In many ways, our success is defined by our competitors. You can be a $100M company and still be considered a small fish if your market share is dwarfed by that of your competitors. Not to mention the fact that the positioning of your product is defined entirely by how it stacks up to the competitive landscape. Are you a value option or a luxury alternative? Are you a more tried-and-true traditional player or a disruptive innovator?
Bottom line: competitors can tell you a lot about yourself.
Naturally, most organizations have their own beliefs about how they stack up to their competitors. But assumptions can often be wrong, which is why we can’t understate the value of investing regularly into actually researching your competitive landscape. Proper competitive research not only gives you insight into your brand’s position in the competitive landscape, it provides you a roadmap for adjusting your brand positioning and helps you anticipate how your competitors are going to react to changes in the market.
Competitive research is a massive umbrella that spans product, service, customer experience, brand, marketing, sales, and everything in between. When we conduct competitive audits, we focus on three areas of competitive research in particular:
- Marketing – the channels and strategies utilized by your competitors to engage with their audience
- Messaging – the language used by your competitors when talking about their products, services, and organization
- Brand Positioning – how your competitors’ offerings are perceived and differentiated in the minds of the marketplace
While our research doesn’t focus on how a client’s products or services actually compare to those of their competitors, it does help them understand how they are perceived in the minds of the larger landscape.
Let’s get down to it.
Setting the Stage: When to Conduct a Competitive Audit
Competitive research is a process, not a one-time exercise. Generally, our first inclination is to invest in competitive research only when our organization is about to experience a significant pivot or expansion (rebrands, M&A activity, product launches, entering a new market, etc.). But consider all of the factors completely out of your control that also impact your competitive positioning:
- The entry of new competitors into the market
- The consolidation, expansion, or liquidation of existing competitors
- Changes in consumer expectations
- The constant evolution of the digital and media landscapes
- Impact of technological innovation
- The economy
By revisiting your competitive research on an annual, biannual, or quarterly basis, you can ensure not only that you are able to maintain hold of your existing market share, but also that you can capitalize on the gaps and opportunities available to you.
Setting the Stage: Identifying Your Competitors
When performing a competitive analysis, it’s important to actually go through the process of making a list of your competitors. You likely already have a list in mind, but it’s critical you be wary of hidden competitors. Competition comes in many forms: from scrappy startups to brands trying to expand into your market to other markets developing ideas that make your product irrelevant.
It also comes from more nontraditional sources. As part of our competitive audit process, we examine search and paid competitors – the domains vying for the same keywords and online audiences that you are. Your digital competitors can reveal a lot about the efficacy of your messaging. If you find yourself competing with organizations that have nothing to do with your industry, it’s likely time to evaluate whether the language you’re using to describe yourself matches what your customers are searching for.
Depending on the complexity of your offerings, it’s likely that you’ll have a number of partial competitors – organizations that may overlap with some, but not all, of your products or services. It’s important you pay attention to what these companies are doing just as you would with competitors that mirror you completely. They may not do exactly what you do, but they’re still taking valuable customers away from you.
What We Evaluate in a Competitive Audit
Once you’ve identified your competitors, you can begin the gritty work of competitive research. When we perform a competitive audit, we research the following:
- Clarity of Message – Are their brand and unique selling proposition(s) consistent and effective across all communication?
- Design and User Experience – What is the visual experience provided across their digital and traditional communications?
- Channel Efficacy – How effective is their marketing across search, paid, social, email, referral, and offline channels?
- Reputation – How are they viewed, discussed, and rated by their customers? Their employees? The industry as a whole?
- Differentiators – What mediums, tools, messages, or audiences set them apart from the rest of the landscape?
By the time you’ve completed this process, you should have more than enough data to understand not only the standing of your competitors, but more importantly where you stack up in the competitive landscape. The final challenge lies in synthesizing this research and interpreting the data you’ve collected.
Interpreting the Data and Drawing Conclusions
While the research behind each of these points should be extensive, the final output should be easy to digest. There are a number of diagrams and tools you can use to help you interpret the data – from a double-axis grid, like the one used by software review site G2Crowd (see below), to a simple A-F grading scale. Just make certain your output is supported by your data. Otherwise, you’re back to relying on the same subjective assumptions we were trying to avoid in the first place.
Keep in mind: not only are there many forms of competitive research, but competitive research is itself a part of a larger brand research and synthesis process that includes industry research, user testing, customer and employee surveys, executive discovery sessions, culture audits, and a host of other primary and secondary research methods. The more context you have for interpreting the findings of your competitive research, the better your conclusions are going to be.