Know Your Competition
Do You Know Who You’re Up Against?
There’s a lot of truth to the saying ‘keep your friends close but your enemies closer’, especially when we’re talking business, or any place where there’s competition present. Therefore, if you really want to take your product to the next level, take a look at what your competitors are doing right, and what they’re doing wrong.
It’s easy to think ‘competitor analysis’ is just a fancy word for ‘stalking’, but it’s a known fact that big shot companies do the same thing too; find out what the other company’s doing so we could come up with something even more impressive and effective.
Besides, you don’t want to end up launching your product only to realize that there could’ve been a better opportunity somewhere else. Thus, if you want to avoid reaching for your wallet too often and boost your product’s chances of success, you’ll need to get on Google and fish out your competition.
What Kind of Competition’s Out There?
Here you are staring at your computer screen with the Google homepage staring right back at you; you’re probably wondering “what exactly am I looking for here?”. Good question. This leads us to the first topic of this blog; identifying your competition.
Your competitors are divided into two categories, both of which you should keep on your radar at all times and are important to your analysis: the direct competitors and indirect competitors.
The Direct Competitors are companies whose value proposition, product as well as target audience are closely similar to yours. The Indirect Competitors are the ones whose products aren’t exactly the same as yours but offer the same solution you’re offering. They could also be companies who have different value propositions but target the same audience as yours.
While you will most likely spend time comparing your product to the direct competitors’, you should never ignore your indirect competitors. They may not share the same solutions, ideas or values as yours, but there’s always a chance that they change positions and become your direct competitors at any moment. In addition, sometimes you’ll notice a certain tool or solution the indirect competitor is using that isn’t working for them but could solve a problem for you.
How to Conduct Competitor Analysis Step-By-Step
Now that you know what you’re looking for, you can stop staring at the search box and get to work on your competitor analysis. Here’s how you’ll do it.
1: Collect Your Competitors’ Information in a Spreadsheet
First thing’s first, after you’ve gathered all the names of the competitors you’ve looked up, you need to put them all in a spreadsheet. Of course, it isn’t enough to just write down their names; you need to mention if they’re direct or indirect competitors, their value proposition, the pros and cons of their product, the number of visitors they get on their website (or downloads if their product is an app) and lastly, the number of followers they have on social media.
2: Try Out Their Products
It’s one thing to look up reviews of their products, but it’s another experience entirely when you try out their product with your own hands. Make notes of the costs, what differentiates their product from others, how effective it is at solving the problem or any interesting features they’ve included in their product. Don’t forget about the spreadsheet though! Any notes you make of the product after using it should be added to the spreadsheet you’ve created in #1.
Now that you know who your competition is, who’s your direct and indirect competitor and what they’re offering, it’s time to come up with a conclusion. There are four important points you need to look for in the data you’ve gathered. First, the unmet needs in the market that your competitors may have missed, second, which companies are performing the best, third, what are the bad performing companies doing wrong and finally, possible new solutions that suit the market.
4: Share Your Findings
Don’t keep your team in the dark! Get your team members together and discuss the conclusions you’ve made in #3 to come up with a suitable product strategy. Your teammates may provide you with some valuable points and ideas you haven’t even thought of yourself.
Don’t Be a Copy-Cat…
Competitor analyses provide valuable insights into the target market and can give you great ideas you could implement into your own product. However, try to avoid copying other competitors’ ideas and solutions; remember, just because your competition has a fantastic idea that complements their value proposition and product, doesn’t necessarily mean it’ll fit your product or value proposition. Not only are you copying other people’s work, which is ethically wrong, but you could also be jeopardizing your reputation when people find out you’ve copied someone else’s idea. Other than that, it’s ok to derive inspiration from other companies, after all, that’s what competitor analysis is all about; improving on your already existing solutions and adding more depth into your ideas.
Keep on Analyzing
A competitor analysis isn’t done once or twice, but regularly. Things change on the market and so could your competitors. Maybe one of your direct competitors could turn indirect or vice versa. maybe the market demands changed or the once thriving companies are beginning to lose their edge. Always be on the lookout for any opportunities or potential solutions in the market and keep yourself updated on how your competition’s doing.