Competition is everywhere and inevitable. We all know this truth very well. But are you wondering how the biggest brand or retailers reach the top position in such cut-throat competition? One of the main reasons for their success is their understanding of the competition. It is tough to stay the best unless you know where you stand as compared to your competitors, how you differ from them, how you can make a difference in the market and how you can improve your mistakes thereby growing the market share. Pricing plays a very vital role in such scenarios.
It goes without saying how price-sensitive customers are. It becomes all the more important in today’s competitive market to compare price with the help of price analysis tools. It is easy to compare prices with strategic competitive price analysis which contributes to the success of retailers. You need to first identify your competitors and rank them with respect to pricing. This will enable you to create an effective strategy for beating the competition.
In today’s blog, let us understand how competitive price analysis can help your eCommerce business grow in vivid ways.
What Is Competitive Price Analysis?
Competitive price analysis is about researching the competitors for getting a better understanding of their strengths and weaknesses. This helps in comparing the results of the research with own business operations and improving the operations as required. This type of analysis offers a competitive advantage to your business and also highlights potential business opportunities.
The analysis will help in identifying where you stand in the retail arena on the basis of the price point. You will be able to identify if you need to increase the prices for growing the margins or decrease them to gain a competitive edge. The Competitive price analysis will also throw light on your competitor’s existing price strategy. Are your competitors changing the prices by the minute like Amazon or do they change the price quite slower? All this information will help in optimizing your prices. In short, competitive analysis offers actionable data for improving your pricing strategy.
Steps To Perform Competitor Analysis
1. Identifying The Competitors
You can begin this with Google as it is here that your customers start shopping. Your basic search fora competitive pricing should begin here. You can shortlist your prospective competitors with a Google search. Simply type the name of your product, service, or industry and see the results. Make a list of the companies that pop up.
Google is an excellent tool for customers which makes it quite useful for your competitive price analysis. Search for your product and Google will show the most important and relevant companies. These are the same results that your customers will see. You can make use of competitive intelligence tools for getting insight and taking action for your company’s improvement.
2. Categorize The Competitors
When you search for your competitors, the results that rank high might not be your actual competitors who are taking away your customers. Though it is important to track both! It is important to bet your search competitors on Google and rank higher for driving more customers to your website. You need to categorize the competitors. While making the list, categorize the competitors into primary and secondary.
Further, go in-depth and segment them into search competitors and price competitors. You can also create a list of new competitors and the ones who sell products which you wish to develop one day. All these lists will help in strategizing your pricing based on how they compete such as Google, real life, on the basis of product, based on prices, or other criteria.
3. Go Through Competitor Content
You need to have a look at how the competitors are talking about themselves along with the products you have in common with them. You can find this out by reading the content on their website or visiting their store physically if required. You can begin by going through their blog posts. You both are likely to have the same target audience.
Have a look at how your competitors describe their products and solutions. You can download gated content such as ebooks and whitepapers. Downloading their product guides or brochures can also help. If there are any videos, watch them and subscribe to their newsletter. You must also visit their social media profiles.
4. Analysis Of Competitor Prices
This is a crucial step. One of the main reasons for analyzing the competitors is optimizing their own prices for the market. Knowing how competitors’ prices can prove to be a great advantage. With price intelligence tools you can check the prices listed by competitors on various e-commerce portals. Take note of the pricing strategies. The idea is to know their prices and then price your products lower. The goal is not always to lower your prices but to understand their pricing pattern and strategies. The insight will enable you to create your data-driven pricing strategy. WebDataGuru is one of the leading pricing analysis companies and helps distinctive businesses reach their goals.
5. Compare the websites
Competitive price analysis also includes reviewing the websites of each competitor to know about their online presence. Websites are representative of the customer’s journey. You need to see if the website is updated, if it has broken links, does the website offer a smooth checkout experience, etc.
Compare your website with competitors to see which one is better from a customer viewpoint. This will help in making strategic improvements to your own website.
6. Value Proposition
When you are almost done with your analysis, it’s time to make a list of the value proposition as compared to the competitors. Look at what’s important to the shoppers. Is it convenience, value, or quality? When there’s an overlap, the customers might move to next important proposition for making the buying decision. You must also take note of the props that don’t matter to consumers. These analytics will tell how to revise the strategy and gain a competitive advantage.
7. Read Customer Review
You need to check all customer reviews to get an idea about how consumers view your competitors and their products. This will help in identifying areas that need to improve for beating them. A good strategy is to know what shoppers want, and how they think, and offer products or services accordingly to meet their needs.
Competitive price analysis can help in showing your business a way forward. Use the right tools to make the most of it.
Benefits of Competitor Price Analysis
When we see how effectively the competitor analysis can be done, let us also throw some light on the benefits of the same.
1. Very Easy to Run and Maintain: Now, when we talk about automated pricing intelligence tools, they are quite easy to implement. Your existing team or an individual can conduct the analysis with just some basic research on the competitors. Additionally, once you are into the big leagues, you can hire experts like WebDataGuru or invest in their amazing pricing tools to monitor in a more precise, professional, and quick manner.
2. Fast Results: Automated pricing analysis gets you results quicker. It also provides in-depth analysis with valuable insights. Having a deeper understanding of your competitors can help you keep a close eye on their every move. Also, not to forget, pricing analysis is very simple to use with fewer inputs. Now, if you have an online retail business, then time is everything with regard to price, promotions and executions. So, pricing analysis helps you be on time with effective results and enables you to focus on the main course of action than the constant price changes.
For instance, if your competition has lowered their price, and you have put an input of keeping your prices intact without sudden moves. Then, the pricing will not impact your strategies. The reason is to not engage in tedious pricing wars.
3. It increases Traffic and gets you Noticed: The main motive behind all the exercise is to stay in the top-of-mind recall for your target audience. And that can be done in only a few ways. Competitor pricing analysis, you make a presence in the minds of the shoppers. So, this helps in building brand loyalty. Now, when we say that brand loyalties are significant, there is a very valid and powerful reason. Simply put, with brand loyalty, customers are more likely to stick with your brand if there are minor price changes. Having said that, you must justify the change in price. As customers want some reward to pay the premium. It could be tangible or intangible.
4. Building a Brand: You want your business to become a brand. And that can’t be done in a day. You might need to put in many efforts to achieve that goal. Pricing analysis is one such endeavor. You can understand the market position which will enable you to incorporate different strategies according to your set objectives.
Get, Set, Price!
It is a race, and everybody is here to win. So, you need only the best to win a race. WebDataGuru is your best shot to become the market leader of your industry. So, order a free demo today!