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 because they didn’t take 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.
What is competitive research?
Competitive research identifies your competitors and evaluates their strengths and weaknesses. By looking at your biggest competitors, you can see how your products and services compare and possible threats facing your business. The biggest benefits of doing competitive research include:
- Understanding your market: Competitive research can reveal trends in the marketplace that you might have missed otherwise. The ability to identify and predict trends is a huge asset for any business and helps improve the value proposition for your customers.
- 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 messaging.
- 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.
5 steps to conducting competitive research
Let's look at five steps you can take to get started on competitive research.
Identify direct vs. indirect competitors
There are two main types of competitors to identify:
- 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 offer a slightly different solution.
For example, Apple Music would be considered a direct competitor of the audio-streaming service Spotify. They offer very similar products, though they target slightly different customer bases. On the other hand, YouTube could be considered an indirect competitor because a Spotify user might decide to pull up a music video on YouTube rather than opening Spotify. The product isn't the same, but they're competing for the same audience in the streaming and podcasting markets.
Most businesses 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.
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 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.
Many companies lose business to competitors they have never even heard of because they didn’t take the time to do competitive research.
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 with them so you can see what their product looks like and what the experience is like from a customer’s perspective.
Build a competitor profile template
You’ll get the best insights from your research by building a profile for each competitor using a spreadsheet. For each competitor, track their company name, website, and the following information:
- Pricing: What do they charge? Do they use a freemium, tiered pricing, or flat rates?
- Positioning: How do they describe themselves? What’s their value proposition?
- Marketing channels: Which social media platforms, email, paid ads, and content channels do they use?
- Reviews: What are customers saying on Google, social media, and the Better Business Bureau? Take note of any positive and negative patterns that keep showing up.
- Key differentiators: What do they do uniquely well, and where do they fall short?
Dividing your spreadsheet into direct and indirect competitor columns will help you spot patterns across each group. Update each profile on a quarterly basis so your research stays current.
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.
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.
Turn insights into action
Competitive research is only useful when it changes the way your business operates. Let’s look at two practical ways to put this information to work immediately.
Build a messaging map
A messaging map helps your marketing and sales teams communicate your competitive advantages to your audience. Using the competitor profiles you’ve built, identify the two or three areas where you clearly outperform the competition. Then craft specific language around those differentiators that addresses why a customer might choose you over a rival. This becomes the foundation for your website copy and sales pitches.
Maintain a win/loss list
Ask your sales team to track which competitor you lost a deal to and why. Over time, patterns will emerge. If you’re consistently losing to one competitor on price, that’s a signal to revisit your pricing strategy. If you’re winning because of customer support, that’s something to double down on in your marketing.
Keep in mind that competitive research is never a “one-and-done” event since other businesses will continue to change and adapt their own offerings. So ongoing monitoring is necessary to ensure you stay competitive in the marketplace.
Tools and resources for competitive research
Software and technology make it easier than ever to conduct competitive research. Here are five 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, key word research, competitive research, and more. Semrush can help you discover new competitors, find their best-used key words, and analyze their ad copy. They have flexible pricing plans depending on your business needs.
- 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.
- Ahrefs: This comprehensive SEO software is one of the best tools for content gap analysis. It helps you find key words and topics your competitors rank for that you don’t. Ahrefs is especially useful for understanding a competitor’s backlink profile and overall organic search strategy.
- Similarweb: Similarweb provides detailed website traffic and audience insights for any domain. You can see how much traffic a competitor’s site receives, where that traffic comes from, what their top-performing pages are, and how your own site compares. It’s particularly useful for benchmarking digital performance.
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