In 2020, there was a 27.6% global growth in ecommerce retail sales, reaching $4.2 trillion. Most of this growth was driven by the pandemic, which also prompted many brick-and-mortar businesses to open ecommerce stores. At the same time, some retailers had to declare bankruptcy because of the inability to compete in the digital space, which is largely due to not conducting competitive research.
Whether you are a business owner, marketing professional, or entrepreneur, competitive research plays a vital role in any marketing strategy. Through competitive research, you can identify trends in your niche and areas that need improvement in your business strategy.
Many businesses lose to competing companies they know nothing about, because they have never taken the time to research who their competition is or what they are doing. Taking time to understand your competition’s way of doing business makes it easier for you to strategize your business plan. Additionally, it helps you make your product or service more visible within the market.
What Exactly is Competitive Research?
To remain in business for the long haul, you always need to be a step ahead of your competitors, and this is most efficiently done when you know who your competitors are and what they are up to.
Competitive research is the art of identifying and understanding your business competitors. In competitive research, you evaluate the weaknesses and strengths of their business, product and marketing. Taking time to analyze how your most significant competitor does business helps you compare your product, service and marketing to theirs. As a result, you will better understand how much of a threat they are to your business.
Conducting Competitive Research: Understanding the Benefits
If you are familiar with the Kodak brand, you have noticed that the brand is not as famous as it was a decade ago. Poor competitor research and inaccurate business forecasting are some of the reasons Kodak declined as a brand. The company insisted on holding on to its film-based model when market trends pointed towards the adaptation of digital photography. Eventually, the company filed for bankruptcy.
If the company has taken time to analyze their competitors and look at possible future trends in photography, they would probably still be in business today. For any business to survive the ever-changing business demographic, it needs to conduct competitor research.
Competitor research makes it possible for you to take advantage of your competitor’s weak points, to benefit your business. It also makes it easier for you to identify the best marketing campaigns giving your competitor more leads and conversions. This way, you can start investing in these campaigns to divert some of their leads.
Competitor research also makes it easier for business owners and digital marketers to identify new market trends. This way, you can plan your strategy around new and forecasted trends. It also gives you an inside look at your customer’s preferences, which helps improve product or service development.
Are you enjoying this post? If so, be sure to subscribe for occasional email updates from our team!
How to Conduct Competitive Research
First Set a Framework for Your Competitive Assessment
The first step to a successful competitor research process is identifying the framework for the assessment. This includes determining the metric to track for your research. These metrics will give you the data you need to understand what works for your competitor, giving you a competitive advantage.
Some of the metrics you may want to analyze include their social media following, post engagement, keywords rankings, and website traffic.
Choose Key Competitors to Watch Closely
Choosing a list of competitors to research is a crucial part of competitor research. Take time to find as many competing companies as possible and determine the best ones to analyze. The best competitors to analyze are those that are doing better than you are. Once you have your list of competing companies and brands, you can start looking at them more closely.
Joshua Lyons Marketing tends to select three competitors to analyze. One is a fairly close competitor, another is a competitor who will take years to catch up with, and then one more competitor who’s in the middle. By doing this, there are benchmarks and milestones to use for comparison over time.
Interview Your Competitors’ Customers
Looking at the performance of your competitors is just one step. You also need to take a closer look at their customers. This will give you an understanding of who their audience is, making it easier to determine the best target audience for your product or service.
Compare their customers to yours to find similarities and differences. Sometimes, a business does not take off in the digital space because it targets the wrong audience. To avoid that mistake, it’s strongly recommended you create marketing personas. This will help you have a deeper understanding of your target audience, and how to reach them.
If you have access to their customers, you can interview them to learn why they prefer your competitor’s product or service. During the interview, you can ask them about their interests, needs, and dreams. This helps you understand what they expect from your product or service.
With this data, you can tweak your product or brand to be more appealing to the same target audience, hence diverting some of the traffic from your competitor to your business.
Update Your Information on a Quarterly Basis
It is important to keep records of your findings to make tracking your competitor easier. Update the information at least once every three months to notice trends. When you take the time to update records, you will see patterns in terms of how often they change their marketing strategy, factors that influence their pricing, and how they undertake promotional activities.
Some of the factors you need to pay attention to when keeping records include:
- Your competitor’s activities in content marketing, social media marketing, and product promotion.
- Major areas in which your competitors are outperforming your brand.
- Weaknesses in your competitor’s marketing strategy
- Areas in which your brand is doing better than your competitor
- Possible areas your competitor can improve
- Market opportunities identified by your competitor that you hadn’t noticed
By identifying this information, you’ll be much more adequately equipped to improve your own marketing performance. Keeping records will help you see the effects of the changes you make, based on data you acquired every few months. It also enables you to understand whether your strategy is working to edge your competitor out, and where it needs to be modified.
Use Competitive Research Tools
To conduct foolproof competitor research, you’ll want to make use of the best research tools available. Some of these options include:
Quick Search is a social media search engine that can be used to give you an overview of your business online. It offers extensive coverage of all social media networks, blogs, forums, and news sites. With this tool, you can monitor conversations related to your product or service, including the latest trends in your niche.
Since this tool works in real-time, you can also use it to check on what your competitor is doing. You can compare their activity on social media with yours and discover what they are doing differently with a 90% accuracy. This tool helps you discover your competitor’s audience demographics, their location, mentions, and gender of their followers, and much more.
BuiltWith is a competitive research and business intelligence tool that gives you access to website profiles, sales, business intelligence, competitive analysis, ecommerce data, and lead generation information. Using this tool for competitor research identifies important market segments you may be missing. You can track you competitor and build a prospects list with this tool.
SEMrush is considered the ultimate competitor research tool because it can be used as an all-in-one tool to analyze PPC, SEO, competitive analysis, keyword research, PR, content, and social media, among many other competitive metrics.
This excellent marketing research tool comes equipped with more than 30 inbuilt tools that can be used to monitor your competition.
While competitive research may seem like a lot of work at first, it is an essential aspect of any successful ecommerce business. With the right tools, competitive research can be easier and more accurate.
Taking your time to know what your clients and competitors are about will teach you valuable lessons about them, as well as about yourself. This is the best way to strengthen your business while extending value to your clients.
About the Author
Lianna Arakelyan is a content writer and digital marketing expert in MuchNeeded.com, extreme with a knack for social media marketing strategy and implementation. She is extreme in her work with a deep goal of always being updated on online and offline marketing and technology news of the world.