Competition research — To be the best in your industry you need to stay ahead of your competitors. It is just as important to understand your competitors as it is to understand your customers.
A competitive analysis can help you to get valuable learnings and insights on your competitor’s efforts, to help you realize the dos and don’ts even before you start any of your growth efforts.
And that doesn’t go just for marketing. A thorough competitive analysis can help you to understand if your product is on top of industry standards, if it satisfies your customers’ needs, etc.
Performing a competitive analysis will not only help you to keep pace with other industry players, but to help you find opportunities where you can out-perform them!
In this article, I’ll try to teach you how to conduct a useful competitive analysis that will help you to set all parts of your growth strategy. And I’ll share a bunch of examples and templates to help you out.
What is a competitive analysis?
| A competitive analysis is the process of identifying and analyzing your competitors, their sales, marketing strategies and product details. The insights you gain can be used to create or improve parts of, or your overall business strategy. |
Why should a competitor analysis be a crucial part of your growth strategy?
You can either do a general competitive analysis, on a high level, or focus on specific business aspects (for example sales or marketing micro channels, product features, design…). Whatever is your choice, spying on your competitors is certainly worth it. I mean, why go blind when you can:
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- Get a better understanding of your market.
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- Learn what are the industry trends.
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- Set benchmarks to measure future growth.
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- Identify your company’s value proposition and USPs (unique selling point).
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- Find out what your competitors are doing right, but are they missing any opportunities.
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- Come up with growth ideas!
Now, let’s jump to the actionable steps you can take to conduct a comprehensive competitive analysis.
Disclaimer: I will recommend some sources to check out and tools to try, but they are not sponsored, or affiliate links.
The TL; DR
(Key points)
How to do a competitive analysis?
1. Identify your competitors
2. Research your competitors 4 P’s
3. Create your competition’s target customer
4. Research your competitors marketing channels
5. Research your competitors sales channels
6. Analyze yours and your competitors’ strengths and weaknesses (SWOT analysis)
Depending on your business and goals, you can further expand your analysis, but these steps are good for starters.
Okay, so first, you need to figure out who you are competing with. You probably already have some competitors in mind, but here’s how to identify more:
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- Search your service/product category on Google (and other search engines)
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- Run a survey among your existing customers to ask what alternatives to your business would they consider
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- Find directories that list businesses similar to yours
Pro tip: Once you identify a couple of your biggest competitors, run a basic keyword research to understand which ones they are ranking for. Then you can google those keywords and find more businesses that rank for them.
Tool to help you out: There are a bunch of keyword research tools to choose from, free and paid. In Ahrefs, for example, the process is simple:
Type the website URL you want to inspect and go to the Organic keywords section:
Pro tip: Don’t compile a too long list — it is better to keep it short and focus on researching each of them.
When you finalize your list, you can organize the competitors into:
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- direct competitors — they offer a similar product/service to a similar target audience.
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- indirect competitors — they offer different products/ services, but in the same category and target an audience similar to yours.
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- replacement competitors — they exist outside your product category, but can satisfy a similar customer need.
…so you get an accurate assessment of your market.
Example:
Let’s say you are selling Montessori toys online. The first thing you should do is to check which websites are ranking well on Google for the “montessori toys”, “montessori toys online”…keywords. Disregard the ads at this point.
Now, let’s check the keywords that, for example, kidly.co.uk is ranking for:
I’ve marked the keywords that have a big search volume, and (in Ahrefs) just by clicking on them you can find websites that are ranking for them (…and voilà, there are more competitors!):
I am sure that in this list there would be relevant websites that are selling Montessori toys (direct competitors), but also ones that are selling similar (wooden toys), or complementary toys (educational books). And that would be some indirect and replacement competitors.
At one point you should do an in depth analysis of your competitor’s product/services (…and this is something you should stay up to date with), but here we’re talking about the cores.
The 4 P’s, product, price, promotion, and place, are the basis you should analyze, for each competitor you’ve listed.
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- Product/Service:
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- What is the competitor selling?
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- What are the basic features that the product/service offers?
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- What do the customers like the most about the product/service?
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- What are some weak points of the product/service?
Pro tip: Don’t skip the customer reviews.
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- Price:
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- What’s the price range of the competitor’s product/service?
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- What is the price model (one-time purchase or a subscription)?
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- Are there any pricing packages? Are they associated with the product/service quality, or the quantity?
Pro tip: If the prices aren’t stated clearly, schedule a call with your competitor’s sales team, or send an email to get a proper quote. It is a bit of a hassle, but you’ll get more insider info on their sales process, which is always valuable.
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- Promotion:
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- What advertising channels are your competitors using?
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- What is the unique selling proposition?
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- What is the branding like?
Pro tip: Don’t forget to sign up for the competition newsletters, and join their private communities!
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- Place:
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- Where do the competitors sell their product/service?
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- Are there any reseller, or affiliate programs they use?
Pro tip: You’ll stumble upon a lot of information, so try to keep everything concise — stick to the most important info, and you’ll expand the research later on.
Getting an idea of who your competitors sell will help you to define more details about your customers. Here’s how to profile your competitor’s target:
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- Read all documentation you can find about their mission and use cases.
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- (Again) check the reviews, especially if they featured any in particular.
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- If they collaborate with influencers, check what type of audience they gather.
Example: Usually, you’re going to find all needed info at the bottom section of the competitor’s website:
Pro tip: Keep an eye on your competitor’s ads (I’ll show you later how). Based on the creative formats and messaging, you can learn valuable info about the audience the ads tend to target.
Well, I’ll limit my tips to analyzing those competitors that have a website and tend to market it online. Mark down details about their:
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- Messaging (focus especially on the homepage and product page, etc.)
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- Blog (what type of content do they post, how often, what’s the word count, etc.))
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- Lead magnets (ebooks, whitepapers, etc.)
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- Content strategy (types of content, topics, length, tone etc.)
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- PPC (Social media, Google, etc.)
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- Influencer marketing (which influencers are promoting them)
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- SEO (keywords, backlinks, etc.)
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- Social media (posting, visual appearance, etc.)
Once again, don’t go too much into details — the idea is to get just an overview and some ideas from where to start.
Tools to help you out: If you’ve been reading my other posts, you can already guess that I’ll use Ahrefs and SEMRush, but this is just because they really provide accurate, valuable, comprehensive data.
Just type a competitor’s URL and you’ll get useful info about your competitor’s backlinks, organic and paid keywords, most popular pages (organic and paid), ad copy, traffic details, domain overview…and much more. I’ve listed just some common stuff I usually start from.
Find out more: How to Do a Competitor Analysis with SEMRush, How to Conduct a Competitive Analysis with Ahrefs.
5. Research your competitors sales channels
It can be hard to understand your competitors’ sales process and channels they use, but there are some things you can find out.
Here’re some questions you should try to answer:
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- What does the sales process look like?
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- What sales channels is your competitor using?
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- Are there any reseller/affiliate programs?
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- Are there regular discounts?
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- How involved is a salesperson in the process?
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- How do they manage shipping and the shipment costs?
These insights will give you a heads up on how you should organize your sales process.
However, the main issue with this type of research is to find accurate info. Usually, the best way is to act as a client and to go through the competitor’s sales process (…if this is in line with your ethical standards).
6. Analyze yours and your competitors’ strengths and weaknesses ( SWOT analysis)
The info you gathered is valuable to evaluate the strengths and weaknesses of your competition, but your business as well. You’ll see, as you analyze each component in your competitor analysis (business, sales, and marketing), you’ll start to seek for more data that will add value to your SWOT analysis.
After you compare your competitors’ strengths and weaknesses, you can better position your company, and start to uncover areas for improvement!
Again, here are some questions you should start from:
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- What is the competitor doing well (in each micro segment of the research)?
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- What could they do better with?
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- What’s the biggest strength of your competitor?
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- Is there anything where you have a competitive advantage?
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- In what areas would you consider this competitor a threat?
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- Are there any untapped opportunities for this competitor?
How to do competitive product research?
When you have a product to offer, there are several more things you should analyze. Basically, a product comparison drills down to locate the key differences of the products competing in the same market.
Here’s how I would perform the product competition analysis:
1. Compare product features
List the key features of both your and your competitor’s products and make an in depth comparison.
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- What are the main features your product has to offer?
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- What are the main features that your competitors offer?
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- Does your product have any (dis)advantage when it comes to features?
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- What features do complementary products have to offer?
2. Compare product pricing models
Depending on the product you are selling, you can (and it is recommended) offer several pricing packages.
If you have a SaaS you can divide the package according to the features they include. If you have an ecommerce business you can offer bundles, different shipping options,etc. If you have a physical product, perhaps you can adjust the packages to the models.
My point here is to see how your competitors organize the features/bundles/models into different pricing packages and try to figure out the best ones for your business model.
3. Discover differentiators
Now it is time to dive deeper with product differentiators, to find what’s the biggest selling point of your competitor’s products.
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- What is the main thing your competitors’ products have that is better than yours?
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- What is your product’s USP (unique selling point)?
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- How likely is it to add your competitors’ offer to yours? How much would this potentially cost?
4. Find market gaps
The final step in your competitive product research should be to find some untapped market opportunities, market gaps.
If you did the previous steps thoroughly, you should already be able to get some ideas.
Pro tip: Try to focus on details and smaller opportunities first.
Takeaways
Doing a competitive analysis is complex, especially when you’re analyzing many competitors. And yes, it can seem daunting at first, but keep in mind that this step is an essential part of creating a successful business.
You’ll see — after you incorporate the right tools into your research, it’s not that difficult!
Of course, you should customize everything according to your business and your competitors, but the goal of this article is to make the start easier for you :).
Important: Stay objective when it comes to your business. Analyze all info about your sales and marketing as you would evaluate your competition.
Doing a competitive analysis is just the beginning of your strategic business planning. Yes — it is time consuming, but it will set you up for success!
