As an entrepreneur you can’t simply say screw the competitor, because such a thinking could harm your company in the long-term. You can’t simply say screw the customers, because your business existence depends on that customers.
In order to beat the competition, and be close to your customers you need to be smarter than your competitors. You need to have enough knowledge about your competition, but also of your buyers if you want to be able to make the right decisions for your business.
Many entrepreneurs talk about competitive research in very different ways. This is because competitive research is a wide term and might end up in a number of various directions, various knowledge and various processes. However, we need to clear understand that it is only one bit of the bigger picture where your business operates.
As an entrepreneur you will need to be aware that you don’t have to invest a large amount of money on fancy competitive research tools from the beginning. It is more important to know that this research need to be done by you, and only you in most cases, because competitive research is about performing the groundwork, it’s about going out of the building.
Competitive research means that you have recognized your top rated competitors, your top rated customers, their needs and problems, and you need to have more information about them compared with your own business. Such a knowledge will show you the right directions where your business will need to go.
As everything else that you do for your business, before start conducting competitive research, you must set clear goals that will help you to focus your energy on the right side. It is important because you can easily jump in research and become bombarded by a big amount of data from everywhere that can make the process very heavy for you.
Here I will try to systematize this process and help you to start conducting your own competitive research.
Why You Will Need to Conduct Competitive Research?
Let’s start with the benefits that you and your business will gain from such a research:
- You will have better understanding of your target market.
- You will understand what your competition is doing on that market.
- You will have information for better forecasting the potential of the market.
- You can make a best customer targeting.
- You will better understand your current and potential customers.
- You will know and understand the offers of your competitors.
- You can make better strategy to acquire new customers.
- You will know about different pricing strategy that your competitors use.
- You will make better business decisions.
How You Can Conduct Competitive Research?
I’ve found that unfolding the process into controllable portions might help every course of action to become more productive and efficient.
First, you will need information.
1. What types of information you will collect?
Here are some questions that you can consider when defining the information that you will need for your own competitive research:
- What products or services do you, and your competitors offer on the market?
- What are comparative benefits of yours and your competitor’s products and/or services?
- What problems or needs your customers want to solve?
- How they inform themselves to find products and services that will solve their problems or needs?
- What type of habits your customers have when they want to solve such problems or needs?
- What options (competitors) they have to solve such problems or needs?
- Is there a possibility for other companies to launch products or services that are similar to yours?
- Where do you and your competitors sell products, and to which target customers?
- How do your sales perform for different customer segments?
- What products your competitors have in their sales funnel, and how they acquire, maintain and grow their customers?
- What type of channels they are using and why?
For more questions you can read Answer 40 Questions to Analyse Your Industry.
2. Make an Excel File Where You Will Fill Data
You will need to create a framework for your competitive research. The best way is to create an Excel file where you will put the following columns:
- Web URL;
- Comparative benefits of their/yours products and or services;
- Brand differentiators;
- Types of promotion;
- Pricing strategies;
- Key customers;
Don’t limit yourself only on these elements as a part of competitive research. You can add more elements that you think they are important for your business. However, the more important, as you start to collect information about different competitors, is that for sure you will find something more which you can simply add to your excel file.
3. Where you will find such information?
In general, there are two most important sources of information that you can use for conducting competitive research.
- Competitors. What competitors say about themselves? Find their websites, their social media accounts, their promotional materials… There you can find many information about your competitors.
- Customers. What customers say about themselves? You already know which customers are your ideal customers. Now, you will need to gather information about them connected with the problem that your business solves. You can start finding them on social media and follow their behavior. You can start building relationship on the social media with them. You can make questionnaires and send them for their answers…
- Go out of the building and try yourself. And yes, you can’t conduct competitive research without going out of your building. You need to try competitor’s products yourself. You need to talk in person with your customers.
4. Start Collecting Information and Fill the Excel File
When you know where you can find the information and how to find it, you can start executing your plan for conducting competitive research.
You can simply fill the excel file that you prepare in the second step. Again, I want to remind you, that you are free to change your excel file, because as you find important data, you can see that the file is not optimized for the reality.
5. Implement Monitoring System for Continuous Competitive Research
It’s not enough to conduct competitive research, and to say that you finish your job. As an entrepreneur you will need a continuous process of researching.
Here are some of the things that you will need to track:
- Track any changes that they made on their visual identity.
- Track theirs new products or services.
- Track their pricing strategies.
- Track every promotion that they made.
- Track their new customers or big deals.
Tools That You Can Use for Competitive Research
For the end of this guide, I want to share some of the tools that you can use in conducting your competitive research.