Competitions are an inevitable part of the business world. While there is every possible chance to get intimidated, you can also navigate your way through success by mounting on healthy competition. And to plan your way to success, you have to first know what your competitors are doing. This is where competitive product research comes in. Stay tuned to know all about it.

What is a Competitor Analysis?

Competitor analysis or competitor research is the process of evaluating the position of your competitors in the market. This can mean analyzing their strengths, weaknesses, and marketing tactics to help you develop your products in a unique and effective way that stands out from the rest. 

Competitor in this scenario means all the companies that offer products or services similar to yours. Doing a competitor analysis means checking on their features, the integrations they offer, the demo or trial period and its effectiveness, the price, the marketing channels they are using to promote their products, and all relatable information.

Before directly jumping into competitive product research, it is essential to understand the market landscape. Market research and analysis will help to identify customer needs,  potential scope, challenges, and risks. Once you have a comprehensive understanding of the market factors you can focus on developing strategies to act on competitive research. 

Why should you do competitor research?

Suppose you have 5 competitors in the market. All of you sell the same product, use similar marketing channels, and have more or less the same pricing structure. Why do you think consumers will choose you over the others? They will not pick you unless you are compelling them to. That is how competitor research helps to start with. It helps you to stand out from the rest.  Let's find out some more reasons.  

1. To identify reference point

Competitive product research is a great tool for identifying important references to guide your movements in the market. It will enable you to understand your competitor's journey and identify important benchmarks to measure your growth against them.

2. To differentiate your value proposition

Generally, all the similar products in the market have to offer the same features unless there is a huge price difference. The competitive product research will help you identify and build the unique “why” of your product. Why should they choose your product over your competitors? What unique value proposition are you providing?

3. To Identify and fill the gaps in your system

By closely observing and comparing your competitors, and their relationship with their clients, you can easily identify the gaps in your system and work towards filling them.

Types of competitors

The most crucial part of competitor analysis is identifying competitors. There are typically 3 types of competitions that you need to pay attention to. Let's discuss.

1. Direct competitors

The one name that directly comes to your mind when you think of competition can be referred to as direct competition. These types of competitions are generally evident as they provide identical products and services at similar prices to the same customer base. Some examples of direct competitors are Netflix vs Amazon prime, Apple vs Android, and Amazon vs Flipkart.

2. Indirect competitors

These types of competitors can offer different solutions to solve the same problem. Their product and services are not the same, but they cater to the same target audience. For example, youtube is an indirect competitor to both Netflix and Amazon Prime.

3. Replacement competitors

Replacement competitors are those that offer an alternative product or service that you offer. These types of products and services are different from what you offer but customers may choose to spend their money on them instead of you. For example, video game companies can be a replacement competitor for Netflix.

7 simple steps for product managers to do competitor research

Step 1: Identify your competitors

The first step to performing competitor analysis is to identify competitors. We have already spoken about the different types of competitors that you might have. All you need to do is spot them. Let’s get directly into the point of how you can do it. 

1. Google search

The easiest way to get started is to head straight to Google. Type in a few related keywords related to your product and there you have your list of competitors. You will probably find a lot of search results. Don’t get overwhelmed and focus on the first page of Google as it shows the most relevant results. Here are some ways how you can do it-

i) Let’s say you sell CRM software. To find out your competitors, you can simply type “CRM tools” or “CRM tools in (your country name)” if you want to be more specific and find local competitors.

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ii) You can also use the word “alternatives” along with the brand name to get a list of competitors. Let’s take the example of Netflix- a video streaming app. To find its competitors, you can simply type “Netflix alternatives” and you will have a list of companies that offer the same product and features.

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2. B2B review sites

Software listing sites like G2 and Capterra can serve as a great tool for identifying your competitors. You can type in your product type and you will get all the listings of competitors. It allows you to easily check reviews, compare your products and filter your searches to identify your closest competitors. You can view all the products together or in categories.

Here is a glimpse of how it will look if you search for CRMs on Capterra and G2.

CRM tools results in Capterra:

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CRM tools results in G2:

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3. Speak with your customers

Prospects already do their set of research before picking their vendor. They can be a great source for your research too. Ask them why they chose you and whom they were planning to consider. Also, try to interrogate the different aspects that attract them to your competitors. This way you will have an idea about what features or aspect of a product attracts them the most.

Using competitive analysis tools-  Business intelligence tools will help you to collect, organize and analyze data. This step is desirable to make sure that all your findings and facts are data-driven and not just merely based on arbitrary assumptions.. 

Step 2: Research your competitions

Now that you have a list of competitors, take your time to carefully go through their product list. Analyze what features they are offering and at what cost. What is the price difference between your products? Is there a significant difference between your pricing and feature structure? What are the things that make them better than you? What are the things that make you better than them? 

Where to research?

There are multiple platforms available to find compelling information about your competition. Let us learn about a few.

• Competitor website - Websites will reflect all the important information about a product. By going through a website you will get access to knowing product features, pricing, details, product messaging, reviews, pain points, and value propositions.

• Social Media- You can monitor conversations on social media and other forums. Since social media are public platforms, you will get raw and real information from the users about competitor products without any possible censorship.

• Review sites - These are again great tools to identify customers’ overall sentiment toward a product reflecting their frustrations, recommendations, and acceptance.

• Press releases- Keeping a tab on press releases from your competitors will keep you updated on new product launches, revenue milestones, company performance, etc.

• Trials and demo - Signing up for their trial and demo will give you an opportunity to actually test their product and identify all the strengths and weaknesses.

What to research?

Here are some important points you should ensure to find about while conducting your research.

1. Product and features

Make the effort to learn thoroughly about the product, its use cases, its value proposition, and its features. You can head to their website and evaluate how are they presenting their product.  What is their USP?  How is it different from your product?  Are there any shortcomings you notice? The product development team can use this information to improve their own product capabilities.

2. Customers and User persona

Who is the target audience? Are they focussing on any special geographical location? Competitors’ blogs and resources can serve as useful references for identifying their customer base and the type of messaging they want to convey. You can also check out their reviews on their site and other public sites and forums to understand the consumer sentiment for their product and brand.

3. Marketing Strategy

What are their marketing channels? What is their content strategy? Are they using any collaborations to promote their products? How are they utilizing ads on different platforms? At what frequency do they publish blogs and newsletters? Do they use any video promotions? Pay attention to their taglines, product proof points, category names etc. that highlight their product messaging and language.

4. Pricing Structure

Pricing analysis of competitors plays a crucial role in understanding your competitor’s market strategy. Do they offer free trials?  What features are available for free?  Is there any implementation or setup cost?  Here is a pricing structure comparison of 4 full-stack marketing automation products to help you understand better. 

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5. Technology stack

Learning about competitors' technological infrastructure and data ecosystem is important to gain insight into their internal solutions and level of expertise. This will include analyzing their operating systems and programming languages, servers, data storage, and querying, backend frameworks, APIs, etc.

Step 3: Perform SWOT Analysis of competitors

There are many strategies to perform competitor analysis but the most common one is SWOT. It stands for Strengths, Weakness, Opportunities, and Threats. This will help you to understand how your competitors are performing.  The key to identifying SWOT for competitors is to keep a tab on all of their activities. Follow them on social media, subscribe to their newsletters, frequently visit their websites, and keep yourself updated about their next possible moves.

• Strengths- Competitors' strengths can pose a risk to your own business. It is something that they are doing better than you. You can try to identify competitors’ strengths by analyzing their strategies, and relationships with customers. It can come in the form of unique content marketing, brand awareness, expertise in a certain area, skilled leadership, good internal communication, and team members.

• Weakness - Finding out competitors' weaknesses will help identify the areas you are doing better than them. They can show up in a lot of areas like outdated technology stack, high employee turnover, lack of expertise and resources, and limited product features.

• Opportunities- Monitoring competitor opportunities is essential as they keep you alert and prepared for any potential changes in your market position. Competitors’ opportunities can show in the form of strategic partnerships, new business relationships, new marketing, and promotion channels.

• Threats- Threats are possible challenges that your competitors face which can significantly impact their performance. Small market size, changes in consumer perspectives, increased competition, and security concerns are some examples of possible threats.

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Step 4: Develop a comparison matrix

After you have collected all the relevant information, it is time to lay them out on the table and prepare a comparison matrix. The matrix should include every detail and nuance of all the crucial data including key features, integrations, industries, customers, pricing, etc. The comparison matrix will serve as a handy resource that should be easily accessible to you at any given point in time. A comparison matrix can help you in the following ways-

• Analyse competitors’ strengths and weaknesses.
• Identify your uniqueness.
• Find gaps in your product strategy.
• Discover market opportunities and threats.
• Upgrade your product and marketing content. 
• Develop a farsighted growth plan.

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Step 5:  Prepare battle cards

Battle cards are visual tools for picturing the competitive landscape. Each competitor must have their own battle cards mentioning their strengths and weaknesses. It will act as a quick reference point when you are making important decisions. Apart from these, you can also create comparison battle cards. This will help you to identify critical differences, similarities, and overlaps.

Battle cards offer a different value to the different departments of your team. For example, the development team can take references from their technology stack, the marketing team can use cards to develop their own unique marketing strategy.

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Step 6: Share the research with your team

After you have gathered all the insights from your research, it is time to communicate the result with your team. This will allow you to visualize these data from different perspectives. The design team will have their input, the sales team will have their own input. By gathering opinions and perspectives from all the team members, you can start working on your product strategy.

Step 7: Follow through with action and execution

The final step is to put all the plans into action and implement your strategy to present the most compelling product in the market. From structuring your pricing to sorting out the features to developing marketing content you have a long way to go.

Conclusion

Product competitor research does not necessarily mean it helps you build a unique product, instead, it will empower you to make evidence-based decisions and prioritize activities on the roadmap. It not only presents critical reference points but also helps Product Managers visualise their goals and objectives. This will help you to cement a strong position in the market.