Competitors. Everyone has them - and whether you’d like to believe it or not, they are ready to steal your prospects and customers.
How can you beat them to the punch? By conducting a competitor analysis.
In this ultimate guide, our competitive analysis company will walk you through the basics of this methodology, the components of a competitor assessment, why your business should conduct one, and more.
Article Contents 📝
Navigate to a section that is of most interest to you or keep scrolling to start from the beginning!
- What is a competitor analysis?
- Types of competitors
- Competitor analysis benefits
- What should a competitor analysis include?
- Steps to conducting a competitor analysis
- How often to conduct a competitor analysis?
- Should I hire a competitive analysis company?
- Cost of competitor analyses
- How to use data collected in a competitive assessment
What is a Competitor Analysis?
The definition of a competitor analysis is a strategy that involves assessing the strengths and weaknesses of competing brands among key components such as product and service offerings, marketing strategies, pricing, user experience, customer satisfaction, and more.
You know the saying, “Keep your friends close and your enemies closer.” Perhaps no other statement can be more reflective of the need for strategic competitive analysis.
A competitor analysis is similar to a SWOT analysis.
Though a competitive assessment differs from a SWOT analysis because it gathers in-depth, measurable insights by using qualitative and quantitative research studies to determine the strengths and weaknesses of top competitors.
With this information, they are able to provide your organization with data-driven insights into the potential opportunities to act on and threats to be aware of.
Organizations, big or small, have a list of current and potential competitors. To get the most value from competitor market research, it is important to identify who these competing brands are.
In order to determine who your competitors are, you must look at...
- Market leaders
- Market challengers
- Market followers
- Market nichers
In this section, Drive Research will reflect on these four types of competitors we assess for our clients.
To make this easiest to comprehend we will act as if we are running a competitor analysis for an athletic shoe brand.
1. Market leaders 🦸
A market leader is exactly how it sounds. It consists of brands that hold a majority of the market share. This is likely because the organization leads in brand recognition, product innovation, marketing spend, and distribution.
An example of a market leader for our “athletic shoe brand” would be Nike.
2. Market challengers 💪
A market challenger is often treated as the runner-up in comparison to the market leader.
Although they do not own a majority of the market share, they are consistently vying or competing for that top spot. In short, they are challenging market leaders for their crown.
They also take just as much business away from brands of their own size and/or smaller mom and pop shops.
An example of a market challenger for our “athletic shoe brand” would be Adidas.
3. Market followers 🚶 🚶
This type of competitor is those who have more brand recognition compared to local, smaller businesses but generally don’t disrupt the market they are in.
Market followers do just that. They follow the trends and product integrations set forth by market leaders and challengers.
In other words, market followers see what has proven to be successful for other brands and tries to replicate that with their own.
They often are deemed as the cheaper alternative to products available by bigger organizations.
An example of a market follower for our “athletic shoe brand” would be Sketchers.
4. Market nichers 🎯
Lastly, market nichers are those that serve a small sector or a particular target audience. This is often characterized by marketing to specific demographics of people such as gender or age.
Instead of casting a wider net, market nichers focus on spending their advertising dollars on a subset of consumers.
Brands who do this successfully as seen as a big fish swimming in a small pond. However, these same brands are known to expand their product offerings as they conquer their original target market.
An example of a market nicher for our “athletic shoe brand” would be Fabletics.
The value of conducting competitive assessments is that they help businesses overcome customer churn and industry obstacles to ensure a successful future.
Keep reading for more common benefits of conducting market research on your competitors - many of which complement each other.
1. Keeping a pulse on your competition 🥊
Many of our clients who utilize our competitive analysis services do so on a continual basis. It is rarely a one-and-done study.
By collecting this type of feedback regularly, organizations are able to keep the pulse on their main competitors. Doing so allows businesses to keep tabs on how changes are made with products, services, prices, and other forms of marketing.
It also helps organizations understand trends (i.e., the rate has lowered by 0.25% every month since March).
This competitive intelligence (CI) allows them to better anticipate and react to competitive threats more quickly rather than hearing the new information passed down weeks or even months later.
2. Understand differentiators 💯
The old textbook term of unique selling proposition (USP) applies here.
Ask yourself questions like...
- What does your business offer in terms of products or services your competition does not?
- When someone calls your organization to do business, what can you offer that your competitors cannot?
- Does your business offer products or services that are faster, cheaper, or highly reviewed in comparison?
These questions are not always met with an immediate answer. What if there is no real major differentiator that comes to mind? Competitor research to the rescue.
Additionally, as part of a competitor analysis, many companies choose to conduct a product or service audit.
This component of the assessment takes a full inventory of products and services offered by your competitors to provide you with the specific areas where you can differentiate your portfolio.
3. A more tactical sales approach 🤝
A market research analysis on competitive brands will tell you a lot about the story they are trying to sell to your customers.
Whether it is high quality, low cost, great customer service, faster delivery times, or high-tech capabilities, the messaging from one competitor to another can vary greatly.
Knowing how each of your competitors’ markets itself can help you better react to and get more tactical in your sales approach.
For example, Competitor ABC focuses on high-quality products in its sales outreach and marketing.
With this information, you can then train your sales team to educate prospects on your quality control and audit process to showcase how your products are actually better quality than others on the market.
4. Taking advantage of negative customer feedback 😠
What better way to understand what it’s like conducting business with competitors than to ask their customers? This is often measured through an online survey, a common component in a competitive assessment.
By measuring common customer pain points or where customers expressed the most frustration, your organization is able to use this to its advantage.
For example, a common complaint among Competitor ABC’s customers is that their products take weeks to ship.
Meanwhile, your products ship within 24 to 48 hours after an order has been placed. Your quick delivery times should be broadcast on all marketing channels such as your website, social media, and digital advertisements.
Where your competitors are lacking serves as a gap in the market that can be filled by your organization. The first step to understanding this gap is conducting a competitive assessment.
What Should a Competitor Analysis Include?
The goal of a competitive assessment is to get a 360-degree view of the brand sponsoring the study, the market, and its competitors.
However, this is a unique market research methodology in that there are many different ways market research companies can achieve these presumed end results.
What is included in a competitor analysis varies, for instance...
- Some organizations may choose to conduct a complete assessment that consists of auditing competitors’ websites, services or products, pricing structures, and marketing efforts.
- Other organizations may choose to just focus on collecting competitors’ pricing and rates.
Much of this depends on your objectives and what you want to learn. The objectives are always a key part of a discovery call with your team to assess.
For this reason, we’ll discuss four of the most common types of competitive assessments individually.
With that being said, it is important to note that these efforts can be combined into one project if your brand is interested in evaluating all components of your main competition.
1. Website competitor audit 🖥️
In today’s digital world, there is so much work that goes into perfecting your website.
While many organizations put effort into the design and layout of their online platform (which is important), it means nothing if your website has a low volume of traffic.
With the strategy in place for search engine optimization (SEO), you stand a better chance at ranking on the first page of Google when consumers are searching for the type of products or services you sell.
Keeping this in mind, our competitive analysis research company reviews your competitors’ websites to help your organization understand how they compare.
The website audit analyzes key behind-the-scenes SEO structure such as:
- Page titles
- Meta descriptions
- H1 tags
- H2 tags
- URL structures
- 404 errors
- Domain authority
- Page load times
- Bad links
As part of the competitive analysis for the website audit, the team also reviews each site for best-practice user experience (UX) principles to examine how your site compares in terms of navigation and usability.
Although, improving your website's user experience can often be a stand-alone project itself. For instance, our team recruits users to visit your website live through a screen share while a moderator asks questions.
2. Competitor product or service analysis 🛠️
The product or service audit portion of the competitive analysis is completed by our experts. It profiles just that - the product or service offerings of your competition.
This analyzes the suite of services offered by you and your competition to:
- Identify gaps: Products or services offered by your competition but not by you
- Differentiators: Products or services offered by you but not your competition
This is compiled into a matrix to help you visually understand where those gaps and differentiators exist based on each product or service.
3. Competitive pricing analysis 💰
This could be the most useful component of the competitor analysis market research.
Generally speaking, customers care most about rates and pricing and it is always a top factor in choice for all of our customer satisfaction surveys.
If a customer can find a similar product to yours, a prospect is more likely to choose the competitor with a better price.
Our team takes a deep dive into the pricing of the products and services offered by your competition and logs these into a spreadsheet.
This helps you understand the pricing of each product or service and becomes more valuable if this is done periodically like every 3 months, 6 months, or 12 months.
Through this pricing trend, you can analyze how your competition fluctuates their prices for specific products or services, and how you compare.
These prices are pulled from e-commerce sites or the competitor’s website. If this information is not attainable online, Drive Research can scope out additional hours to mystery shop competitors for pricing via phone or email.
Our market research company most commonly completes competitive rate analyses for our bank and credit union clients.
Why? Because understanding the ever-changing rate offerings at competitive financial institutions can be an enormous and time-consuming task to stay on top-up.
Instead, Drive Research takes this burden by delivering a weekly or monthly report with a mix of local, regional, and national institutions to establish benchmarks for comparisons of rates.
Our financial services (FINSERV) clients then use this report to adjust their pricing moving forward.
Recommended Reading: Competitive Rate Analysis for Banks and Credit Unions
4. Marketing competitor audit 📣
The marketing audit reviews all of the marketing messaging and outreach being used by your competitors.
This might include items such as:
- Sales collateral
- Social media advertisements
- Whitepapers
- Emails
- Blogs
- Webinars
Our competitive analysis market research company logs all of the marketing activities into a matrix and attaches all marketing files to the project folder for your review.
After reviewing all of the different types of marketing, Drive Research outlines the key messages and brand values the competitors consistently use in the outreach to generate sales.
The marketing audit also reviews social media platforms your competitors use and logs which have a presence on including type(s) of content shared and frequency.
This could include an inventory of platforms such as Facebook, LinkedIn, Twitter, Instagram, and others. The social media portion of the competitive analysis will also review any ads being run on platforms.
Steps to Conducting a Competitor Analysis
Similar to the multiple types of competitor analysis, there are a variety of ways market research companies like Drive Research can collect the data.
Typically, primary and secondary components are included in this type of study but can vary based on what type of competitive assessment you would like to complete.
For example, if Company A only wants to conduct a website competitor analysis, then a third-party would likely use desk research to collect this data.
If Company B wants to audit its competition’s marketing efforts, pricing structures, and product lines, then a third party would use a hybrid approach with multiple data collection methodologies.
To help give you a better idea, let’s discuss the four most common methodologies a competitor research company can use to complete your analysis.
Option #1: Desk research ⌨️
This is a simple one, but searching Google for information is a tried and true basic research method. In fact, our team sometimes calls ourselves professional Googlers.
A more specific example of how Google is used in market research is compiling information about competitors.
For example, if a hotel is conducting a competitive assessment it would be valuable to understand:
- The number of hotels within their market
- The number of rooms at each hotel
- Amenities provided at each hotel
- Location
- Nearby restaurants
- Nearby entertainment
This example just scratches the surface of the types of information available via desk research.
Similar to Google, Census data is used by market researchers to learn more about the market, which is a key piece to a competitive assessment.
The benefit of using Census data is the ability to understand where the market has been, where it currently is, and projections.
There are a ton of different types of information you can learn from Census data, but primarily demographic information. This includes:
- Population sizes
- Breakdowns of genders
- Breakdowns of ages
- Breakdowns of ethnicities
- Income levels
- Housing
At Drive Research, our team uses a proprietary in-house data system to provide this type of market data for our clients.
Our subscription to Alteryx data gives us access to millions of data points on consumers across the U.S., more than what the Census.gov site offers a general user.
This type of secondary research can be customized based on the needs of the competitive assessment.
Option #2: Online surveys 📈
Wondering how your brand perception, awareness, and satisfaction stack up against competitors from the minds of consumers? Why not ask? Online surveys are a great, easy, and cost-effective way to learn more about your competitors.
Online surveys are a customizable research tool used for measuring, meaning that if you want to place a numeric value on how well your brand is perceived compared to several competitors an online survey will answer that.
An added bonus to this data collection approach is that surveys can be completed quickly. At Drive Research, our team can complete a competitive assessment online survey project in as little as 1-2 weeks!
What types of online surveys are most commonly used for competitive research?
Our competitor analysis research firm often recommends brand awareness or brand equity surveys.
There are two examples of studies that help organizations gain an impartial view of how the market perceives competitors and why their customers have chosen their business over yours.
1️⃣ Brand awareness study
A brand awareness study is typically a brief online survey that includes roughly 10 to 15 questions.
The main purpose of the study is to measure levels of awareness of the sponsoring brand as well as its key competitors. It may also address the usage and perception of the brands tested.
In addition to these questions, the survey may also cover basic demographic questions to identify gaps in the market.
2️⃣ Brand equity study
A brand equity study is typically an online survey that has 15 to 25 questions. Similar to the brand awareness study, it measures levels of awareness, usage, and perception.
It will also cover other key performance indicators like:
- Decision-making factors when choosing a brand
- Levels of satisfaction with the brand used
- Likelihood to recommend the brand use
- Likelihood to switch to the brand sponsoring the survey
Option #3: In-depth interviews (IDIs) 💬
In-depth interviews (IDIs) are a qualitative market research method used to gather feedback from key stakeholders.
An IDI discussion guide is customized based on the research objectives. The guide is precise in question language, order, etc. During the conversation, market researchers will ask strategic follow-up questions to ensure the right information is gathered.
Once the IDI is complete, the researchers write a summary based on the conversation keeping the interviewee anonymous. After all the interviews have been completed, a report will be created based on the findings.
Why in-depth interviews?
The beauty of IDIs is that the conversation can reach deeper, more specific levels than what can be learned through an online survey, Google search, and Census data.
Online surveys are powerful, but if the research goal is to understand in-depth feedback from a few specific contacts, an IDI might be the right choice or addition for your market research project.
- If your competitive assessment project includes an online survey, select respondents can be chosen based on their responses to participate in a follow-up IDI.
- If your competitive assessment project does not include an online survey, the market research company can recruit participants based on your targeting criteria.
Read this blog post to learn more about the 13-step process for conducting in-depth interviews.
Option #4: Mystery shopping 🛒
Mystery shopping is a unique way of gathering in-depth detail on the front-line staff experience with your brand as well as competitors.
Also, contrary to popular belief mystery shopping does not have to be in-person. Our competitive assessment company has completed mystery shopping studies over the phone and online with customer service reps.
It’s all about the purchase experience and gathering information on how that is completed.
Similar to an in-depth interview (IDI), mystery shopping typically follows a script or guide. A market research company, such as Drive Research, creates a guide for mystery shoppers to follow.
As mystery shoppers complete the tasks outlined, they are able to take notes and provide ratings to highlight helpfulness, friendliness, expertise, etc.
The value of mystery shopping truly comes from the development of the guide.
A market research company uses best practices when designing the guide to help ensure a high return on investment (ROI).
In addition to learning more about competitors’ sales processes, brands can also learn about:
- Pricing strategies
- Customer programs or incentives
- Other inside knowledge not available on a competitor’s website or marketing materials
The time to complete a mystery shopping experience can range from 20 minutes to over an hour. It all depends on the goals and objectives of the research.
How Often to Conduct a Competitor Analysis
Research data often represents a point-in-time measurement. To have the most accurate and actionable information available at all times, you will need to stay up to date on competitor analysis for your company.
It’s possible to make the wrong decisions from wrong or outdated observations and data. Therefore, updating research periodically is key.
It can be annually, semi-annually, quarterly, monthly, or even always-on or active. Having information on the most recent strategies, tactics and results gives you a confident perspective to base any changes or decisions.
Should I Hire a Competitive Analysis Company?
Yes. And you can contact us right here to get a quote. Okay, moving on to the next section…
Alright, fine. Let’s add some context to why organizations should hire a competitive intelligence company for your analysis.
Or watch this short video before choosing to conduct market research in-house.
Time savings 🕑
Most often companies looking to conduct competitor research reach out to a third party because they simply do not have the time or resources to do so.
No one will argue competitive research isn’t extremely valuable. But what often happens is it gets pushed to the back-burner at an organization because it is extremely time-consuming.
Researching, logging, and inventorying all of this information can take a lot of time.
It involves many hours of visiting competitor websites and including the information into a template that can be easily understood and repurposed with the sales team and management.
A market research team typically has a systematic process to make the data collection period more efficient.
So, while you are tackling your other priorities at your organization, let a competitive analysis market research firm work in tandem with you to collect this information.
Trusted third-party source 🤓
This specific benefit of hiring a competitor market research company is crucial if you plan to share the data in your marketing efforts.
Will potential customers trust data points that claim your brand is better than a competitor if the research was conducted in-house?
Consumers are smart. They can easily detect stealth marketing or false advertising. One easy way to avoid this is by partnering with an independent third-party research company you can source in all marketing materials.
Confidentiality is key 🤫
As the sponsor of a competitive analysis project, it is crucial the study be blinded. A blinded study is one that does not disclose the sponsor of the market research to the respondent.
In short, this means you will be conducting this competitor research anonymously by partnering with a third party.
If utilizing an online survey in your competitor analysis, the main benefit of a blinded study is that it takes response bias out of the equation.
However, using an online survey component or not, conducting the research anonymously assures competitors do not find out you are mystery shopping them.
Conduct a third-party competitive analysis and earn quality, actionable data
Request a Quote
A common misconception about market research is that it is extremely expensive and likely only affordable for million-dollar companies.
The truth of the matter is, that the scope of a competitive assessment can vary greatly. There are many factors that can drive the cost of a market research project up or down.
It can be helpful to provide some insight into your project when requesting a quote from a third party.
The only way to get a finite estimate for your specific competitor analysis is by contacting our team. By sharing your objectives and specifications for this project, we can create a customized proposal for you to review.
Luckily our team works fast. On average, we can send our proposals back to prospective clients within 24 to 48 hours.
Here are a few questions a competitor market research company is sure to ask you before they provide a cost estimate.
What type of competitive analysis do you want to conduct? 🖥️💰📣
As we discussed earlier in the guide, a competitive assessment generally consists of four components:
- Website Competitor Audit
- Competitor Product or Service Analysis
- Competitive Pricing Analysis
- Marketing Competitor Audit
The price of competitor analysis increases with every component that is included.
What type of data collection method are you considering? 💬🛒
Again, there are many different approaches to collecting data for a competitor assessment. An online survey will be cheaper than an in-person mystery shopping program.
Not many organizations know exactly how they’d like to collect competitor data when consulting a third party - and that’s okay too!
Drive Research can work with you to provide a variety of pricing options and recommend which approach is best based on your objectives and budget.
How many competitors do you want to audit? 🖧
The competitive landscape changes for every industry and business size. There are some markets that are more saturated than others and naturally have more competition.
The more competitors you’d like to include in an audit, the higher your project scope will be. There is a big difference between auditing 25 different brands than auditing 5.
Sharing a rough estimate of how many businesses you’d like to include in your competitor analysis can help the market research company provide a more accurate proposal cost and methodology recommendation.
How to Use Data Collected in a Competitive Assessment
Arguably the most important part of any market research study is how organizations use the data they are given.
The saying, “knowledge is power” is popular for a reason.
As a part of all competitive assessments completed by Drive Research, we like to offer unique recommendations for how our clients can turn their insights into action.
In other words, our market research company helps offer context to the long list of charts and graphs.
In this section of our ultimate guide, we’ll uncover three popular ways organizations can use data collected in a competitor analysis.
Identify potential gaps in the market ⛳
One of the strongest outcomes of conducting a competitive analysis is understanding where there are gaps in the market.
This insight first comes from understanding what products and services your competitors are offering.
Then in an online survey or in-depth interview, we can ask target audiences what they are least satisfied with and what improvements can be made to these said products and services.
The improvements and factors of dissatisfaction mentioned can be used as a starting point for your brand to create a new and improved model.
Potential gaps in the market can also be discovered beyond products and services, but also among certain demographics.
Take for example the brand Dollar Shave Club.
This California-based company delivers razors and other personal grooming products to customers for home delivery on a monthly basis. Dollar Shave Club heavily targets and markets this subscription to men, completely ignoring the notion that women use razors too.
Here lies a gap in the market and the potential to serve a whole new audience of consumers.
Razor brands like Billie took advantage of this market gap in the subscription industry and in their words, “was created to champion womankind.”
Billie now has an estimated annual revenue of $15.5 million since it was created in 2017.
Utilize data in marketing materials 📣
The data collected in a competitor analysis can not only add context to your brand messaging, but also your marketing strategy.
Where are your competitors' advertising? Are they finding success?
What social media channels are your competitors active on that you are not?
What type of email nurture campaigns are your competitors sending?
Going one step further, you can incorporate the data collected by customers and prospects from a competitive assessment in your marketing efforts. This includes:
- Social media
- Paid advertising
- Website copy
- Whitepapers
- Webinars
- Email marketing
A unique way our clients use data from a competitive analysis in their marketing efforts is with a competitor compare card.
This is where adding a consumer online survey can be helpful in a competitive assessment. The survey can ask respondents details about their experience using your competitors’ products or services as well as your own.
A competitor comparison card showcases the components (price, customer satisfaction, quality of the product, etc.) where your organization outperforms the competition in a graphically appealing way.
Compare cards can be used on your website, or as a physical handout.
Remember our athletic shoe brand “client” from before? Here’s how a competitor compare card would be displayed:
Refine or determine your pricing strategy 💸
Pricing is never a simple exercise. While some industries may easily be able to adjust their prices or rates on the fly, it can be more challenging for others.
After conducting a competitor analysis and you realize your pricing structure is much higher than others in your market - what is the reason for this?
Is it that you offer a much higher quality of product or service?
Is it because you are a more luxury brand?
Whatever the reason may be it is important to address them with prospects and customers.
Remember! Brands have more leverage than they may realize than just offering the lowest price.
Focus on other elements that bring value to the customer experience. However, this starts by gauging where your pricing falls among others in your sector.
On the other hand, if your pricing structure is much lower than others in your market you must determine if this is helping or hurting your business.
If your customers love your product and would pay more, then chances are you can raise your profit margins.
If your customers choose your product solely because it is the most cost-effective, then leverage this in your sales and marketing materials.
Frequently Asked Questions About Competitor Analysis
How do you analyze a company's competitors?
- Identify your competitors and competition. This might be direct, indirect, or other competitors in your industry or category.
- Gather information on your competitors - their products, services, branding, marketing, messaging, positioning, and all you can find.
- Compare the commonalities, uniqueness, strengths, and weaknesses you observe.
- Analyze the data to help find areas of improvement for your own organization.
What are examples of competitor analysis?
A competitor analysis report may include:
- Target market and audience
- Product, service, and offerings vs. competitors
- Market share, sales, and revenue
- Pricing differences
- Marketing and social media strategy comparisons
- Advertising tactics
- Differences in customer experience
Contact Our Competitive Analysis Company
Need help analyzing your competition using market research? Lean on Drive Research to review your competition and give you a portfolio of information including service offerings, rates, marketing messaging, and much more.
Contact Drive Research by filling out the form below or emailing [email protected].
Emily Rodgers
A SUNY Cortland graduate, Emily has taken her passion for social and content marketing to Drive Research as the Marketing Manager. She has earned certificates for both Google Analytics and Google AdWords.
Learn more about Emily, here.
