Understanding how to conduct a competitor analysis effectively can be daunting, especially when you’re new to the business world. The process often seems overwhelming due to the complexity of data collection and interpretation. Many find themselves questioning how rivals secure funding, whether expensive advertising efforts pay off, and the real reasons behind executive changes. These uncertainties can be quite frustrating.
When I first started working with competitor analysis, I faced similar challenges. It was a puzzling task that left me with more questions than answers. If you’re experiencing a similar struggle or don’t know where to begin, this guide will help you through each step of the competitive analysis process.
In this comprehensive article, I’ll introduce you to a unique competitor analysis framework devised by my team and me through extensive research. Additionally, I’ll outline ways to uncover valuable data, even when it’s not publicly accessible, giving you a competitive edge.
Demystifying Competitor Analysis
At its core, competitor analysis involves scrutinizing other businesses in your industry, their products, and market strategies. This evaluation provides insights that highlight potential opportunities and threats while aiding in refining your own business tactics. To ensure your analysis is impactful, follow these key steps:
- Select the right competitors to scrutinize
- Identify critical aspects of their business that warrant analysis
- Determine reliable data sources
- Learn how to use these insights to enhance your business
Who Stands to Gain from a Competitor Analysis Framework?
This framework is beneficial for various stakeholders, including entrepreneurs, business owners, startup founders, product managers, and marketers. It addresses key metrics relevant to businesses, products, and marketing—with particular depth in the marketing component. Feel free to skip sections that don’t apply or assign different tasks to relevant teams if possible.
Whether you’re marketing a mature product or merely developing an idea, this framework can guide you. Most analysis tools mentioned are either freemium or offer free trials, meaning your primary investment will be your time.
Why is Competitor Analysis Crucial?
When executed well, competitor analysis yields quantitative and qualitative data that support informed business decisions and strategy development. It helps to:
- Shape and validate your Unique Value Proposition
- Prioritize product development by focusing on features valued by customers
- Enhance your product by addressing competitors’ weaknesses
- Benchmark your growth against competitors’ strengths
- Identify under-served market segments
- Create a novel product category by bridging gaps in existing offerings
Identifying Your Competitors: More Than Industry Leaders
It’s tempting to only consider major industry players as competitors, but this approach may not yield comprehensive insights. Including a mix of competitors—both large and small, direct and indirect—is key to obtaining a thorough understanding of the competitive landscape.
Explore search engines to broaden your list of competitors. Investigating the top 50 product-related search results can reveal overlooked companies. For example, if launching a vacation rental service to rival AirBnB, your competitor categories may include:
| Competitor | Direct | Different solution | Different customer |
| AirBnB | Yes | ||
| HomeAway | Yes | ||
| Homestay | Yes | ||
| Booking.com | Yes | ||
| Hotels.com | Yes | ||
| OneFineStay | Yes |
Upon reviewing your competitor list, begin your in-depth analysis. Feel free to refer to this Google Sheets template that I’ve crafted to assist you.
Components of a Competitor Analysis Framework
- Business & Company Metrics
- Company overview
- Funding
- Revenue & customers
- Product Features
- Main features
- Pricing
- Perks
- Technology
- Customer Insights
- Share of Voice
- Sentiment analysis
- Key topics
- Geographical reach
- Social media usage
- Marketing Strategies
- SEO
- Social media tactics
- Advertising
- Influencers and partnerships
- Content marketing
- Customer acquisition methods
- Sales approaches
- Customer service
- Unique strengths
Each section will be thoroughly explained in subsequent parts of the discussion. You can also use the detailed competitor analysis template provided to follow along and organize your findings in a structured way.
1. Understanding Business & Company Metrics
1.1. Company Overview
Start by gathering fundamental information about your competitors, such as their founding year, key personnel, office locations, and employee count. Sources like competitors’ company websites and their LinkedIn profiles provide valuable data. For leading figures, office details, and founding dates, Crunchbase is a helpful resource.
Explore competitors’ job postings, found on their websites and platforms like Glassdoor and Indeed, to glean insights into team expansion and future business directions. Are they hiring sales representatives or developers with specific skills? This information combined with industry knowledge reveals potential tactical shifts.
1.2. Funding
Understanding your competitors’ funding provides insight into the financial landscape you might expect when seeking capital. It also helps identify venture capitalists they haven’t worked with, presenting opportunities for partnership. Crunchbase is again a reliable source for this information.
1.3. Revenue & Customers
While precise figures on revenue and customer volume may be elusive, rough estimates can often be found through platforms like Owler or through strategic Google searches for press releases and interviews. To enhance accuracy, setting up alerts for events involving key competitors can lead to insights shared during interviews or conference panels.
For estimated calculations, consider using the formula popularized by Jason Lemkin: multiply the number of employees by $150,000 for well-funded companies. This provides a rough revenue estimate you can compare against your own company’s growth trajectory.
2. Product Evaluation
Analyzing competitors’ products begins with understanding their technology, key features, pricing, and any additional perks or services. What is their core selling proposition? What technology stack supports their products?
2.1. Product Features Analysis
Categorize and analyze product features, keeping them well-documented in your spreadsheet. Assess pricing structures and contact their sales teams if necessary to fill in gaps where info isn’t publicly available.
2.2. Pricing Structure
Review pricing strategies and identify opportunities not fully addressed by competitors. Look for gaps in market segments, such as plans for startups or enterprises, and take hints for A/B testing strategies for your offerings.
2.3. Additional Perks
Investigate whether competitors offer free trials, freemium versions, or perks like additional services. These offerings can provide inspiration for enhancing your own customer value proposition.
2.4. Technology Stack
The technology your competitors use can reveal their software ecosystem and third-party integrations. Utilize tools like BuiltWith to explore technologies in use. A more convenient option might be the browser extension What Runs, which provides quick tech stack insights directly from your browser.
Continuously revisit competitors’ job postings to monitor changes in technology requirements and business directions. Platforms like LinkedIn and job boards offer a wealth of information about the skills companies are seeking.
3. Customer Insights & Awareness
Assess customer perception of competitors by analyzing what clients say about them. Key insights include awareness levels, sentiment, customer reviews, and geographical reach.
3.1. Share of Voice
Although it’s challenging to measure precise market share, Share of Voice is a valuable metric indicating the extent of online mentions compared to competitors. Set up monitoring alerts using tools like Awario to track brand mentions over time.
3.2. Sentiment Analysis
Sentiment analysis helps identify positives and negatives in customer feedback, offering benchmarks against which you can compare your brand’s reception. Understanding sentiment shifts provides insights into customer priorities, fostering improved product development.
3.3. Identifying Key Topics
Using topic clouds, delineate the themes prevalent in customer discussions about competitors’ products. These insights guide product development and help address customer pain points.
3.4. Geographical Insights
Analyzing the geographic distribution of competitors’ mentions reveals market focus areas and potential expansion opportunities. Monitor changes over time to detect emerging markets and capitalize on potential opportunities.
3.5. Social Media Usage
Explore your competitors’ social media engagement to identify popular platforms and underutilized channels for potential expansion. Use findings to enhance your social media marketing strategies.
4. Delving into Marketing Strategies
4.1. SEO Tactics
SEO analysis involves studying keywords competitors rank for and examining their backlink profiles. Such insight helps refine your SEO strategy by identifying high-impact keywords and desirable backlink sources. Tools like SEO PowerSuite can assist in this exploration.
4.2. Social Media Strategy
Employ tools like Rival IQ to evaluate competitors’ social media engagements. This insight benchmarks your strategy and identifies optimal post timing for audience interaction.
4.3. Advertising Insights
Analyze competitors’ ad strategies using SimilarWeb to identify running ads and target keywords. For specific platforms like Facebook, explore ads through the platform’s Ad Library.
4.4. Engaging Influencers and Partners
Evaluate competitors’ influencer partnerships using monitoring alerts. Identifying influencers and partner organizations provides potential additions to your marketing strategy.
4.5. Evaluating Content Marketing
Tools like BuzzSumo can highlight well-shared posts and effective content strategies. Use these insights to guide content creation that resonates with target audiences.
4.6. Customer Acquisition Methods
Explore customer acquisition strategies such as referral and affiliate programs. Assess participation in industry conferences to determine competitors’ customer engagement approaches.
4.7. Analyzing Sales Strategies
Test competitors’ sales processes through demos and interactions. Consider requirements and response times to pinpoint strengths and weaknesses.
4.8. Evaluating Customer Service
Analyze competitors’ customer support offerings and channels. High-quality service can highlight your commitment to superior customer care within industry standards.
4.9. Understanding Unique Strengths
Identify factors giving competitors distinctive advantages, such as influential team members or unique services. Recognize their strengths and consider how leveraging similar ideas could make your business stand out.
Taking Action: What’s Next?
Upon completing the competitor analysis, you’ll gain a deep understanding of the competitive landscape and gather actionable insights to enhance your offerings. Consider mapping competitors on a Strategy Canvas, as outlined in the book Blue Ocean Strategy, to visualize their strategic positions.
Blue Ocean Strategy furthers strategizing through the Eliminate-Reduce-Raise-Create Grid:
- Eliminate superfluous features to reduce costs and streamline offerings
- Reduce factors below industry norms, such as pricing strategies
- Raise factors needed by customers above industry averages
- Create unique attributes distinguishing your product from competitors
Conclusion
Remember, the goal of competitor analysis isn’t imitation but understanding your market position and identifying unique opportunities for differentiation. Focusing on the customer and unmet needs is essential to outshine the competition, and competitor analysis is your tool for discovering how to serve your customers better.
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