Learn the steps to perform a competitive analysis so you can keep track of your competitors and leverage any insights you can learn from what they’re doing, without falling into the copycat territory.
What You’ll Learn: How conducting a strategic analysis of your competitors can give you deeper insights into the single most important part of your business: your customers.
Understand the Role & Purpose of a Competitive Analysis
Understand the Objective
In business, competition is a fact of life. New competitors sprout up constantly. And if you aren’t careful, one of them just might move in and start taking away your customers.
This is not to say that you should be watching the competition obsessively. After all, if you take all your cues from other companies in your industry, you’ll never end up saying or doing anything original.
So what’s the best way to keep track of your competitors and leverage any insights you can learn from what they’re doing, without falling into the copycat territory?
The answer is to perform a competitive analysis.
A strategic analysis of your competitors can give you deeper insights into the single most important part of your business: your customers.
See, your market is always evolving—which means that your customers’ opinions, problems, desires, and expectations are constantly changing, too. And you’ll have to change along with them if you want to maintain product/market fit.
By conducting your own competitive analysis, you’ll learn more about…
Alternative Solutions: What other products or services are your customers using to solve their problems? Which solutions do they like and which do they dislike, and why?
Customer Segments: Which segments of your market are your competitors targeting? What types of customers gravitate toward each of your different competitors?
Competitive Strategies: What are your competitors doing to try to stand out and appeal to customers? What value proposition are they focusing on? Which features and benefits are they highlighting on their website?
Customer Views and Preferences: Which product features do customers care about? How do they feel about competitors, and why? Do they have needs or expectations that aren’t being met?
And this is just the tip of the iceberg. You can gain all kinds of valuable insights from studying your competitors. To get started, move on to the next step.
Download the Resource
As you make your way through this article, you’ll want to make notes and take screenshot examples of what you’re learning about your competition.
To help keep the data you’re collecting organized and helpful, we’ve created a Competitive Analysis Report Template. It’s a slide deck (choose between PowerPoint or Keynote, depending on your preference). And when you’re done gathering all your information, using this slide deck, you’ll easily be able to present your findings to your team.
Choose a Variety of Competitors to Analyze
The first step in your analysis is to choose which competitors to focus on.
Don’t rush through this step! If you pick the wrong companies, it will severely limit the usefulness of what you can learn.
On the other hand, if you take your time and choose a wise selection of competitors to analyze, your competitive analysis will prove much more fruitful.
So which competitors should you analyze? The first step is to understand that there are 3 main types of competitors:
Direct Competitors: These are companies that solve the same problem for the same type of people that you do.
For example, a direct competitor to Jenny Craig might be Nutrisystem. Both companies solve the same problem (providing easy, low-calorie meals) for the same type of customer (people who want to lose weight).
Indirect Competitors: These competitors don’t do the same thing as you, but they offer a solution that’s similar to yours. They target the same customers you do.
For example, an indirect competitor to Jenny Craig might be Jazzercise. They don’t offer the same solution (Jazzercise is a workout class, not a meal plan), but it’s somewhat similar and targets the same type of customer (people who want to lose weight).
Alternative Solutions: What other solutions are people using to achieve their goals and solve their problems? This could be a simple and straightforward replacement, or it could involve stitching together multiple tools or solutions.
For example, an alternative to Jenny Craig might be following a diet on your own and joining a local gym.
ACTION ITEM: Make a list of up to 10 competitors for your analysis. To get the broadest insights possible, make sure to choose at least one competitor from the above 3 categories.
Conduct Customer Surveys & Interviews
Understand the Objective
The most important people to any business—whether it’s yours or your competitor’s—are the customers. That’s why the most valuable thing you can do when it comes to competitive research is to get out there and find out what real customers think about your competitors.
The best way to do this is through the use of customer surveys and interviews.
By getting feedback directly from customers, you’ll learn how people feel about your competitors… why they use them as opposed to you… why they switched (if they switched)… and best of all, you’ll get to hear it all in their own words.
We recommend starting with customer surveys. Surveys can give you a baseline idea of which competitors to dig into more, and help you identify which topics and questions to focus on during the interview phase.
Then, during the actual customer interviews, you can really dive deep and ask follow-up questions to learn what is motivating customers to choose your competitors. This will arm you with the knowledge you need to adjust your product, service, and/or marketing so that it does a better job of delivering the results your customers want.
In the next section, we’ll look at the types of questions you should ask during a customer interview and/or survey.
Conduct Surveys & Interviews
Now it’s time to start learning from customers. When you’re conducting your surveys and interviews, here are the types of questions we recommend you ask:
- What products and alternatives are they currently using?
- How do they use different products together?
- What do customers think of the tools they use?
- How are they using them?
- Are they using many tools to solve the problem, or just one?
- Have they ever switched tools/processes? Why?
You’ll likely have your own specific questions and follow-up questions you’ll want to ask your customers, but the list above is a good place to start.
It’s also a smart idea to include a Net Promoter Score (NPS) survey as part of your customer research process. To conduct an NPS survey, simply ask:
“On a scale from 0-10, how likely are you to recommend [product] to a friend?”
According to NPS methodology, anyone who gives a score of 0-6 is considered a detractor. Anyone who gives a score of 7-8 is considered passive. And anyone who gives a score of 9-10 is a promoter. A higher NPS score is associated with higher overall customer satisfaction.
Make sure to follow up on this question by asking:
“What is the most important reason for your score?”
These 2 questions will provide both objective quantitative data and rich qualitative information for you to analyze.
Keep in mind, you can learn a lot by repeating these NPS surveys over time. Try conducting these surveys annually to better understand how customer sentiment changes over time, while also gaining NPS data for newer competitors.
ACTION ITEM: Reach out to your customers via your email list and ask them to take a survey. Offering an incentive to take the survey, like a gift card, is likely to get more responses. From the survey responses you get, you can follow up with those you’d like to conduct an interview with. Your interview can be in-person, on the phone, or over a video chat service like Zoom or Google Hangouts.
Analyze Competitor Websites
Understand the Objective
As a marketer, you already understand the importance of having a persuasive website that speaks to your customer’s wants, fears, and desires. That’s why the next step in your competitive analysis is to take a deep-dive look at what your competitors are doing and saying on their website(s).
By analyzing the copy, images, and other messaging your competitors are using, you can learn more about how they are appealing to potential customers.
Keep in mind, while you’re doing this, that the point here is to learn as much as you can about your customers and what motivates them. Don’t be in a rush to copy what your competitors are doing. In some cases, your website might already be superior to theirs.
Also, don’t rush through this step. The more work you put into this process, the more benefit you’ll get from it. So take your time here and go deep. Read every word of copy, analyze every image, and document your findings.
Homepage & Landing Pages
Begin by looking carefully at your competitor’s homepage. This is one of the most important pages on any website, so your competitors have probably spent a lot of time working on it.
Pay particular attention to the value propositions your competitors are using here…
- What benefits or transformations are they promising?
- What types of customers are they focused on?
- Are they targeting the same market segment as you, or are they targeting a slightly different group of people?
You’ll also want to analyze as many of your competitor’s landing pages as possible. Be aware that landing pages aren’t always navigable from the main menu. Instead, to find these pages, you may need to do a little digging.
Here are a few ways to find your competitor’s landing pages:
- Click on their ads from Facebook, Instagram, Pinterest, Twitter, etc.
- Join their email list and click on the links in their sales emails
- Google relevant keywords, including their brand name, and click on their Google Ads
Here’s an example of a landing page being used by the email service provider ActiveCampaign:
If you were analyzing this page, you’d want to make note of what ActiveCampaign is doing here. For instance, much of the copy speaks to ActiveCampaign’s ability to segment and send personalized emails. This is the value proposition that they use to stand out from other email providers.
Also, notice the offer they’re making here is for a free trial. They’ve simplified their form as much as possible, asking only for an email address. Why are they using this strategy? Does it differ from your own? Could you take anything away from seeing this approach? These are the types of questions you should ask yourself and seek to answer when looking at your competitors’ landing pages.
ACTION ITEM: Analyze your competitor’s homepage and landing pages and record your findings in the Competitive Analysis Report Template.
NOTE: To do an even deeper dive, in the same way, you’re examining their landing page and homepage, also examine your competitor’s ads and social media pages that are sending traffic to these landing pages and/or their homepage.
Testimonials & Case Studies
You can learn a lot by paying attention to how your competitors are leveraging customer testimonials and case studies on their website. You’re likely to find customer testimonials on your competitors’ homepages and landing pages.
First, pay attention to what type of customers they’re choosing to feature. Do they match your customer demographics? Or are they targeting a slightly different part of the market?
Then look at the format(s) the competitor is using. Are they written testimonials? Video testimonials? Long-case studies? A combination?
Finally, dig into the content of the testimonials themselves. What features elicit the most praise from customers? What benefits does the competitor want to highlight?
Here’s an example from the social media management tool Sprout Social:
Clicking the down arrow rotates between 3 different featured testimonials. Clicking the “Watch the Full Story” button loads a video testimonial. And clicking “See more customer stories” takes you to another page with even more testimonials.
If you were analyzing this company as one of your competitors, you would want to make note of all these details. You’d also want to write down who these testimonials are coming from (in this case: a Chief Marketing Officer, a Head of Customer Experience, and a Senior Digital Content Manager).
NOTE: At this point, you should NOT be looking at customer reviews from third-party sites like Amazon or Yelp. You’ll dive deeper into customer reviews in Module 4 (the next module). Instead, stick to testimonials and case studies on your competitor’s website for now.
ACTION ITEM: Analyze your competitors’ customer testimonials and record your findings in the Competitive Analysis Report Template.
Features & Benefits
Now it’s time to do a deep-dive into the copy your competitors are using. During this step, read closely through every word on your competitor’s website. What features and benefits are they emphasizing?
In case you need a reminder:
Features are facts about a product or service. For instance, a feature of car might be that it has heated seats.
Benefits explain how those features can help to improve and transform your life. For instance, one benefit of those heated seats might be that they’ll transform your icebox of a car into a warm and comfortable place on frigid winter days.
Also, make a note of what kind of language your competitors are using. Are they using fun, playful language or a more serious tone? Does the voice match the company’s brand image?
These details can help you identify which customer segments they’re trying to appeal to. It might also give you some ideas for copy or messages you might want to try and adapt on your own website.
Here’s an example of some feature/benefit copy from the company Boosted Board:
In this example, the feature is having a high roll speed. The benefit is that it provides the optimal mix of acceleration and shock absorption—in other words, a smooth ride.
ACTION ITEM: Analyze your competitor’s features and benefits. Dig through their pages, and record your findings in the Competitive Analysis Report Template.
Pricing & Packaging
The price point for your product or service is highly important. Charge too little, and you’ll be leaving profits on the table, but charge too much, and you’ll be turning away price-sensitive customers. In addition, the way you frame or present your price can also have a huge impact.
So take a close look at what your competitors are doing when it comes to price.
Are they charging a higher or lower price than you?
Are they offering different packages, kits, or memberships? Which option seems to be the most popular?
Are they offering discounts, rebates, or free trials?
Here’s an example pricing page from Keap (formerly Infusionsoft). Notice that they are displaying 3 different pricing plans, and calling out the middle one as being the best value:
As you investigate your competitor’s pricing, keep in mind what kind of customer they’re appealing to. Does their pricing strategy make sense for their target market? Is there anything you can leverage as part of your own pricing strategy?
ACTION ITEM: Record your competitors’ pricing model.
Examine Competitor Reviews
Understand the Objective
The last step in your competitive analysis is to research what customers are saying about your competitors online. Keep in mind, this is different from the Testimonials & Case Studies from the previous module in this article. That step was about testimonials and case studies that the competitor published on their website.
But in this module, you’re going to focus on third-party review sites. Think Amazon, Yelp, Angie’s List, TrustRadius, and so on.
Studying review sites like this will help you gain a deeper understanding of what your competitor’s customers like and dislike about them. And over time, you’ll start to notice trends and patterns that will help you learn what each of your competitors is doing well and where they have room for improvement.
Once again, we want to impress on you the importance of going deep. You can’t simply skim through a handful of reviews and expect to learn anything actionable. Instead, you’ll need to set aside enough time to read carefully through all your competitor’s reviews, categorize them, and analyze the results for what you can use to improve your own business.
Read & Categorize Reviews
Analyzing your competitor’s reviews is important, but it’s not always easy—especially if they have a large number of reviews. That’s why we recommend using this 3-step process to make sense of the reviews and glean the maximum insight from them.
Step 1) First, read every review you can find for your competitors.
Some of the places you can find these reviews include…
- Angie’s List
- Google My Business
- Android/Apple App Store
Most review sites focus on a particular industry or type of business, so obviously you should focus on the review sites that cater to companies in your industry.
Step 2) Copy the text into a spreadsheet.
In order to better organize your reviews, paste them into a spreadsheet where you can easily move them around and make your own notes.
Step 3) Give each review a category or label.
Finally, categorize the reviews to make your document more useful. If a certain review deals with a popular feature or a common complaint, for example, then label it accordingly.
Some of the labels or categories you use could include…
- Top challenges
- Favorite features
- What’s missing
- Customer service
- Common complaints
With your competitive reviews categorized in this way, you’ll be able to more easily filter for the reviews dealing with one particular aspect of that competitor. This will enable you to really deep-dive into the customer feedback regarding that particular topic.
ACTION ITEM: Analyze and record your competitors’ customer reviews from third party sites.
Document Your Opportunities
At this point, you’ve done a thorough job of reading and categorizing your competitors’ reviews, and you should have a good idea of what customers think about each of the competitors in your analysis.
The last step—and perhaps the most important—is to mine your competitive reviews for missing elements and shortcomings customers are pointing out in their reviews of your competitors.
In this step, you’re searching for OPPORTUNITIES to gain an advantage over your competitors and fill the holes. Where are your competitors falling short, and how can your brand meet the competitions’ shortcomings?
For instance, if people are frustrated with your competitor’s customer service or support—perhaps you want to invest in this part of your business to provide a superior customer experience. If customers with your competitor’s product had a certain feature, consider adding that to your own product. And so on.
ACTION ITEM: Look for your competitors’ shortcomings in customer reviews and determine your areas for opportunity.
FINAL ACTION ITEM: Now that you’ve gone through every step of the competitive analysis, it’s time to look at the information you’ve gathered as a whole…
- Determine what your competition is doing better than you that you can improve upon
- Look for areas they’re falling short that you can capitalize on
- Ask yourself, what new information did you learn about your customer avatar (AKA your buyer persona) by conducting this competitor analysis? Update the information you have on your customers accordingly
Then, you want to make a plan based on what you’ve learned and the opportunities that you see and set it into motion. And using the Competitive Analysis Report Template, you’ll have what you need to present this plan so you can take action.