illustrate how to execute the research properly.
If you’re ready to begin, know that Semrush offers tools to help with the research.
Sign up today to get started.