Competitor research is an essential activity for product managers. It involves systematically gathering information about your competitors to understand their strengths, weaknesses, strategies, and market positioning. This knowledge empowers you to make informed decisions about your own product roadmap, marketing efforts, and overall business strategy.
It starts with getting to know how many competitors you may have in the market, what problem are they solving and how and whether you do have competition or no competition at all.
Why is Competitor Research Important
- Identify Opportunities: By understanding your competitors’ offerings, you can identify gaps in the market and develop unique value propositions for your own product.
- Differentiate Your Product: Competitor research helps you differentiate your product from the competition, highlighting your unique selling points and competitive advantages.
- Improve Your Product: Analyzing competitor products can inspire new features, improve existing ones, and enhance the overall user experience.
- Inform Marketing Strategies: Understanding your competitors’ marketing tactics can help you refine your own marketing messages, target the right audience, and optimize your advertising spend.
- Predict Future Moves: By monitoring your competitors’ activities, you can anticipate their future moves and adjust your own strategies accordingly.
Types of Competitors
There are many times of competitors. Let’s understand that below –
- Direct competitors – These companies solve the same problem with similar solution.
- Indirect competitors – These companies solve the same problem with a different solution.
- Potential competitors – These companies solve different problems for the same users.
- Substitute competitors – These companies solve the core user needs in a different way.
How to shortlist the competitors that really matter:
From the numerous organizations out there, it is important that we choose only a select few competitors who can keep a close track of, as it is not possible to keep track and research all such organizations that are even slightly related to our business. The below criteria may apply for choosing competitors:
How to find competitors:
There are numerous ways to find competitors. A simple google search or key word search can yield great results. Below tips can be used while searching for competitors in a search engine.
- Company vs. ….
- Search by problem statement
- Search by user complaints
- Search by complaints and conversations
- Search by solution
- Search with quotation marks
- Search by pitch
Process to do customer research:
There can be followed a series of steps if competitor research is being performed for the first time. However, it is a continuous process, and some part of the process is always being performed all the time.
- Identify the competitors – The competitors could be in plain sight or hidden. They could be new or old players. Identifying the competitors is the first step in the process of competitor analysis.
- Collect data – Knowing the competitors is the second step. We need to start gathering data about the competitors we have found from our first step. The data can be gathered from different sources, e.g. public sources press reports, annual reports, financial statements, 3rd party reports, customer feedback, employee insights, etc.
- Analyse competitors – This is the third and crucial step. Competitors’ strategies need to be analyzed to understand them better. Their product offering, marketing tactics, sales approach, customer service, etc.
- Evaluate market position – Perform a SWOT analysis of known competitors, understand their unique selling propositions, draw their feature table, etc.
- Benchmarking – Compare the competitors in different areas with metrics. For example, product and business metrics that are available to public, their market share, revenue growth year on year, CSAT, etc. could be a great start to begin benchmarking.
- Produce a report based on competitor analysis: The report may contain an executive summary, along with industry overview, the profiles of different competitors analyzed, the product comparison, their market share and positioning, along with customer sentiments for the competitors. In the end, strategic insights along with supporting data should be added.
Key Areas of Competitor Research:
- The people at the organization – Understand how good the product team at your competitors’ is. This will prove to be a big differentiator. The product team is responsible for building a great product and bringing to the market ahead of their competitors.
- Product Analysis: Analyze competitor products in terms of features, pricing, user experience, and overall value proposition. Design and usability of the product is another key factor for success.
- Marketing Analysis: Evaluate competitor marketing strategies, including their use of social media, content marketing, advertising, press releases and public relations.
- Sales and Distribution: Investigate competitor sales channels, distribution networks, and customer support strategies.
- Financial Performance: Analyze competitor financial performance, including revenue, market share, and profitability.
- Customer Analysis: Understand the size of competitor customer or user base, including demographics, psychographics, and customer satisfaction levels. The bigger the customer base, the more dominance they would have in the market. Are they respected for their specialization or delivering on customer service? What is that one thing that sets them apart and builds the brand perception?
Tools and Techniques for Competitor Research:
- Market Research Reports: Industry reports from firms like Gartner, Forrester, and Statista provide valuable insights into market trends and competitor landscapes.
- Competitive Intelligence Tools: Tools like Owler, SimilarWeb, and Crunchbase can help you gather information about competitors’ financials, technology, and market share.
- Social Media Monitoring: Monitor competitor social media channels to track their activities, engagement, and customer sentiment.
- Customer Interviews: Talk to customers who have used competitor products to understand their experiences and preferences.
- Reverse Engineering: Analyze competitor products to understand their technical architecture and features.
Keeping track of competition:
It is very important to keep track of your known competitors. By this, you can remain updated with whether they are hiring more people to launch new features or product lines, any news of acquisition of other companies that your competitors may be engaged with or eying for to either kill the competition or enhance their product offerings.
Conclusion
By conducting thorough competitor research, product managers can gain a deeper understanding of the competitive landscape, make informed decisions, and ultimately, build a successful product that stands out from the crowd.