Competition reveals opportunities for improvement. The richer the available market intelligence, the more you can learn about your niche before starting your business or deciding what to change. Following your competitors, learning their strategy and tactics, and checking their updates allows you to study the market with minimum risks and make your product even better.
Competitor analysis generates useful and tangible results. As you create a competitive picture, you see the as-is situation on the paper (or rather a screen). Let’s take a look at only a few of the aspects where your competitors can come in handy. You will be able to:
…and many more, depending on the market you’re operating in.
But how do you start the analysis itself?
First and foremost, you should choose specific competitors to analyse. If your niche is quite narrow and you personally know the CEO of each of your competitors–perfect. But frequently there are so many companies that it is difficult to figure out which of them is the best option to compare. As you select competitors for analysis, you can pay attention to two main groups: direct and indirect.
Let’s take a closer look at both groups. How does each of them actually help your business?
Direct competitors are those who offer a very similar product to yours, in the same market and therefore try to satisfy customers’ goals with a similar means.
They can help you to figure out specific features you can develop on top of your current proposition, you can be inspired by their UX and Marketing strategy. Basically, they can be very similar to you. However, it’s important to figure out why you think they don’t satisfy all customers’ needs. What’s missing in their product? Do you have any idea how to make it better? Still, don’t forget to look at what they do really well and acknowledge it, without simply being a “me too” player. How do they engage their customers? Why do their clients stay with them?
Indirect competitors are those whose audience has the same goal, but an approach to satisfy this goal is different.
And they can also help you—you can find out some unusual techniques to resolve your customers’ pain points. Looking at indirect competitors is like searching for a solution outside the box–something unique, fresh, and unusual. Most likely, you won’t like to adopt their main features, but there may be something about their discourse, billing methods, or profile management that makes using their product especially pleasant. Try to look “between the lines” as well as directly at their (lines) features and see, what can breathe fresh air into your product?
We recommend taking 2-4 direct and 2-4 indirect competitors to create a comprehensive analysis. You can select companies of different ages and levels to track how the development in your niche occurs. Having selected the list of competitors to analyse, you can move on to the analysis itself. Let the fun begin!
There is a list of items you can go through while performing competitor analysis to make it truly comprehensive:
If you can see all of the selected competitors analysed side-by-side, in one row of a spreadsheet, for example, you immediately catch the main difference between them. Compare them not only to your product but also to one another. Do you think there is one leader among them? Why? Do you think they react to each other’s updates and how?
Let’s also discuss approaches you can use to perform analysis.
A comprehensive competitor analysis once compiled gives you a solid understanding of the market situation, as well as the ability to maneuver when adopting changes.
Where you can use the results of competitor analysis:
If you wish to access a comprehensive step-by-step guide on how to perform competitor analysis and how to group the found data, just leave your email and access it for free.
If you’re still not sure which competitors to select and how to extract maximum value for your company, do not hesitate to contact us. Fractional Teams can help you with the compilation of competitor analysis for your business.