Cracking The Competition Code
A small guide on how business owners can learn from competition, where they should look for the intel and which tools are the best
One of my duties as an expert at the European Commission is the evaluation of the business plans various companies provide when looking for an investor or applying for funding. Most frequently those entrepreneurs ask EC (European Commission) for sums between one to five million Euros. Quite a substantial budget. What worries me is the level of awareness and knowledge about competitors presented by applicants and honestly sometimes presented by my clients, too. It is really rare for breathing, living company, already active on the market for several years, to provide a broad and solid competitive overview with business relevant conclusions. Some managers and business owners have a tendency to underestimate the value and the power of a competitive analysis done properly. Some simply do not know where to start and prefer to rely on their gut feeling. As a professional marketer, I have a toolbox of professional analysis and approaches used by consultants. But also I believe in gut feeling, common sense, and simplicity. As a small business owner, you will not have time, ability and sometimes resources to run and buy professional analysis. That is why this post will be about how quickly you can have a look at your competition and learn to observe patterns relevant for your business. You will be able to do it yourself with zero budget engaged. Something simple, nice and sweet, as they say.
I recommend that you start your analysis as if you were a potential customer of your company. Careful here! Your vision of your potential customers might be a little biased. You can ask friends and family to describe for you your potential clients, it will be fun to see if they know what you are doing! You can also have a look into my article “Lazy Way Of Designing Your Customer Avatar”. Once you have clarity about your potential client, it would be smart to run several Google searches using words or phrases popular in your business. People unfamiliar with search optimization need to know that these words are called keywords and the phrases are the expressions, connected words, even short sentences like “running shoes for beginner runners” or “how to select good shoes for beginner runners”. Look at the offers appearing in your search, look at the ads, are they text-based or graphics based, perhaps animated? Analyze a number of paid and natural search results. This will show you the most active competitors in your category, certainly those who are already working hard to take over potential traffic. The one that could be partially yours, too. That would be your direct competition. Now think about all state-of-the-art alternatives to your product or service. Your potential clients will think that way, too. When deciding on the final solution they will be reviewing and flipping in their heads all possible alternatives, evaluating their value against cost.
Personally, I like to use tools, apart from the experience and common sense. They give me tangible metrics and a feeling of a real scale. Why this is important? Well, sometimes business owners have a tendency to overestimate or underestimate the power of competition using own judgment only. There are emotions involved, the concentration of a very narrow number of topics, daily business routine. All this results in a biased judgment. We just see things in a non-objective way. Are the competitors really that strong you believe they are? Are they really everywhere? Are we talking thousands of web visitors or just a few dozen? How their numbers correspond with your numbers? See the difference in the approach? Metrix versus gutfeel gives you a solid view, free of emotions.
For the beginning to get some rough idea and the first picture I recommend Similar web, where you can get the free analysis of your web vs. competitive ones from the same category. Another free tool, that requires registration however to get the results is Senuto. It allows you to observe results achieved by your site and the competitive ones. You need to benchmark these two with your own web data collected by Google Analytics metrics. There are plenty of easy to use and predefined reporting. You will easily find what you need.
These days, in the digital era, things are happening in social media, too. Is your audience visiting Facebook, Twitter, Instagram, Pinterest or any other social places? Try to figure out which ones are the most popular for them. It does not hurt to review competitive social media sites and product review sites to see and feel what customers think about the competitive offers. Read a couple of comments, see how they react to negative comments, you may find out some opinions on your product, too!
I plan to write more about competitive analysis as I believe this is core to understand how you can position your product/service to make sure it is better than alternative offers and your target audience understand why and see the value in it.