How and why to conduct a competitive analysis
What is Competitive Analysis?A competitive analysis is the process of reviewing your competitors' products, marketing strategies and other client-facing operations. The idea is not to steal their ideas, but rather to improve upon them. Analysing your competitors' strategies can also provide insight into any gaps in your own marketing plans.
Even if your competitive analysis doesn't result in any changes to your own strategies, it's still wise to have an ongoing understanding of what the competition is doing and where they stand.
Routine competitive analyses prevent you falling behind popular marketplace trends. Without them, you risk using marketing tactics that have long since gone out of favour, or fail to adopt new ideas and techniques that are garnering success for your rivals. This is even more crucial nowadays when technology moves so quickly that the threat of falling behind the curve is ever-present.
Here's how to conduct a successful analysis:
1. Identify your competitorsIt's unlikely you're competing in the same market as every other real estate agency in your area, and they'll likely be marketing to different demographics. However, there's still something to learn from those that are far removed from your own brand. These are generally referred to as indirect competitors.
"Don't discount indirect competitors completely. While other agents might not be playing in the exact same sphere as you, they might still be employing innovative tactics that you could learn from," says Claire Deane, Head of Marketing and Communications at the REIQ.
While it is a good idea to keep your finger on the pulse of your indirect competitors, the agencies you'll want to focus your efforts on are your direct competitors. These are the agencies who tap into the exact market demographic that your agency does. They're trying to sell the same houses in the same place as you, and are targeting the same clients you are.
Identifying these direct and indirect competitors should be done with every competitive analysis, no matter how recently you last conducted one. It's very possible for an agency that was previously outside of your market share to have expanded into it. It's not unusual for commercial agencies to grow and take on residential assets, too. Nor would it be unheard of for property management agencies to branch out into sales.
2. Research their sales tactics and resultsIt's generally a bad idea to assume your competitors are performing better than you are. Trying to co-opt their strategies isn't going to work out well for you if those strategies aren't even working for your competitors. Fortunately, it's generally not difficult to gauge the success of a real estate agency. Most will have their recent sales on show, and all of them advertise their current listings.
"Try to rely on data wherever possible, rather than anecdotal evidence. Look at number of sales and listings, rather than assuming a competitor is killing it based on their social media following," says Deane.
A competitor who is struggling can still be learned from, however, if only to avoid the pitfalls they may have stepped into. Research their marketing material - how they advertise a property, what types of media they're using, what kind of language they're using, the volume of material, and so on. At the very least, these competitors can teach you what not to do.
Competitors who are thriving, by contrast, can demonstrate what works well. The analysis should be as thorough as possible. What portals are they using? How do their agents present themselves? What kind of photography are they using? When are they running open-homes? Are they writing a blog or other content? What do their social media channels look like? The list is endless.
3. Objectively analyse your own strategiesBefore you can determine a clear comparison of your competitors' tactics against your own, you need to look at both through the same lens. Ask the same questions about your own agency and place the analyses side by side. This allows you to get a more objective view of your own business practices.
"Take a look at your key performance indicators weekly, monthly, quarterly and yearly. Keeping track of how you're performing will allow you to impartially analyse what's working and what's not, and where there might be areas for improvement. Keep in mind what stats really matter. Your number of social media followers can be a vanity metric, whereas your number of new listings, sales, and repeat customers are all tied to your revenue and much more important to measure," says Deane.
For example, you may feel as though you're not putting enough emphasis on virtual tours, but upon analysis find that only every third property offers one. The same might be true for the general tone of your material - too serious versus too playful.
4. Make changes - if necessaryOnce your analysis and comparison is done, begin planning to implement any necessary changes. Don't feel as though you must make changes based on the findings, however. Just because your competitors do things different doesn't mean they do things better. If you're unsure whether a certain tactic is more effective, consider testing it for just a short time - there's no need to commit long-term.
Additionally, any change in tactic should be deliberate - not just for the sake of change. If a competitor is using a different strategy, try to understand why they're using that strategy, and why it's effective for them. Suddenly adopting comedy into your video marketing might have a detrimental effect if your existing brand identity is based on prestige and professionalism. Marketing is definitely not a one-size-fits-all game.
Similarly, don't make broad sweeping changes overnight. Even if your goal is to shift your brand identity, doing so too rapidly will be jarring and confusing for your clients. Let the change happen gradually and naturally.
It's possible you'll just have a case of a competitor doing something you aren't doing at all, rather than doing it differently. For example, advertising listings on both Facebook and Instagram, while you've only been using Facebook. These kinds of changes are generally easy to implement - often without concern of being off-brand.
5. Conduct a regular analysisThere's little use only checking in on the competition once every three years. By the time you've noticed rivals utilising different tactics you'll already be miles behind. Of course, that doesn't mean you should devote eight hours a week to researching your competitors. A happy medium might be to check once a quarter to see if anything has changed. Quarterly reports should also coincide with goals set by your own team in terms of marketing strategies.
Be sure to start this process from step one each time, to avoid missing any agencies who have switched their demographic and are now targeting the same market share as you are. Be thorough and honest with your own material, make informed decisions and most importantly, don't plagiarise others' material. Instead, let it inspire you and drive your own creativity.
"While it's important to 'keep your eyes on your own yoga mat' and not get stuck in comparison or analysis paralysis, it's important to regularly audit the wider market to stay on top of trends and aim for continual improvement of your own marketing strategies," says Deane.
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