How Competitor Analysis Helps You Stay Agile In The Business World

There is a very old truth about selling things

. Be it a product or service the truth remains the same. Something is only worth what someone else is willing to pay for it. And of course in a competitive business sector, what you charge for your product or service has to reflect what everyone else charges otherwise what someone is willing to pay for what you sell isnt going to be what you sell it for. Competitor analysis is key to setting your prices so you can both retain loyalty and make your margins work.

Obviously competitor analysis doesnt begin and end with prices. What you are looking to do is stay ahead of the whole service provided by the companies competing with you for a market share. When they delete products from their inventory you can exploit the gap. When they add product you dont have you can find out why and redress the balance.

It is all about making sure that your company, your business, doesnt fail to see trends happening or stays unaware that someone else is undercutting you in one of your core service areas. Ultimately competitor analysis is about retaining the people who buy your brand already and creating new brand fans by attracting business through enticing pricing.

The theory is the same in every aspect of your online life. Price analysis allows you to see where others are more attractive than you and where they arent. It also means you can find out what promotions your competitors are putting together and when they are doing it. If a competitor has items on promotion and you dont, you wont sell anything like as many as they do.

Also, competitor analysis can help you to identify occurrences in which you are charging too little for a product. If your product has actually been priced too low, then you may be losing margin despite gaining a large market share of the sales. The trick, of course, is to strategise your prices so the margins remain profitable while the prices themselves look more attractive than anyone elses.

Part of your price strategy needs to involve the creation of some loss leading prices where other prices take up the slack thus created. The calculation you need to do requires strict competitor analysis across a range of products.

For example you may wish to corner the market selling product A. But your competitors have prices the same as you, and theres no real room for going down without selling at an insufficient profit.

However, if you have other products that could actually be sold for slightly more, which in total would represent a making back of the loss you take on product A, then you can afford to make the change. And of course you will never know this to be true unless you perform competitor analysis across a wide range of the products you are currently selling on your site.

Analysing the competition isnt cheating, it is staying ahead of the curve.

by: Price Trakker

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