Regardless of their business stage or industry, companies need to observe their competition to gain insights into their strategies and understand how to differentiate themselves. Competitive analysis tools powered by artificial intelligence (AI) make this process easier, especially for time- and resource-strapped small businesses.
According to Bryan Dohmen, Senior Director of Strategy at Hero Digital, answering the basic market and competitive research questions of "who, what, and why" can be done faster and more efficiently when AI is properly applied.
"We can … ultimately get a broader view … of the current state [of the industry, which] allows us to better focus our efforts and develop strategies to take our clients forward," Dohmen said.
[Read more: 4 Steps to Assessing Your Competitors' Strengths and Weaknesses]
AI tools can provide insights to help your business stay on the lookout for opportunities for innovation.
5 key areas for AI-driven competitor analysis
Here are a few ways AI tools can help small business owners more effectively assess their competition.
1. SEO and content strategy.
AI tools help businesses optimize their online strategies by analyzing their competitors' search engine optimization (SEO) and content approaches to see how they measure up.
SEMRush uses keyword research and backlink analysis tools, while Moz offers free analysis tools that measure your website's health and uncover areas where your business's content could be improved. Leveraging these tools plus others like Ahrefs and MarketMuse help businesses gain insight into where their SEO strategy could be improved and pinpoint where competitors have the upper hand.
2. Social media monitoring.
Many tools are available to track competitors' social media activity, including the type of content they post, the hashtags they use, and their engagement and success rates.
BuzzSumo, for example, is effective at uncovering competitors' key metrics and identifying which social media strategies have succeeded or fallen short. Sprout Social offers side-by-side comparisons of how your socials measure up to competitors' share of voice, customer sentiment, and more. Crayon helps businesses get ahead by sharing competitor updates and messaging changes.
3. Product and service benchmarking.
AI benchmarking tools make it possible to uncover areas of improvement or differentiation for your product or service relative to your competitors.
Tools like Comparables.ai and platforms with benchmarking capabilities such as Similarweb enable small businesses to compare their product or services directly with their competitors’ offerings. Meanwhile, Watchful focuses on user performance compared to industry benchmarks.
4. Sentiment analysis.
Sentiment analysis tools use natural language processing to uncover positive and negative emotions behind customer feedback in reviews, social media posts, or surveys.
Tools like Brand24 can be useful for businesses that want to gauge public customer reactions to their competitors and identify those companies' weaknesses. For example, if a competitor launches a new product, sentiment analysis makes it possible to see how the market has received it in real time.
Other tools on the market, including ReviewTrackers and Permutable, can help provide similar competitive intelligence.
5. Technology and innovation scouting.
AI tools can provide insights to help your business stay on the lookout for opportunities for innovation.
Tools like Crunchbase can help to track new startups that may be making big strides in the industry, while CB Insights and Traction Technology can be effective for gaining market intelligence on emerging technologies.
Business owners can use this information to make strategic decisions for their operations, mitigate risk, identify growth opportunities, and pinpoint areas to surpass competitors in service or product quality.
[Read more: 6 Steps to Performing a Competitive Analysis and How It Can Improve Your Business]
Tips for leveraging AI in competitor research
If you're just getting started with AI tools for researching your competitors, Dohmen offered a few helpful tips to get the best results.
- Identify broad trends quickly, then spend your time digging deeper. Dohmen noted that generative AI platforms can be helpful for a preliminary "industry scan" of major players, as well as gleaning the general head and tailwinds your industry is facing. From there, he said, you can invest more time researching and going deeper into the context of those broad trends.
- Take a "safety first" approach. As AI technologies and the regulations surrounding them continue to evolve, Dohmen advised businesses to comply with internal and client policies around the use of tools like ChatGPT. Additionally, he recommends a "safety first" approach and not sharing any privileged or nonpublic information.
- Verify your results. Don't take AI results at face value; Dohmen said results should be verified before using them to make decisions. "We view the content and insights that we get [from AI] as a starting point to be refined by seasoned professionals," he said.
[Read more: AI Tools That Can Help You Start, Run, and Grow Your Small Business]
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