Running a dental practice is like managing a high-intensity tactical team. You need excellent services, a cohesive team, and a flawless strategy to survive the competitive world of dental clinics. In the wise words of Sun Tzu, “if you know the enemy and know yourself, you need not fear the result of a hundred battles.” Hence, the best way to win a hundred battles is to know your enemies inside and out—by conducting competitive analysis.
Competitive analysis is also an excellent method to gain insights into your strategies. There are new technologies and treatment styles launched almost every other month. Therefore, you must conduct competition analysis regularly and comprehensively. Moreover, you need to keep abreast with changes in customer behavior and market trends.
What is competitive analysis?
Dental practices use competitive analysis to gain insight into their competitors’ strategies, treatments, and sales. You can better plan your course of action when you know what your competition is doing. The key to success is in preparing. Plus, you can only be prepared when you know what is happening. Additionally, this analysis helps you understand the market and changing customer demands.
Competitive analysis helps you identify areas of opportunity in the market and how your services or treatment performed against your competitors through the use of metrics. Any dental practice can conduct a competitive analysis, big and small. There is no prerequisite to doing so.
As aforementioned, running a practice is like running a tactile team. So, to run a team, you need a game plan. That is exactly what a competitive analysis is. It is your game plan. Your competitor’s game plan includes its strengths, weaknesses, and how they are leveraging the market. Whereas, your game plan includes how to perform better than them.
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How should you perform your competitive analysis?
Before we get started with the steps involved in competitive analysis, we first need to understand what a methodology is. You can lose define methodology as “an outline of how a study should be carried out.” Why is this important to competitive analysis? An excellent question. A competitive analysis is a methodology. Therefore, by extension, it is an outline for your analysis. This means that there are no hard and fast rules to it. The entire process involves many steps and stages that you can repeat. Additionally, you can skip a step or go back to a step until the result satisfies you. Therefore, competitive analysis is a framework upon which you build your study.
Step 1: Who are your competitors? What are their offerings?
This step sets the tone for your study since it is the first step and obviously a very important one. Your data in this step needs to be accurate because it will affect the next steps. Once you have a lot of competitors, your next step would be to segment them into two. The first is direct competitors. They are the companies that are an exact alternative to you. The second is indirect competitors, companies that do not completely replace you but offer something similar.
You are fidgeting for the same audience segment as your direct competitors. Hence, they are your biggest threats. Whereas, you and your indirect competitors have a tiny segment in common. Not a threat but still a concerning issue. Plus, an indirect competitor can expand into your area of expertise, thus becoming a direct competitor.
Step 2: Identify their target demographics
This step highlights why the first step is crucial to your competitive analysis. You share your demographic with your direct competitors and a tiny segment with your indirect competitors. Plus, it’s hard to determine who your direct and indirect comparator is. Diving into customer segments will help you identify your competitors accurately. With consumer data thus acquired, you can assess your competitor’s customers and who their ideal client is.
By studying customers, you will gain insight into customer behaviors and targeting tactics. Businesses always craft services that fit their customers. Therefore, you find who the customers are, and you can figure out who their clients are, or vice versa.
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Step 3: Study the marketing strategy
Studying your competitors’ marketing strategy means you have to spend a good chunk of your time going through their social media. It would be fun if it wasn’t for the “work” you have to do. Note their engagement levels, tone of communication, online brand perception, etc. Since companies design marketing efforts for specific audiences, you will identify their strategies easily.
You can use their social media (Instagram, Facebook), website, and blog. Other popular research platforms also include Quora (and other Q&A websites), reviews, etc. After you gather all the consumer data, your next step is to segregate the audiences into primary and secondary target demographics for further analysis. Plus, keeping track of all their campaigns will give you insight into current market trends.
Step 4: Reviews, feedback, and improvements
People say that the eyes are the windows into the soul. Similarly, testimonials and feedback are the windows into a brand’s public image. A brand’s public perceptions play a big part in how customers interact with it. It also provides insight into what areas your competitor is performing well in and where they are lacking.
Once you have all the data, you then compare yours with it. With the comparison, you can define areas of opportunity in your marketing strategy and services. It is the best example of “learning from others’ mistakes.”
Step 5: Sales strategies and results
Selling is not as easy as exchanging a product/service for money. Since dental practices are businesses, you must develop sales funnels to smooth out the process. Plus, having guidelines in place ultimately helps your sales team to pitch and sell better. Sales strategies are instincts as much as they are a formula. Therefore, make sure you cover all bases when it comes to understanding your competitors’ sales and developing yours.
Step 6: What pricing, discounts, and additional services do they offer?
When dental clinics gain a customer, they usually do very little to keep them. Most practices fail to understand that customer retention (in most cases) is far more crucial to growth than gaining new ones. Therefore, you should not treat new customers like the old ones. Free or discounted services are an excellent way to attract new customers. The same can be rewarded to old customers. Your clinic can create long-term dental packages for loyal clients with a few free cleanups or discounted treatments. Plus, such perks can convert a buying customer into an advocate.
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