What is Competitive Research?
Competitive research includes identifying your competitors, assessing their strengths and weaknesses, and evaluating their products and services. You can see how your products and services compare to those of your largest competitors and what kind of threat they offer to your business. It also assists you in identifying industry trends that you may have been missing.
Competitive Research will benefit your business by providing insights into the pricing of products, market share, research and development which will help you in initiating a Unique Selling Proposition (USP) of your business, offering a competitive price, improving the owned products and services. Competitive analysis will also help in new product launches, identifying the gaps in R&D and hiring, making new marketing strategies to gain market share, and unveiling the upcoming trends in the industry.
“Good competitive research could put your business in a unique position to reach customers who are being underserved”1
There are some steps that one should follow to conduct competitive research:
- Identify main competitors
- Analyse and evaluate competitors online/offline presence
- Gathering data and establishing a framework
- Ongoing Monitoring
- Secret Shopping
- Identify areas for improvement
- Tools for competitive research
The first decision you should make about competitive research is whether to conduct it internally or employ a professional business or consultant. One of the advantages of hiring a consultant is that they may have more intelligence and experience than you do and can suggest better solutions. On the other hand, performing the research in-house is that you will have a better understanding of the business and the competitive elements you want to monitor. You'd also have a steady flow of data in the company, and managers would be more likely to listen to an insider than an outsider. The problem is that obtaining competitive information is a skill that you would have to either develop in-house or hire from outside sources. Two heads are better than one which suggests if you integrate in-house research and also hire a professional consultant for competitive research is the elite option. According to this analysis, you will get the best of both worlds with all the perspectives covered.
Steps on how to conduct competitive research:
1. Identify main competitors: The most obvious approach to achieve this is to conduct a web search/offline search for your product or service category and see what the results are. You can also look at third-party websites such as Crunchbase and Product Hunt to know about who your actual competitors are and most importantly don’t miss the obvious source of information i.e. customers. Whenever you get a new customer ask them why did they leave the previous supplier and also do the same when you lose customers plus identify what did they prefer about your competitor. You can come across competition you weren't aware of before. Moreover, divide your competitors into two categories: “direct” and “indirect”.
- Direct competitors are companies who provide a product or service that is a close substitute for yours and operate in the same geographic area as you.
- An indirect competitor, on the other hand, offers products that aren't identical but could meet the same consumer need or address the same problem.
2. Analyze and evaluate competitors’ online/offline presence: Once you have listed your main competitors, you should look at their websites, social media handles, the type of content they are publishing, what are the customer reviews and for tracking them offline you should look at the trade associations, advocacy groups. This all will help in categorising the difference between what all they are doing and you are not doing. This will assist you in determining where you should concentrate your attention and resources.
3. Gathering data and establishing a framework: Acting like one of your competitors' customers is the most effective technique to obtain information about them. For example, subscribe to their email list to get a sense of how they communicate. Also, pay attention to how they communicate with their customers on their blogs and social media profiles. Prepare a framework of the competitors' data which can include:
- URL of their website
- Strengths, Weakness, Threats
Through this competitive assessment, you may find other aspects of your competition such as their market share, revenue, strategies, etc.
4. Ongoing Monitoring: Make a spreadsheet to keep track of your competitors' findings; this will aid in ongoing monitoring. This isn't a difficult process; all you have to do is maintain a watch of what they're doing overtime to monitor how their pricing, marketing, and promotional activities, any significant achievement vary.
5. Secret Shopping: It is crucial to know how your competitors follow through with their promises and for that, you should have to experience it like a customer. Shop them yourself and get the same experience as a customer, this will play a major role in finding the first-hand difference between your and competitors’ offerings.
6. Identify areas for improvement: Now that you've identified some of the most significant distinctions between you and your competitors, consider how you might apply this knowledge to improve your business performance. At the very least, your competitive research should indicate one area where your company could improve. This can assist you in better understanding how to interact with your consumers and followers. Remember that competitive research is never a "one-and-done" activity. Ongoing monitoring is required to guarantee that you remain competitive in the marketplace, such as observing how competitors evolve.
7. Tools for competitive research: Conducting competitive research is now easier than ever because of advancements in software and technology. Depending on whether your competitors are publicly listed or privately held, there is an increasing number of competitive research tools available. These resources also vary in price, ranging from free Google Alerts and Twitter feeds to thousands-of-dollar market research papers. Finally, you must analyse your competitive research requirements against the expenses of specific technologies and resources. Some competitive research tools are SEMrush, Spyfu, etc.
Competitive research may appear intimidating at first, but it is an important component of running a successful company. When you use the correct tools in your research you might realise that it isn't as difficult as you thought. Understanding your competition is, in some ways, just as crucial as understanding your customers. Whether you hire an outside consultant or have competitive research done in-house, your competitors have great lessons to offer you, and it's critical to keep an eye on their activities regularly. This will enhance your company and increase the value you provide to your customers.