In a previous post, we talked about competitive intelligence and its benefits, strategy, as well as examples of information that can be analyzed to yield insights. One component of competitive intelligence is having a competitor analysis template to inform your efforts. And we have one for you here!
A deep level of intelligence on your competitors is necessary to gauge your standing in the market. Whether you are just starting out in a new environment or at the top of your game, regular and frequent competitor analysis can help your business thrive longer.
What is Competitor Analysis?
Competitor analysis is an investigation into competing businesses that can limit your entry or expansion in the market by offering similar or substitute commodities to your target consumer base. Companies conduct competitor analyses to understand who their competitors are, the source of their strength, and their weakness. With this knowledge they can maneuver and increase their share of the market – or change strategy.
If you are not performing regular competitor analyses:
- You could be missing transformative opportunities or taking unnecessary losses.
- You might not be aware of the fundamental differences between your product and others in the market, which is oftentimes the main influence over the purchasing decision.
- And you might also be missing some important lessons on strategy that can be discovered by simply observing the activities of your competitors.
Regular and frequent competitor analysis can help you identify your product’s true unique value proposition. It often turns out that what producers set out to sell has little to no utility to the consumers; however, within all that mess, is the “it” attribute which they can uncover and “pivot” to give consumers what they want, with tremendous success. Here, examples are hardly necessary, but look at how Avon was started, or Colgate, Flickr (and contrast with Instagram), Twitter, Wrigley, and many others.
Competitor analysis can change your life. Stay tuned!
How to Conduct Competitor Analysis
If the prospect of discovering something new and exploitable about your competitors gets you excited, we are going to show you how to conduct a comprehensive competitor analysis in six definite steps:
- Identify your competitors.
- Review their product.
- Assess their marketing strategy.
- Uncover customer sentiment.
- Perform competitive market research.
- Bring it all together.
Research has revealed that businesses are becoming more conscious of the competition. It wasn’t always like this. Here are some statistics:
- In a 2020 report by Crayon, out of 1,000 professionals, 90% said their industry was becoming more competitive. Forty-eight percent said it was “much more” competitive.
- According to McKinsey & Company, during the pandemic 36% and 33% of consumers in the US have tried a different brand or retailer respectively, and a great majority intend to continue with the new brand or retailer.
Preparation: Get the Proper Tools
Before you begin, check your toolbox to ensure that whatever you need will be an arm’s length away. For comprehensive competitor analysis, you need tools that can:
- provide real-time view of social and media analytics,
- mine unstructured data from a variety of sources,
- measure the functionality of various online properties such as website speed, app performance, and user experience,
- integrate with other competitor analysis tools, and
- provide a neat environment for analysis, including a well-designed dashboard and ability to collaborate.
It’s basically a complete business intelligence capture that offers insight for all stakeholders:
NetBase Quid allows you to collect, integrate, and analyze data from various sources on a single platform, so be sure to check in for a demo.
With that, let’s dive in.
1. Identify Your Competitors
Well, if this is a competitor analysis, who is your competitor? A competitor is anyone who can fulfill the same needs of your target customer. In other words, they limit your entry or expansion in the market because they offer similar or substitute commodities.
It gets tricky. Say, you are a pizza shop and your neighbor across the street also sells pizza, isn’t that your competition? What if you are a margarine manufacturer in the same market with a butter manufacturer? In one case, you solve the same problems using the same solutions, in the other, you address the same needs but with different products. This is direct and indirect competition respectively.
When doing competitor analysis, you want your focus on direct competitors. You might ask, if they are selling butter which can be used in place of margarine, shouldn’t you go after them too? But the thing is, if consumers are increasingly using butter where they used margarine before, it’s a margarine problem. It signals that margarine is falling out of favor and the solution is to change the perspective of the consumers – or pivot to selling margarine!
The numbers alone don’t tell us much, but we can dig into the posts and conversations powering mentions to see what the driving force is behind them.
The idea is to approach the problem in manageable bits. You can deal with a competitor, but ultimately, the heart of the consumer wants what it wants. If you identify direct competitors, you can investigate them more closely with better results. That said, you should remain vigilant monitoring the market activities through the broader view of competitive intelligence. Those indirect competitors might creep up on you any time, so your competitor analysis template needs to keep that in mind.
2. Review Their Products
If you are worried about them, your competitor might be onto something. What makes it preferable to customers? Along the way, you may also discover what’s so-so about it and hopefully, what they are getting totally wrong.
Identify the specific product or categories of products that are in direct competition with yours. Find them and study them to reveal their attributes. Yes, for once buy from your competitor. What’s the price and does it seem to offer any competitive advantage? If it does, for whatever reason, make a note of it in your competitor analysis template.
Compare the product quality to yours, objectively of course. This could explain a couple of things: Pricing, production, and popularity. Consider also, the service delivery. This reflects their attitude towards the customer. Get a complete picture by noting all product and service delivery attributes that apply to your target market including aesthetics, size, design, features, and customer service. Confirm via your analytics, of course and add that to your competitor analysis template as well:
3. Assess their Marketing Strategy
Next, as part of our competitor analysis template, we are looking at how competitors get to the consumer and turn them into a customer. This is marketing, including advertising, PR, online marketing, and field marketing activities. Here you want to discover their message.
What do they say to the audience that makes them buy?
The internet is the first place to look, even for discovery (Step I). Businesses have realized the power of having an online presence and they go all out sharing the minutest details. You can take advantage of this to piece together what their marketing strategy is, or at least make a good sketch of it. Start with the business website and app if there is one. Then look at social media, search engine results, and ads.
If they have an offline marketing campaign, be sure to look at that too – although it is likely they will report it all on the internet. And, crucially, in your competitor analysis template, compare how consumers are talking about each. The words they use matter:
All these avenues will reveal their message from which you can infer the marketing strategy. This is important as it helps you predict their moves more accurately, placing yourself in a position where you can answer their attacks or launch your own on them.
4. Uncover Customer Sentiment
Now let us visit the shot-callers: The customers. We want to find the insights hidden beneath customer sentiment. As you know, customer sentiment is a measure of the customer’s attitude towards a brand.
By uncovering their customers’ feelings, we can better explain the competitor’s successes and failures and account for them in our competitor analysis template. We may even understand the product more comprehensively and get a fuller picture of the marketing strategy through its observable effects. Ultimately, we get to know who it is that we are selling to and why they like the things that they like.
You can discover customer sentiments through online reviews, direct interviews, and social intelligence. Social intelligence is particularly effective and key to our competitor analysis template, of course. Why, there are billions of people on social media, hundreds of millions of consumers sharing their views on different topics, and the information is often given freely. Besides, there are great social listening tools that can monitor, discover, and analyze this data in record time.
Customer sentiment analysis is the step that can lead you on paths you never knew existed, let alone considered. By combining the problems of different sets of competitor customers, you may end up with a solution that no one in the market dreamed of.
And that is what SCIP is saying when it tells us that 40% of the Fortune 500 will not survive the next 10 years, having been replaced by companies that don’t even exist today. Because companies can go – they go all the time, but the people remain.
David H. McConnell, founder of Avon, was giving away beauty products and selling books before he realized they came for the perfume. William Wrigley, Jr. went to Chicago a soap seller in 1891, became a chewing gum manufacturer by the end of ’93.
That’s how they did it.
5. Perform Competitive Market Research
The competitive market research part of your competitor analysis template is aimed at helping you determine how your business compares with competitors. Your product and service delivery are now toe-to-toe with their peers. Here is a checklist for you:
- Demand. Find out if people want the product or service you are offering. If not, get a proper explanation for this. Is it something about your product or a general aversion to that product category?
- Market size: If there is demand for it, determine how large the field is. It is not enough that people want your product, enough people must want it to sustain the business.
- Market saturation: This refers to how well-supplied the market is. Maybe there are enough sellers of what you are offering. Or you believe you can provide a better solution. You have to find out.
- Tools, techniques, and technologies: You want to know what other businesses are using in the production of these commodities. Do they have better tools or methods or technology? How are they sourcing their intel? You can be sure next generation AI-powered analytics plays a role!
- Other factors: There are other factors which may influence the success of your product in the market. These include location and proximity, relative pricing, as well as purchasing power of the target customers.
6. Bring It All Together
You have your photos, your sticky notes, and multi-color threads pinned in place – that handy competitor analysis template we’ve created here. Now it’s time to step back and study your crazy wall. What does it all mean?
After meticulously going through every step, there may still be insights you can’t discover until you look at the whole picture. You can get better explanations of what’s going on in some steps if you take a holistic view of the process. Differences in production efficiency may come to be explained during the competitive market research. Discoveries in the use of tools and methods may help explain previously unrecognized aspects of consumer behavior. All this is important for your analysis.
Therefore, you want to integrate your various datasets on a single platform where they can be analyzed together for a full view of your competitor analysis template big picture. If you are using NetBase Quid, you can do this through the Intelligence Connector. The feature allows you to pull data from the platform automatically and continuously. This makes it possible to connect data from the different tools used in your competitor analysis, synthesize it, and share with departments across the organization.
This is what it takes to understand your competitor so intimately that you see them as you see cars on the road. You know what lane they are taking, you know how far behind or ahead of you they are, and the speed at which they are going. At this point, you make decisions confidently and move steadily amidst potential distractions.
This is a state you can attain, step-by-step.
If you want to see how NetBase Quid improves this whole process with automated discovery, monitoring, and data-crunching, reach out for a demo today and we’ll show you!