Competitive research is a crucial part of any good marketing and business plan. Many companies lose 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 helps you better position your company and product or service in the market.
[Read more: 3 Easy Steps to Research Your Startup Business Idea]
What is competitive research?
Competitive research identifies your competitors, evaluates their strengths and weaknesses, and assesses the strengths and weaknesses of their products and services. By looking at your biggest competitors, you can see how your products and services compare and which threats they pose to your business. A competitive analysis also helps you identify industry trends you may be missing.
Four benefits to doing competitive research include:
- 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 the value proposition for customers. This benefit, by itself, is why you should constantly research your competition.
- Improving your marketing: Your customers care about how your product or service is going to make their lives better. If they're switching to one of your competitors, it's probably because that company either offers a better product or does a better job of explaining the benefits. Competitive research helps you understand why customers buy from you or your competitors and how you can improve your marketing.
- 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's a segment of the population that is being underserved. This gap can put your business in a unique position to reach those customers.
- Planning for the future: The most important byproduct of competitive research is that it helps 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.
[Read more: A Guide to Conducting Market Research]
5 steps to conducting competitive research
Let's look at five steps you can take to get started on researching your competition.
Identify your main competitors
The first step is to identify who your top competitors are, and there are two main types to identify: direct and indirect competitors.
Direct competitors target the same customer base you’re targeting or 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.
Most business professionals focus on their direct competitors, but researching your indirect competitors provides a few benefits. First, it offers new growth opportunities for your business. But it could also highlight potential threats to your business that you might otherwise be unaware of. You can find your top competitors by searching Google, checking websites like Crunchbase or Product Hunt, or asking your potential customers what services they're using.
The best way to gather information about your competitors is to act like one of their customers.
Analyze competitors' strengths and weaknesses
Once you've identified your main competitors, you want to look at their website, the content they're 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. Consider the following questions:
- What's the user experience like on their website? Is it easy to navigate?
- Do you clearly understand the products or services they offer?
- How often do they blog, and, most importantly, is their content good?
- What topics do they blog about frequently?
- Which social platforms do they actively use 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 want to pay close attention to anything they are doing well that you aren’t currently doing. This helps give you a better understanding of where you should focus your attention and resources.
[Read more: SWOT Analysis: What It Is and How to Do It]
Gather information
The best way to gather information about your competitors is to act like one of their customers. Sign up for their email list so you get an idea of how they communicate.
You can 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 might also shop from them so you can see what their product looks like and what the experience is like from a customer’s perspective.
[Read more: How to Conduct Market Research to Better Understand Your Customers]
Track your findings
Make sure you track your findings on a spreadsheet, since this will help with ongoing monitoring. This isn't a complicated process: You just need to track what they are doing over time so 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
- Website
- Social media sites
- Unique features
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 have Google reviews, read them as well. It's a good idea to understand not only the good things that your competitors are doing but the bad things too. Include Better Business Bureau ratings 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 is an opportunity to learn if a lot of people are interested in it. Any negative feedback helps you identify areas where you can improve your product or service.
How to apply your research findings to your strategy
Now that you've noted 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 business results.
Your competitive research should reveal at least one area in which your business can improve. This can 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 you stay competitive in the marketplace.
[Read more: How to Conduct a Market Analysis for Your Business]
Tools and resources for competitive research
Software and technology make it easier than ever to conduct competitive research. Here are four tools you should consider using to conduct your competitive research:
- Semrush: This is one of the best competitive research tools on the market. It contains over 30 tools that can track things like search engine optimization, pay-per-click advertising, keyword research, competitive research, and more. Semrush can help you discover new competitors, find their best-used keywords, and analyze their ad copy. They have flexible pricing plans depending on your business needs.
- SpyFu: This search analytics tool reveals the keywords websites buy on Google. Once you've identified your biggest competitors, you can track keywords they've purchased. Plus, you can track keywords they are ranking for and find the content and backlinks that helped improve their rank.
- BuzzSumo: BuzzSumo lets you see how your content matches your competitors' content. You can see which content is shared more frequently on social media compared to others, and you can schedule alerts on your competitors’ content, which makes it easier to continue tracking them.
- Owletter: Owletter tracks and analyzes emails sent from a website. You can track your competitors' email marketing and see what is and isn't working for them. To get started, you’ll need to join your competitors' email list. Then, every time you receive an email, Owletter takes a screenshot, analyzes it, and alerts you to any useful information.
[Read more: 5 Competitive Analysis Templates to Help Inform Your Business as It Grows]
Takeaways
Competitive research can seem daunting, but it's an essential part of running a successful business. When you incorporate the right tools into your research, you may find that staying ahead of your competitors is not as difficult as you imagined.
Understanding your competitors is just as important as understanding your customers. Your competitors can teach you valuable lessons, and it’s important to regularly monitor their online activity. Doing so strengthens your business and improves your value for your customers.
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