Competitive research is the foundation for a strong marketing strategy. If you know what the competition is offering, you have a better chance of creating a strong unique value proposition and providing services that outclass others in your niche.
To know what the competition is doing well, you have to know who you’re competing against first—and which competitors are most likely to capture your audience. In a crowded market, like online retail or a major city, this can be difficult, but with the right strategies, you can know which brands your business competes against.
1. Know the Different Types of Competitors
Not every other business in your market is directly competing for your audience. Some may be targeting different niches, while others may be indirect competitors.
Before you can start researching the competition, you’ll need to know the different types of competitors you should look for:
- Direct competition is in your niche, targets the same audience as your brand, and provides goods or services similar to yours. For brick-and-mortar retailers, this will be all retailers offering similar products in the area. For online retailers, this may be all brands that offer similar products and seem to target the same audience you’re after. These brands may appear in searches for keywords you’re targeting.
- Indirect competition markets towards your target audience, but they don’t provide exactly the same services you offer. Depending on your niche and market, indirect competition may be large retailers like Amazon that can undercut your profits by selling the same goods for cheaper prices.
- Substitute competitors don’t provide the same goods as your business, but the products they offer may work as a substitute. For example, fast-food restaurants and food trucks don’t offer the same products, but they both offer food and may compete for the same audience around lunch hour.
The most important of these three will be your direct competition, as customers will compare and contrast their marketing and branding with your business. Your direct competitors are also the most likely to capture potential customers in your target audience before you do.
However, you can’t ignore your indirect and substitute competitors. They may not be directly competing for your audience, but you still need to offer products and services that encourage customers to choose your business over the indirect competition.
2. Search Marketing
Businesses that rely heavily on online shoppers often start their market research with search research.
Search marketing research tools like SEMRush and SpyFu let you see what your audience is searching for. They also give you information about your current performance, including traffic and search ranking position. You can also use these tools to see which search terms your competition is ranking for, and where they’re ranked.
These tools provide information on both your organic and paid competition, allowing you to investigate competitors who are using content marketing strategies and PPC ad strategies alike.
In some cases, you don’t even need special tools. Use Google to search the terms you’re trying to target with your content or PPC strategy to see who else is in your niche. You can also search your own site with the Google search operator “related:” to bring up sites that Google considers similar to yours—a quick way to see which sites Google’s algorithm considers to be your competition.
3. Market Research
You can also use more general market research strategies to pick out key competitors in your niche.
For example, you can ask your sales team about which businesses get mentioned in conversations with customers. Industry publications and trade associations can provide hints, depending on the industry you’re in.
You can also invest in market research reports and specialized market research tools. These resources will help you fill in the gaps in your research that other methods can’t cover. They will also give you hard data to work with, unlike other methods which can provide more qualitative information.
4. Map the Competition
If you rely on in-person sales, you’ll need to complement online research with research about your local market. You’ll want to think about how you can compete with other stores and brands that serve customers in your area.
Competition mapping is a great strategy for businesses that are competing with brands in a certain geographic region.
With a mapping tool, you can quickly visualize which businesses are competing with your brand. The tool will help you see which areas they’re serving, where they’re doing well, and where they may be falling behind. This approach can show you how your local marketing and sales strategy could be improved, as well as where your competition may be vulnerable.
5. Ask Your Customers
You can also ask your customers directly. Email surveys, follow-up questionnaires, or even questions from your sales team can tell you who your customers think your competitors are.
Typically, a business will ask customers about the quality of their service. Then they’ll ask about the competition’s service, as well as businesses that the customer considers to be the competition in a particular area or niche.
Their responses will let you know what your customers think about your service and who they might be considering if they become dissatisfied.
6. Social Listening and Social Media Analysis
You can use social listening tools to see how people talk about your brand on social media. Analyzing posts can give you an idea of how people feel about your brand and the words they associate with your business. You can also use these tools to determine which brands social media users consider to be your competition—and how social media users feel about those businesses.
These tools are a great way to quickly get a sense of your audience’s pain points or marketing oversights your competition may have.
Tools like Google Alerts provide similar information, but they listen for mentions of your brand across the web. That way you know when your business’s name appears on new web pages, blogs, and other online content, and you can check out the context.
Using Market Research to Identify Top Competition
With these strategies, you can identify which businesses are competing with you, and which of those competitors are the most important for your business to focus on.
For businesses that primarily market to audiences online, search marketing and social listening can be effective strategies. For businesses that rely on in-person sales, competition mapping and customer surveys may be better. But no matter your situation or your industry, the only way you can be sure you’re responding to the market is to know who else is in it with you.