Competitive analysis is more than just giving your competitors' websites a quick glance or following them on LinkedIn to occasionally see what they're up to. Done right, it can unearth insights that you can turn into actions to gain a competitive edge. But how do you 'do it right'? How do you make sure that your research and analysis is relevant and useful to your business? What does effective competitor analysis look like, what are its benefits and is there competitor analysis software out there on the market to make your life easier? We have the answers to all of these questions and more so that you can run efficient competitor analysis and get great business gains from doing so.
What is competitor analysis?
In the very simplest terms, competitive analysis is the process of identifying your biggest competitors. Once you know who they are, it's a case of evaluating their products, services, brand, marketing, UX and more — and how these elements compare against your own. It's a simple idea to grasp, but not one that should be undertaken lightly. It can become a behemoth of a task once you start to delve into the many areas and metrics that are available to review and compare. The deeper you delve, the more effective your competitor analysis will be, but this also equals a big commitment in terms of time and effort. Don't worry though! This is why competitor analysis software and tools came to market in the first place — to make your job much easier when it comes to analysing your competition and comparing it to your own brand.
Who are my competitors?
Identifying who your main competitors are is the starting point of any good competitor analysis. You might have a rough idea in mind, or a list scribbled down somewhere that's been added to over the years. But, if you want to do this right, we recommend starting afresh with identifying and organising your competitors. Here are a few ideas for competitor categorisation:
Your direct competitors
These are probably the competitors that first spring to mind when you think about your competition. At the very least, you might know they exist and that they're out to steal as much market share as possible. They offer the same products or services, they are located nearby or share the same target locations, and they are targeting the same people as you. It's likely that your value propositions are similar and that you are competing to serve the same customer needs and solve the same customer problems. An example is if you sell bathroom suites — your direct competition will sell bathroom suites too, in the same places and at the same sort of price.
Your indirect competition
These companies offer products or services that are similar to those you offer, again in the same area or target location. The difference is, they are serving different needs or solving different problems, and maybe targeting a different audience.
A great example is wine versus cider. If you sell wine, it is likely available to buy in the same place as cider is. The target audience is different and the product is quite clearly different, but there is some overlap, which means it is possible that the cider brand could steal away some of your customers by convincing them to drink cider at the garden party on Saturday, and not wine.
Your tertiary competitors
This type of competitor poses less of a threat to your business, but you should still be aware of their activity in the market. Their products or services are vaguely linked to yours but there is not a direct threat of competition. The reason you should keep them in mind is that at any point, they could decide to pivot their offering to start directly competing with what you sell. They're not a threat until the moment they are, and you need to be poised and ready to react if that happens.
What are the benefits of competitor analysis?
Conducting thorough competitor analysis has lots of benefits! The biggest is that it can help you to really understand how your competition is operating, and where there are opportunities for you to outperform them and gain a competitive advantage. By reviewing how your competitors market and position themselves, you can better understand your own value proposition and what differentiates you from the pack. Once you have this insight, you can review your marketing efforts to make sure it is completely on point. You can use competitor analysis to identify any trends or industry standards that you may be missing and use this information to not just meet them but exceed what your customers are expecting and receiving elsewhere on the market.
Notice your competitors doing a lot of the same thing? This is a great indication that what they are doing is working, and that maybe it is something you should adopt or adapt and use for your own business. You can spot gaps and gain inspiration for strategies that no one else in your competitive sphere is trying yet. If you review your competitors' feedback and reviews, you will see issues with their service or products that you can capitalise on and do better, or see what their customers love and work to replicate it and then do it better!
If there is a general feeling in your business that your products could better meet the needs of your users, then competitor analysis is a really useful method of learning what your customers value and, in turn, which of your product portfolio you should focus on developing first. Armed with this insight, you can create a product development roadmap that will be profitable and will make your customers happier. Competitor analysis is also a fantastic way of spotting product gaps between what you offer versus what your competitors offer versus what your customers need. Once you spot this gap, jump in to be the first to solve the problem and introduce the new product that everyone else is missing.
The top 5 competitor analysis software and tools
Competitor analysis software has been designed to make your life easier when it comes to competitor analysis. Once you get started, running an in-depth customer analysis can lead to many rabbit holes that you might find hard to navigate. Customer analysis software and tools are designed to ensure that you don't get lost down these never-ending rabbit holes and that you can conduct your research effectively and efficiently.
We've selected 5 of the top competitor analysis tools and software for you to consider.
If you want to get ahead of your competitors in terms of your content strategy, Buzzsumo is the perfect tool to do so. It helps you to quickly identify content trends from around the world so that you can understand what is getting people excited, engaged and inspired. Buzzsumo can also help you to interrogate your competitors' content strategies to better understand what works for them and what your mutual audience finds engaging and share-worthy.
Once you have these invaluable insights to hand, you can use your findings to inform your content strategy. Get ready to execute your content plan and Buzzsumo will then analyse your activity and help you to optimise your work for further reach and engagement. The Facebook Content tool is also great for competitor analysis, as it allows you to measure your direct competitors' activity by keyword or pages.
Brandwatch is the go-to software for social listening, which is the art of scouring all of the social media channels for certain keywords. This is across all social media platforms and in dozens of languages. You can set up projects to track mentions of your own brand versus your competitors, safe in the knowledge that you can filter out any irrelevant content to streamline the information you do get. By analysing your mentions and those of your competitors, you can compare your popularity and your online reputation.
Brandwatch can also help you to create benchmarks for how large your competitors' presences are. Just have your list of competitors ready and let Brandwatch do the rest! It is a fantastic tool for quickly understanding how your competitors are perceived in the marketplace and which topics they have a big presence for. The areas where they are weak or lacking presence? They're the ones that are ideal for you to capitalise on!
Sprinklr is a powerful tool that uses AI to pull together insights about your competitors' strategies and activity. It will help you to evaluate your competition so that you're poised and ready to take advantage of opportunities when they arise. Monitor and analyse market trends and customer feedback, and turn your findings into actionable strategies that will set you apart from your competition. Sprinklr's audience insights tool is a great addition to the platform and lets you get right under the skin of your target audience so that you can better position your products, services and brand.
You may have a segment of particularly price-sensitive customers — if this is the case, you need to stay on top of what your competitors are charging for similar products, and whether they are using deals or offers to secure more orders. Skuddle collects competitor data at your chosen frequency, reacting immediately to updates like websites changing. It comes complete with an analytics dashboard that shows you insights on overpriced products, opportunities for price increases and long-term trends.
Skuddle also offers a product matching solution, which enables businesses to bring together data from competitor SKUs and UPCs across the internet to better understand the market. If you're completely new to price tracking and comparisons, Skuddle also offers an impressive bank of content to support your learning and use of the platform.
Feefo is one of the world's leading customer review platforms. Companies can use it to collect closed-end feedback from their customers, which means that the reviews generated are 100% authentic and verified. Feefo's platform is great for businesses who want to listen to and analyse the content of their customers' conversations online and compare what is being said to their competitors. You can also compare your customer reviews to those of your competitors, knowing that the feedback you are reading is completely genuine.
If you want to get direct feedback from your customers regarding their perception and loyalty to your brand, and how this compares to your competitors, Feefo has a survey function which means you can reach out to your customers to gather any information you need. Feefo can also support you in measuring your NPS score — this isn't directly linked to competitor analysis, but once you start to gather this data and understand how likely your customers are to recommend your brand, it does put you in a strong position to identify weaknesses and improve on them to get ahead of your competition.
How to do competitor analysis right
Our first tip is to make sure you are focusing on the right kind of competitors. If you're a small, local business with a growing e-commerce offering, there is no point comparing yourself to a huge global e-commerce brand that is targeting your audience. Your time is much better spent staying close to the competitors from which you can realistically take on and steal business away.
Our second is to make sure that your great competitor analysis work doesn't go to waste. There will be so many ideas and actionable insights that come out of your work, so it is crucial that you don't let these fall by the wayside or off the radar. These insights and actions are the whole points of competitor analysis. They're the things that will grow your business and turn you into a market leader. We recommend developing your insights and actions into a roadmap of activity so that each idea is worked on and implemented in due course.
Every time one of your customers decides to buy your product or service, they are choosing your business over a raft of your competitors. However, this choice isn't guaranteed and for every customer that does choose to shop with your company, you can be sure that there is one who chooses a competitor. Analysing what your competitors offer and how they are working to increase their customer base and market share is key to running a successful, sustainable business.
It isn't enough to just do some cursory, ad-hoc research into what your competitors are up to. A quick glance at their websites or a covert sign-up to their newsletter won't give you the insights you need to really understand their marketing and sales strategies, and how they compare to you. Structured, well-planned competitor analysis is the only way to be confident of how your business stacks up against your competitors.
Competitor research done well encompasses a thorough review of your competitors and all of the touchpoints you can access or have visibility of. These include their marketing, products, services, branding, website UX, customer experience, pricing, customer service — the list goes on and on! Streamline your analysis by focusing on competitors that you know are a real threat and not ones that are operating at a much higher or lower level than your business. Competitors can be split out into 3 groups: direct, indirect and tertiary. Cast your analysis net wide and try to learn as much as you can about the businesses that fall into each of these groups.
Competitor analysis can feel like a rabbit hole that you're losing your way in, especially if you have lots of competitors across all 3 groups. Avoid becoming overwhelmed by or lost in your research by using competitor analysis software and tools to streamline and optimise your work for maximum efficiency and output. Platforms like Skuddle, Feefo, Brandwatch, Buzzsumo and Sprinklr are just a few examples of tools that have been designed especially to help businesses that want to undertake thorough and meaningful competitor analysis.
Once you start working on competitor analysis, you'll start to see clear gaps in your business that — when filled — will give you a strong competitive advantage. These could be issues with your website, gaps in your targeting, issues with your products or flaws in your branding. Your analysis will also reveal opportunities for improvement or change in areas where you may be lagging behind your competitors or falling short of your customers' expectations. You'll also spot gaps between what your customers need and what you and your competitors collectively offer, which is ideal for product development. The more research you conduct, the more insights you get into what is working for your competitors, what differentiates them in the market, and which brands are taking risks or trying strategies that are getting them ahead. Successful competitor analysis should leave you feeling inspired to do better and try new things to deliver the best experience for your customers.