Competitor research is crucial to the success of your brand. Not only will it help you understand your competitors’ strengths and weaknesses, but position your business in a way that is equal parts competitive as it is intelligent. This way, you can ensure that your business is continuously innovating and staying ahead of the curve.
Types of Competitors
The first step in researching your brand’s competitors is compiling a list of all of them. However, before doing this, it’s important to understand the three different types of competitors that may oppose your business.
- Direct Competitors: these competitors sell a similar product as yourself at a similar price point, to a similar audience.
Examples of direct competitors include Maybelline, Covergirl, and Revlon.
- Secondary Competitors: these competitors may sell something similar to your product or service, but it is at a different price point or to a different audience. Therefore, regardless of the similarity in the product, the positioning strategy varies.
Examples of secondary competitors of Revlon include Bobbi Brown and Urban Decay. While all three brands sell the same category of products, they are all positioned very differently. The price points are higher and hence are targeted toward higher-end buyers.
- Tertiary Competitors: these competitors may actually be collaborators, as they sell different yet related products to a similar audience.
Examples of tertiary competitors include Revlon, Pantene, and Herbel Essences. Revlon sells hair dye, while Pantene and Herbal Essences sell hair care products.
Generating a List
Some excellent ways to start finding competitors is through:
- Searching Google
- Looking on Amazon
- Looking on Social Media
- Asking current consumers where they shop
- Going to the physical retail location of your competitors
Not sure what to search? Some excellent ways to search for your topic at hand is by using phrases such as
- Top for [audience or problem]
- Most popular…
- Best…
Find your target audience
When analyzing your business’s competitors, one of the first things to look at is their target audience. But why is their target audience relevant to your business? Their audience will help you decide whether they are a direct or indirect competitor for your business. While determining your competitor’s target audience is crucial, it is not always written in plain sight. Oftentimes, you’ll have to determine who their audience is based on their photos, marketing materials, and copy.
When attempting to determine your competitors’ target audiences, ask yourself these questions:
- Who are they targeting?
- Look at:
- Photos on their website
- Language
- Look at:
- How is it similar to your audience?
- How is it different from your audience?
Analyze your competitors’ strengths
The most successful companies have a certain quality they’re most known for-something specific that makes consumers think of them. The first step in analyzing your competitors’ strengths is identifying that said memorable quality that they have. Here are some different aspects worth considering:
- What are they known for?
- Price
- Product quality
- Type of products
- Made for a specific need, i.e. curly hair, dry skin, hypoallergenic
- Experience
- Personalization
- Subscriptions
- Events
- Social enterprise
- Donate to a worthy cause
- Involvement in non-profit work
- Values
- Locally sourced ingredients
- Non-GMO/organic
- Recycled packaging
- Exclusivity
- Smaller Batches
- “Members only”
- What makes them unique?
- How do they differentiate themselves from their competition?
The more you can dig in and discover your competitors’ strengths, the better you’ll be able to understand how you can differentiate yourself in your market.
Analyze your competitors’ weaknesses
After you’ve done a thorough assessment of their strengths, you’ll want to dive in and explore their weaknesses as well. Here are some things to consider:
- Why wouldn’t a customer buy from them?
- Price
- Product Quality
- Experience
- Values
- What are their blind spots?
- Is there anything off-putting about their brand?
During this step, it’s important to ask yourself why a potential customer wouldn’t want to buy from a certain company. Are their prices too high or too low? Are they known for low-quality products? Is the buying experience difficult? Or maybe there’s something off-putting about their marketing or their brand. The more you can explore their weaknesses, the better, because you’ll see where you can shine where other brands fail.
Analyze your competitors’ social media presence
When analyzing your competitors’ social media presence, it’s important to focus on Instagram, Facebook, and Twitter. Where do they have a strong presence? What are they doing that is working? What isn’t working? Are there any platforms they’re missing? How often do they post? How engaged are they with their customers? Write down as many insights as you can, focusing especially on their relationships with their customers.
Another place to get great insights on social media is product reviews. It’s important to pay close attention to what customers are saying, including their likes and dislikes. Customer reviews have the potential to provide immense information that will help you understand which needs aren’t being met in your market. Look on Amazon, their own online stores, Ulta, and Sephora to find reviews.
Analyze Pricing
Companies such as Amazon change their prices from day to day, so it’s important to consistently analyze the pricing of your competitors’ products. For your direct competitors, note down 3-5 products that are similar to yours, and then go on their website, as well as Google, Amazon, eBay, and Etsy, if applicable, and note their prices. If they’re running a promotion or sale, note that as well.
With so many distribution channels available, make sure to identify 3-5 products similar to yours, and then view their pricing on:
- Their website
- Amazon
- Camelcamelcamel.com
- junglescout.com
- eBay
- Etsy
- Social Media: Instagram, Facebook, Pinterest
- Ulta, Sephora, Blue Mercury
Taking note of these prices will help you better understand the monetary value customers place on your product. Therefore, you’ll be able to better price your product relative to other businesses.
Look at your competitors holistically
After analyzing the individual qualities of competitors, try looking at the competition as a whole. Look for gaps in the competition, and think about your own positioning. How does it compare to those of your competitors? Is your brand unique in comparison to the other competitors? Once you’ve collected information on at least 5 direct, 3 secondary, and 2 tertiary competitors, take time to analyze your data. Last but not least, try not to be discouraged by your competitor research. Instead, use it as valuable data you can use to improve your own business and to create a profitable niche.
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