Competitive research can reveal trends in the marketplace and gaps in your own business plan.
Competitive research is a crucial part of any good marketing plan. This term may elicit some negative images but competitive research has nothing to do with spying. It has everything to do with paying attention to your competition and what they are doing.
Many people will lose out on business to competitors they have never even heard of simply because they’ve never taken the time to do competitive research. Understanding what your competition is doing will help you position yourself, and your product or service, within the market.
What is competitive research?
Competitive research involves identifying your competitors, evaluating their strengths and weaknesses and evaluating the strengths and weaknesses of their products and services. By looking at your biggest competitors, you can see how your own products and services stack up and what kind of threat they pose to your business. It also helps you identify industry trends you may have been missing.
Four benefits to doing competitive research are:
1) Understanding your market. Competitive research can reveal trends in the marketplace that might have otherwise been missed. The ability to identify and predict trends is a huge asset for any business, helping to improve value proposition for customers. This is an important component of competitive research that you should constantly be doing.
2) Improving your marketing. Your customers care about how your product or service is going to make their lives better. If they are leaving to go to one of your competitors, it’s probably because that company does a better job of explaining the benefits to the customer base, or does in fact provide a better product or service. Competitive research helps you understand why customers choose to buy from you or your competitors and how your competition is marketing their products. Over time, this can help you improve your own marketing programs.
3) Identifying market gaps. When you do competitive research, you’re analyzing the strengths and weaknesses of your competitors. You’ll often find that, by looking at the data, there is a segment of the population that is being underserved. This could put your business in a unique position to reach those customers.
4) Planning for the future. The most important byproduct of competitive research is that it will help you create a strategic plan for your business. This includes things like improving your product or service, using more strategic pricing strategies, and improving the promotion of your products.
6 steps to competitive research
It may sound obvious, but the first step is to simply identify who your top competitors are. There are two different types of competitors to identify: direct and indirect.
Direct competitors are targeting the same customer base you’re targeting. They are solving the same problem that you are trying to solve and sell a similar product or service.
Indirect competitors may sell something similar to your product or service but target a different audience, or they may target your same customer base but have a slightly different product or service.
It’s important to understand this segment of your market for two reasons: (1) it could provide you with growth opportunities for your own business, and (2) it could also highlight a threat to your business of which you would otherwise be unaware.
Here are six steps to getting started on competitive research:
1) Identify main competitors
The most obvious way to do this is simply by searching your product or service category on the web and seeing what comes up. You can also check websites like Crunchbase or Product Hunt. You may find competitors that you might not have noticed before.
The goal is to cast a wide net and get an idea of who your main competitors are. Another good way to identify direct and indirect competitors is to ask your potential customers what services they are already using.
2) Analyse competitors' online presence
Once you’ve identified your main competitors, you want to look at their website, the type of content they are publishing, and their social media presence. Then, look for any blogs, white papers, and social media content being provided about their products and how to use them. Ask yourself these questions:
- What is the user experience like on their website?
- Is it easy to navigate?
- Do you clearly understand the products or services they offer?
- Is their website mobile-optimized?
- How often do they blog and most importantly, is the quality of their content good?
- What topics do they blog about most frequently?
- What social platforms are they actively using to talk about their products and services?
- Is this content engaging their target audience?
The answers to these questions show you opportunities where you can outperform your competitors. You will want to pay close attention to anything they are doing well that you aren’t doing. This will help give you a better understanding of where you should be focusing your attention and resources.
3) Gather information
The best way to gather information about your competitors is by acting like one of their customers. Sign up for their email list so you can get an idea of how they communicate.
Also, follow their blog and social media accounts and watch how they interact with their customers online. What kind of experience do customers have with your competitors?
You should consider shopping from them so you can see what their product looks like and what the experience is like from a customer perspective.
4) Track your findings
Make sure you track your competitors' findings on a spreadsheet; it will help with ongoing monitoring. This isn’t a complicated process, you just need to keep track of what they are doing over time so that you can see how they change everything from pricing to marketing and promotional activities.
You’ll start by dividing your competitors into direct and indirect customer columns. You’ll then track the following information:
- Company name
- Social media sites
- Unique features
- Pros and cons
- Screenshots and additional links
5) Check online reviews
Try to find as many reviews of your competitors as possible. Read their social media reviews, comments on their blogs, and case studies on their website. If they offer and present Google reviews, read them as well. It’s a good idea to understand not only the good things that your competitors may be doing, but the bad things as well. Include mentions with the Better Business Bureau about them in your research.
How customer-focused are they? This could be an opportunity for you to stand out. And, if they sell a product similar to yours, this will be a good way to find out if a lot of people are interested in it.
Any negative feedback will help you identify areas where you can improve your own product or service.
6) Identify areas for improvement
Now that you’ve taken note of some of the biggest differences between you and your competitors, it’s time to think about how you can use this information to improve your own business results.
Your competitive research should reveal at least one area your business can stand to improve in. This will help you learn how to engage better with your customers and online followers.
Keep in mind that competitive research is never a "one-and-done" event. Ongoing monitoring, such as observing how competitors evolve, is necessary to ensure that you are staying competitive in the marketplace.
Competitive research can seem daunting at first but it’s an essential part of running a successful business. When you incorporate the right tools into your research, you may find that it’s not as difficult as you imagined.
On some level, understanding your competitors is just as important as understanding your customers. Your competitors have valuable lessons to teach you and it’s important to regularly monitor their online activity. Doing so will strengthen your business and improve your own value for your customers.
How we can help
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