What is competitor analysis?
A foundational part of crafting a brand strategy relies on market orientation, i.e. the process of identifying and meeting the stated or hidden needs or wants of customers.
However, a critical part of your strategy is also associated with choosing how you want to compete, which naturally requires an understanding of the competition.
Focusing attention on your current and potential competition will help zero-in on specific claims that you believe distinguish your brand from its competitors. The more you can understand the brands that directly and indirectly compete in your area of business or industry, the better you’re equipped to capitalise on opportunities and mitigate the threats to your own business. That way you can ensure you are one step ahead of the game and the competition.
Category competitors vs. the wider market
While it is important to pay attention to your most relevant competitors, businesses can be at risk by only focusing on what they believe are their category competitors.
However, what can really impact your business is not seeing a category disruptor or a business redefining the category itself. We have seen numerous examples of this in recent years from Facebook and Google becoming major advertising channels to Amazon and eBay disrupting retail. The ability to redefine a category by shifting the offered benefits to differentiate in new and unexpected ways was the foundational idea developed in The Blue Ocean Strategy. It’s critical for businesses and brands to attend to this challenge, periodically take a broader view of the market landscape and look beyond its own category. Talk to consumers who have left your category – that way, you can understand if the “category” is losing consumers and what categories, outside of your own, you might be competing with.
Why would you do competitor analysis?
Competitor analysis is used by the most successful businesses to remain forward-looking – it helps businesses revise their strategy based on the insights they have uncovered, and amplify what works. It helps businesses understand how they can improve by better serving their customers, based on customer feedback around other competing businesses in their market. Businesses are better off if they know how they are competing for share of mind and wallet, and why.
Businesses risk not understanding when and why consumers prefer their competitors, not identifying their own competitive vulnerabilities and not seeing new threats and opportunities when they don’t execute regular competitive analyses.
When marketers have such a strong knowledge of the brand, this can create a belief that competitor analysis is not needed. This is a common misconception. As humans, we are complex beings and this means that decision making isn’t always straightforward or rational.
By asking your customers about their beliefs, attitudes, behaviours and experiences, toward you and your competitors, you can build an accurate picture of how to become a more significant part of your customers’ everyday lives.
How do you identify your competitors?
Direct, indirect, aspirational…they all matter, and it’s important you understand their significance to what you’re trying to achieve, and where and how you will decide to compete.
Firstly, it’s critical that you ask your customers and step into their shoes. The reason for this is because you are the brand, not the customer. What we assume isn’t always true. People don’t stick to categories the way we often think they do – sometimes they think outside of the box. And so businesses should too.
Only by talking to them can you reflect their point of view and understand their behaviours, your (the business’s) role within that and the wider competitive landscape.
Secondly, undertake desk research. Read feature articles about your industry, trend reports and get a gauge for what’s here and now, and also on the horizon. That way you can stay one step ahead of your competitors and lead the market.
With this in mind, keep the lens wide and maintain an open mind. Try to take as broad a view of the competitive landscape as you can. Not only will you understand the context in which you operate better, but you will learn more too. Some of the best businesses take ideas that are working well in other markets and replicate it in their own.
For example, rather than looking to understand a brand’s share of the beer market, think of the competition as ‘share of throat.’ Why? Because not everyone likes beer, but they might like wine or gin – and these are often in competition with beer as someone’s drink of choice.
What are the different aspects of a competitor to analyse?
Marketing research, as applied to competitive analysis, is key to helping us understand consumer sentiment toward brands and products, as well as those of our competitors and how they influence the market.
This is because you’re asking the people that actually use them, or those who choose not to, and gaining valuable insight into why.
But this can be broken down into specific topics.
- Who is the target audience of your competitors?
- What do people like/dislike about the product/service/brand sentiment?
- Why do people like/dislike the product/service/brand? And why do they use/not use the brand?
- When do people use them? Are there particular circumstances or occasions of use?
- How much would a customer spend, and why?
- Are they front of mind for the customer when it comes to buying or using a product/service?
- But most importantly, how does this stand up against you?
How do you conduct competitor analysis?
An effective way of conducting a competitor analysis is to break it down in stages, using the questions above as your framework.
Firstly, ask yourself – What do I already know?
Begin by conducting stakeholder interviews and tap into their vision and experience of the brand. See the market landscape from their perspective – it might be different to yours or your colleagues’. Then undertake desk research to get more insight into any broader trends that may be emerging, as well as review recent marketing research that may contain information about your competitors. It is key to begin any new marketing research efforts with some clear ideas about what you might find.
Secondly, ask yourself – what don’t I know?
But how do I know what I don’t know? – you might ask. Begin by casting your net wide, and then bring it in as you hone in on the information important to your business.
Using competitor research to understand the wider picture
At this point, it’s time to gather insight on your designated topics from the point of view of the consumer, and today, marketers have various tools available to them to do this – surveys, social media listening and purchasing panel data (E.g. Nielsen Panel, IRI), each serving a particular purpose.
Brands can leverage surveys to assess attitudes; passive data can be used to understand behaviour; and panels for market penetration and share. All of these, when used together, help to understand the sentiment and opinion about particular topics and competitors and give a broader view of the market.
You may want to segment this research too, so you can see how different audiences behave differently to competitors in the market. This will help you to establish where you are performing strongly, and how you can improve in relation to your competitors. Whilst knowing this information is great, it’s just as important to listen and act on the insights that arise from it.
There are tools to help with this. For example, the Qualtrics BrandXM platform can help you focus on the important points of action recommended in the platform.
Qualitative collection methods also play an important role. For example, social media listening tools are great at helping understand the share of voice and can help you set key metric benchmarks.
These can be used in partnership with more traditional qualitative collection methods too, like focus groups and interviews. Use these methods to dig deeper and talk to people to understand what drives their attitudes and behaviours. At Qualtrics, we work with partners to help you facilitate this qualitative research and this is where it gets really cool – by pulling this qualitative data into BrandXM, you can actually quantify it and pull out trends and valuable insights in your dashboard. This will help you with your strategy moving forward.
How often should I do competitor analysis?
This research only reflects a certain point in time, so if you want to stay ahead of the competition then you need to make sure that this data is maintained for accuracy. Many businesses find themselves wrong-footed, not because they did something wrong, but because they failed to anticipate changes in the market.
This is why keeping a pulse on how the business competes is important. Maintain an awareness of who’s gaining attention and who’s losing traction, amongst who too.
Do so by updating this research periodically, be it once a year, bi-annually, or every quarter. That way, whenever a change in strategy is taking place you can draw on the most recent data to establish this foundation for the change.
What tools can I use to do competitor analysis?
Traditionally, competitor analysis and other similar studies have been outsourced to agencies. However, these studies were often expensive, were slow to complete and only reflected one point in time and you didn’t have access to real-time data. With advancements in technology, brands have far greater accessibility to tools that mean they can take this discipline in house. Complex processes and data have now been greatly simplified, so now everyone can be the expert with access to vital insights in real-time.
Qualtrics (quantitative and qualitative)
From usage & attitude studies, to segmentation, brand perception or awareness and perception tracking, Qualtrics BrandXM can get you up and running in no time. With all data in one platform you can spend less time collating and cleaning survey responses, and more time listening and acting on your insights.
Qualtrics can also pull in all of your qualitative data at scale, giving you a holistic view of your competitors so you know how you compare.
We also work with partners to give you the most comprehensive tool for competitor research. The partners listed below can be used to collect customer feedback about the competitive landscape in qualitative and quantitative formats.
Qualtrics Research Services
If you don’t have an in-house team available to manage your data, Qualtrics research services can help. Our expert team oversees everything for you, from designing your studies, finding the right respondents, launching your surveys and reporting on the results – so you can focus on taking action to improve your business. We’re with you every step of the way.
LivingLens captures & analyses video content via speech, actions & sentiment, translating human behaviour into insights. This makes working with video efficient and scalable, turning it into a usable data asset that you can gather insights from quickly.
Whilst focus groups are still valuable, new approaches are being developed at scale which are changing the way we do market research. One example is Voxpopme, which “helps connect brands with consumers through real-time video feedback.” If you want to do in-store/shelf testing vs. interviews, digital usability testing or tracking studies, Voxpopme gives access to qualitative insight at speed and scale for various use cases. Make the most of Voxpopme’s on-demand community, or access your own audience and capture, analyse and share insights from your customers all over the world.
BrandWatch (qualitative – social listening)
There are various tools that can help with social listening, and Qualtrics has an integration with a few partners – such as Brandwatch. Brandwatch gives “structure and meaning to the voices of billions of people, so you can make decisions that truly fit with consumer and buyer needs.” If you are just beginning to analyse your competitors and the market, social listening is your ally. The reason for this is because it may (helpfully) challenge your own perceptions of what you think is true by learning what your customers are saying about you and your competitors in their own context. Brandwatch can also do scene analysis from sources such as pictures to help businesses understand the context in which they, and their competitors, are being consumed.