It’s important to continually try to improve your products and services because nothing is ever perfect and there is always room for improvement.
Often, analysing the strengths and weaknesses of competitor products or organisations can be a good way to see where your own can be improved. This is called competitor analysis.
“You said, don’t fix something that is working”….
Parity is not a strategy
A competitive analysis allows you to see what worked well for others so you can implement your own improved version, but you don’t want to just copy what they’re doing. Instead, you can learn from their mistakes, pinpointing areas that need to be improved without making the same mistakes as them.
As well as looking at what they have done, a competitive analysis can sometimes help you to see what others are not doing, allowing you to get that competitive edge. This is what makes you different and stand out from the competition – otherwise, why would a consumer choose your product/service over theirs?
Do you know who your competitors are?
You probably immediately said yes to this question, however, it’s not just about who your obvious competitors are who sell the same products as you. There are different types of competitors and each is just as important to look at:
- Direct competitors – the ones that immediately jump to mind, those that offer an alternative to your business
- Analogous competitor – those that don’t offer an alternative to your product but they affect how users experience your product
- In-direct competitors – companies who sell an alternative product or service that can fill your prospects need
It’s important to assess other companies to help you expand your business and fill the gaps. For example, Uber’s direct competitors are other taxi companies. However, by conducting a good competitor analysis, they have been able to launch other services such as UberEATS and UberRUSH because they can see that places like Amazon and Deliveroo are their analogous competitors.
How to do competitive analysis
Once you know who your competitors are, it’s time to analyse what it is they offer that’s different (or the same) to you. There are three main methods of doing this:
This method is the most basic of the three but still begins to get the ball rolling on a deeper analysis of what things have room for improvement. It involves creating a list of pros and cons for each of your competitors – what do you like about their product that yours is missing? What friction is there with theirs that you can think of a solution for?
Sometimes this can also be referred to as a SWOT analysis, which stands for strengths, weaknesses, opportunities and threats.
Task analysis has a heavy emphasis on the UX of your competitors. It requires you to identify the steps a user has to take to achieve a particular goal when using your competitor’s product or service.
This is where you can find if there is any friction during the process, whether that’s an error or a particularly long journey the user has to go on to reach the goal that you may be able to achieve in fewer steps. With attention spans getting shorter, identifying and changing these will make your service or product more readily available to the user.
As the name suggests, this method is about creating an inventory of all the features all of your competitors offer. It’s best to create this in a table format because it allows you to see clearly how common certain features are and see patterns throughout your competitors.
Here is an example feature inventory for some example competitors of a hiking app:
For an in-depth competitive analysis its also important to look into how your competitors are marketing their product or service. This can be looking at their website and social media. The promotion methods they use and how they do it all count as something you could potentially improve on.
The content marketing your competitors use is another factor of their marketing strategy to look at. What type of content? How frequently do they publish content? What sort of topics do they cover?
Then you can go deeper into the content and look at the tone of voice they use, if there are any spelling errors and more.
How does your business stack up?
As useful as these techniques are upon your competitors, it’s also vital that you do them to your own business. The analysis you conduct on your own business will act as the baseline to compare across the board.
It may even uncover errors in your own business you didn’t know about, giving you the chance to make your product or service, and the marketing of it, seamless and smooth.
Don’t be afraid to dig deep when conducting your analysis – the smallest of details that can be improved are what may give you the edge over your competitors. This includes your analogous competitors too. It may feel a bit like an MI5 mission, but it’s worth having a good look and delving in to see what you can do to improve your business based on what others are doing (or not doing as the case may be).
If you have any questions, please don’t hesitate to get in touch and ask us.