How to Do Competitive Research
Your business idea is brilliant. No one else is doing it — you’ve got no competition. So it’s sure to be wildly successful, right? Spoiler alert: WRONG.
Unfortunately, there is no such thing as having no competitors. As much as we all want to be 100% original, it’s naive to think that nobody would be able to quickly become a competitor. So it’s important to identify not only the existing and easy-to-identify competitors but also the companies that would become competitors after your product hits the market. In other words, who would be able to develop a competing product quickly?
Competitive research and analysis involve identifying major competitors and evaluate their strengths and weaknesses. By studying your biggest competitors, you can see how your products and services stack up and the type of threat they pose to your business. It also helps you identify industry trends you may be unaware of.
While you may not all have the investigative powers of Sherlock Holmes, it doesn’t mean you need to approach your competition blindly. Here are eight questions you should ask yourself when you’re gathering competitive intelligence:
- Who are your top competitors?
When identifying competitors in direct competition with your business, a thorough understanding of your product and its value to your target customers is crucial to determining your direct competition. A few effective techniques for identifying your direct competitors include:
- Research the market for your product and evaluate which other companies are selling a product that would compete with yours
- Check online communities on social media or community forums and investigate the conversations customers have on these websites
- Conduct a competitive SEO analysis to determine which businesses are competing for space on Google
- What are the best similar products already in the market?
Competitive products are alternative choices potential customers can choose over any new product. Therefore, you must ensure that the new product you’re developing provides potential customers with a compelling reason to purchase your product over competitive products.
A great place to start your search for similar products is looking at consumer product trend publications. Trend Hunter is a top consumer product trend publication is a great place to identify consumer products and the trending product ideas other entrepreneurs are introducing to the market. You can use this information to formulate your value proposition — tell customers how you provide value in a way that nobody else does and that your idea is better than what’s currently available in the market
- What are the characteristics of your ideal customers and your competitors’ ideal customers?
What makes ideal customers different from the rest is the amount of time, effort, and resources needed to acquire them and make them feel good about buying your product or service. The premise behind these buyers is finding the right chemistry between customer and business that fosters a mutually beneficial relationship. Qualities of an ideal customer include:
- They happily pay for what you offer
- They appreciate what you do for them
- They are easy to communicate with (e.g., they’re willing to provide honest feedback)
- They keep coming back
- They recommend you to others
- What are your competitors’ pricing structures?
The more you know about your competition, the more your chances for success grow. A glance at their website provides the basic information you need. You can follow them through their newsletter and get regular updates about everything, including price-related issues. The prices they charge offer a good glimpse. However, the price tag alone doesn’t say much without deeper analysis.
Social media is a treasure trove of information if you know what to look for. Relevant social platforms like Twitter and Facebook offer ways to stay on top of discounts, promotions, special offers, and other clues about their pricing. It’s a cheap and easy way to spy as all they need to do is follow and observe. Inconspicuous social presence on competitor’s social pages can also help identify how your customers react to prices by sifting through their comments, particularly those directly related to pricing.
Playing secret shopper is an excellent way to compare prices, products, and customer service on the spot. It’s also a great way to gather insights into the complete checkout process, including cart abandonment and what offerings customers receive at what prices. This form of “spying” can raise internal operations on a higher level by acknowledging both the good and bad sides of the experience.
- What are their sales strategies?
Conducting a sales analysis of your competitors can be a bit challenging. For publicly held companies, you can find annual reports online, but you’ll have to do some digging to find this info from privately owned businesses. You’ll want to track down the answers to questions such as:
- What does their sales process look like?
- What channels do they sell through?
- Do they have multiple locations? How does this give them an advantage?
- Are they expanding? Scaling down?
- Do they have partner reselling programs?
- What are their revenues each year? What is their total sales volume?
- Do they discount their products or services regularly?
- How are they marketing their products?
Analyzing your competitor’s website is the quickest way to gauge their marketing efforts. Note any of the following items and copy the specific URL for future reference:
- Do they have a blog?
- Do they have case studies?
- Are they creating whitepapers or ebooks?
- Do they post videos or webinars?
- Are they using static visual content (e.g., infographics)
- What about slide decks?
- Do they have a FAQs section?
- Are they using press releases?
- Do they have a media kit?
- Do they publish buying guides and data sheets?
- What online and offline advertising campaigns do they run?
- What is their content strategy?
Do they have several hundred blog posts or just a handful? Are there six white papers and only one ebook?
What is the publishing frequency of these assets? Are they posting something new once a week or once a month?
From there, you should evaluate the quality of their content. After all, if the quality is subpar, it won’t matter how often they post since their target audience won’t find much value. When analyzing your competitor’s content, consider the following questions:
- How accurate is their content?
- Are spelling or grammar errors?
- How in-depth does their content go? (Is it an introductory level that just scratches the surface or more advanced topics with in-depth high-level ideas?)
- What is their tone?
- Is the content easy to read? (e.g., bullet points, bold headings, and numbered lists?)
- Is the content free and available to anyone, or do their readers need to opt-in?
- Who is writing their content? (an in-house team? One person? Multiple contributors?)
Make note of the photos and imagery your competitors are using. Are you quickly scrolling past generic stock photos, or are they impressing you with custom illustrations and images? aIf their photos are custom, are they sourced from outside graphic professionals, or do they appear to be done in-house?
- What is their social media strategy, and which platforms are they using to market their content?
Today a company’s ability to track, monitor, and engage on various social media platforms helps determine its success. Therefore, you need marketing analysis to be informed about key areas of your competition, including.
- Platforms: Is your competition using only the social media standbys of Facebook and Twitter, or if they use other slightly more niche social media platforms like LinkedIn, Tumblr, Pinterest, Reddit, Instagram, and others. Also, see if they engage more often or more effectively on one platform in particular.
- Frequency: How often do your competitors share posts? What kinds of posts (videos, images, text only)? What time of day are they posting?
- Following: What is the overall number of followers for your top competitors? Is their audience growing over time? You can use the tools Tweepi and Followerwonk to analyze your competitors on Twitter in more depth.
- Content: Are your competitors promoting their own content offers and articles, or are they giving equal play to other content creators in the industry?
- Response time: How fast are your competitors responding to customer questions or concerns on social media? Quick responses are important to consumers, so a company that quits responding after 5 pm isn’t in the best position. Instead, aim to provide better customer service than your competitors on social media.
But what to do with all of this information? USE IT. Take it and make your idea better, stronger – different. You know the age-old saying – “knowledge is power”, so put your newfound knowledge (power) into action to distinguish yourself from your competition as you develop your brilliant idea into a viable business.
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