deep dive into
Not nearly enough small businesses startups engage in any form of formal competitor analysis. Wise Business Owners know it’s a road map for where your business can improve.
A competitive analysis can help you learn the ins and outs of how your competition works, and identify potential opportunities where you can out-perform them. It also enables you to stay atop of industry trends and ensure your product is consistently meeting — and exceeding — industry standards.
1) Enables you to identify what your competitor is doing right
2) Tells you where your competitors are falling short
3) Fine-tune and Develop your Unique Selling Proposition (USP) Why your brand?
4) Improve Owned Products and Services. As your brand expands so will your customers' needs and expectations
5) Establish a Brand Benchmark
6) Identify Gaps in R&D and Hiring
7) Discover Potential Threats
The competitor’s website and social media pages can be your starting point. The website and social accounts will give so many hints about their strategy and sales plan.
Ask the following questions:
Do they have customer reviews and testimonials on their website?
Do they have the pricing on their website?
Do you think their website appeals to a specific type of customers, e.g. students, females, executives, kids or ethnicity etc?
Do they collect leads on their website and how, e.g. newsletter subscription, free download/trial etc.?
How are they using social media?
Do they have a brand story to tell?
How are they telling their brand story? Which media are they using?
Do their products offer benefits that yours don’t? What are they?
Do they promote any social cause on their website?
Are they doing paid ads, as in PPC, AdWords or Facebook advertising?
The key to SEO and conversions is a good user experience. It keeps people coming back to your website, blog or social media page. And a bad one can make you lose them forever.
Compare your own website with them:
What’s the most impressive thing about their website when you first land there?
Is it clear to a user at first glance what business they’re in and what value their product offers?
What kind of content or functionality do they offer on their website to help their customers? (e.g. how-to videos, e-guides, price calculator, FAQs, live chat, etc)
Is the navigation and important sections of the website easily accessible and comprehensible for a first-time user?
Do the action buttons or lead capture forms stand out without being intrusive?
What kind of visuals are they using and how impactful are they?
Do they have a blog? How often are they posting on their blog?
Do they have a mobile app? Should you have one too?
It’s important to have “trust signals” such as testimonials, social proof etc.
Do they feature customer testimonials, product reviews, or social media comments?
Do they offer a money back guarantee, after sale service, or other warranties?
Do they boast about any awards, distinctions, achievements, affiliations, certifications, or trade union membership?
In case of e-commerce, how reliable are the payment methods (PayPal, Mastercard, Visa) of the website?
A competitive analysis can vary widely depending on what it is you’re trying to learn about your competitors.
If you’re not sure what that is or how to do one, you’re in the right place.
At Hoi Polloi we have an Analyst. A fortunate circumstance. That often is not the case for many small businesses. We can guide you on securing a Competitive Analysis for your business.
Product Cost and Pricing Strategy
Product cost refers to the costs incurred to create a product. These costs include direct labor, direct materials, consumable production supplies, and factory overhead.
The cost of a product is this calculation:
(Total direct labor + Total direct materials + Consumable supplies + Total allocated overhead) ÷ Total number of units = Product unit cost
So, knowing product cost is crucial to a small businesses success because you have to manage costs to be profitable. So many sales decisions have to be made based on COST.
Knowing your product costs can help you price your products and budget your small business's money.
Direct Labor Costs
Direct labor costs are the total costs you incur to employ the workers that directly assemble or manufacture your products. These costs include wages, payroll taxes, pension contributions and contributions for life, health and worker’s compensation insurance.
Direct Materials Cost
Direct material costs are the materials your small business uses to manufacture a product that you can trace directly to the product.
Manufacturing Overhead Costs
Manufacturing overhead costs are those necessary to making a product, but that you cannot trace directly to a specific product. Examples include indirect materials, such as masking tape, and indirect labor costs, such as the costs to employ a maintenance worker.
Product Cost and Product Cost per Unit
Add together your total direct materials costs, your total direct labor costs and your total manufacturing overhead costs that you incurred during the period to determine your total product costs. Divide your result by the number of products you manufactured during the period to determine your product cost per unit.
What is a Pricing Strategy?
Universal Principle ~ “Pricing isn't a decision you only get to make once.”
Many small businesses evolve their pricing strategy over time. Pricing your products is one of the cornerstone decisions you’ll make, because it impacts almost every aspect of your business. Your pricing is a deciding factor in everything from your cash flow, to your profit margins, to which expenses you can afford to cover.
That’s why it’s all too easy to get stuck on your pricing strategy when you’re launching a new store or product, but it’s important not to let the decision stop you from launching.
Cost-plus pricing is calculated by working out your costs and then adding a markup. This is an easy pricing strategy for most people to calculate and will ensure that your business is making a profit. However, the downside to this pricing strategy is that the price is calculated totally based on the business’ needs.
Competition-Based Pricing Strategy
A competition-based pricing strategy, also called strategic pricing, is created by reviewing the pricing of your competitors and then setting your prices in the same region. By setting your prices at a similar pricing to your competitors the aim is to ensure that you are being competitive in pricing from a consumer perspective.
Freemium Pricing Strategy
As you might have guessed freemium is a combination of the words “free” and “premium”. A freemium pricing strategy is where a company offers a basic version of its product for free and then the buyer has to upgrade in order to access more features.
Penetration Pricing Strategy
A penetration pricing strategy takes into consideration competitor pricing, but unlike competition-based pricing, the final price is deliberately set in order to undercut the competition. The aim of a penetration pricing strategy is to be cheaper than everyone else in the market and therefore quickly gain traction and hopefully grow market share.
Hourly Pricing Strategy
This is a pricing strategy used in the services industry where you are charged by the hour. This pricing strategy can be combined with other strategies, for example, you might use a cost-plus pricing strategy to work out your hourly rate.
Project-Based Pricing Strategy
Project-based pricing is another pricing strategy used in the service industries. Rather than using an hourly pricing strategy you may choose to use a project-based pricing strategy. This strategy is often preferable to customers/clients than an hourly pricing strategy because they know they are paying one fee for something specific to be delivered. If you decide to use this pricing strategy in your business then you’ll need to ensure that you are able to accurately predict the number of hours a project will take to ensure the project fee leaves you with a profit.
Premium Pricing Strategy
A premium pricing strategy is where you purposefully will set your prices at a premium rate. By setting your prices at an inflated rate the idea is you’ll give the impression of a higher quality product or service. This pricing strategy is often used in conjunction with premium branding.
Bundle Pricing Strategy
A bundle pricing strategy is where multiple products or services are sold together for one combined price. This pricing strategy is useful if you have something to add in to the bundle that has a higher perceived value than the cost.
Psychological Pricing Strategy
Have you ever wondered why products are priced at $199.99 instead of $200? This is an example of psychological pricing. This is where prices are set based on how they are perceived. In most cases rather than being a round number like $200 they will be priced just below with either a 9, 7 or 5.
Product pricing can make or break a small business. There is no simple formula for getting prices right.
Hoi Polloi can guide you to determine accurate product costs and advise on different business pricing strategies and methods to help determine that “sweet spot that satisfies you and your customers.
Unless you’ve been living on a deserted island for the past several years, you know the power and impact that social media can have in today’s internet culture. Small Businesses have been built—in some cases overnight—on the strength of a Tweet, Instagram post, or Facebook message. At the same time, some businesses have felt the adverse effects of such power: a poor review, a complaint that wasn’t handled properly, or a service that wasn’t performed as promised.
Social media is one of the most powerful tools available today to help grow your business. But how do you decide how to work your way through this sometimes complex, often confusing field of tweets, photos, and blog posts? And how do you know that what you are posting on social media is being read (and turning into business)?
Measuring Through Social Media Analytics
Social media analytics can help gauge the power and reach of our customer’s social media platform. In a nutshell, these metrics help measure the performance of social media channels.
One example of a social media analytics metric is click-through rate, which is the percentage of people that click your link from a social media post to your actual website.
Social media analytics can give insight into a variety of topics, including audience growth, content engagement, customer service, and even conversions from prospect to customer.
These questions can be answered with social media analytics:
Are you attracting new customers with your social media?
Is what you are posting interesting and are your customers engaging with the content?
How quickly does your customer service team react to customer inquiries via social media?
Is the response from your customers positive?
Does a click-through lead to a sale?
With analytics, the more data available, the better. This includes data from competitors and customers. Ultimately, this drives the decisions on social media content topics. It also determines the form that the content should be delivered in (video, text, graphics) and even how often and when the content should be shared.
Can Social Media Grow My Business?
Social media is a powerful tool. And it’s something that, done correctly, can have a significant impact on your bottom line.
These three areas are where social media can advance your business:
Research shows that 67% of consumers have interacted with a brand via social media regarding a customer service related question. Those questions, and answers, can be shared quickly through social media. That expands your reach while doing something you are doing already—servicing your customer base.
Build Your Brand
The power of social media to build a brand’s image can’t be understated. A positive message about your brand, or a photo that highlight’s your product, can be shared by thousands of customers via social media. Social media is an excellent place to share your brand personality.
Make a Sale
The bottom line with any campaign is to turn prospects into customers. Social media is very powerful in this arena. Recent research from Sprout Social shows that answering a customer’s question on social media prompts 49% of consumers to purchase.
At the end of the day, it is all about the amount of data that is collected and analyzed. Armed with that information, small business owners are prepared to ensure your social media strategy is meeting your marketing needs. With the right analysis and implementation, social media can be a powerful platform to grow your business.
Hoi Polloi understands the value in well executed social media. The benefits are enormous. We advise and guide our Clients on establishing and managing social media in their business.
We recommend Sprout Social
Why? Sprout Social is a powerful, all-in-one social media management platform unlocks the full potential of social to transform not just your marketing strategy—but every area of your company. It is the leading platform to extract real business value from social media data. It’s usability, customer support and exceptional analytics are what we find as it’s best value. Sprout allows Hoi Polloi to analyze and track trends on social media to make sure our content is resonating, and the time we’re spending has a much greater impact.
Click this logo to visit the Sprout Social website to learn more.