5 ways you can gain insights from online competitor analysis

Whatever stage your business is at, analysing your competitors can help you find opportunities and keep on top of industry trends. Here we take a look at what information you should look for and how to make the best use of free digital tools.

Guide

10 min read

1. Overview

If you’re thinking of setting up your own business, then competitor research is valuable for spotting gaps in the market, developing your idea, and deciding on a business model.

Once you have your overall business concept firmed up, it’s vital for positioning your brand, sense-checking the best way to deliver your offering, and working out the best way to promote your offering.

After you’re up and running, it’s worth regularly monitoring your key competitors and doing a proper review every six months or so to help you respond to any new threats and seek out new opportunities.

Here we take a look at what sort of competitor information you should look for and how to make the best use of free digital tools.

It’s easy to burn hours of time on competitor analysis so this structure should help keep you focused on what to look for and where. We also point out a few of the pitfalls to avoid.

2. Who are your competitors?

The obvious place to start is to identify your direct and indirect competitors or, if you’ve already done that previously, to check if any new competitors have launched.

  • Direct competitors - provide the same product or service as you, probably in a similar way - and your customers may directly compare you before making a decision, e.g. two sit-down restaurants or two gyms in the same area.
  • Indirect competitors - provide something different, but from a customer perspective, it fulfills the same need. For example, a take-away is an indirect competitor for a restaurant - it has a different offering and experience, but both provide the customer’s need for dinner. Or an online workout subscription service could be an indirect competitor for a personal trainer. It is useful to be aware of these indirect competitors and keep an eye on activity, but usually it is most useful to do deeper research into your direct competitors.

Identifying your competitors

For direct competitors you already know about, jot them down in a list.

To find other competitors you might not have heard about:

  • First search for your known competitors on Google and then see what other businesses appear in the search rankings, ads, or the related searches at the foot of your search results.
  • Similarly, search in Google for keywords relating to your product or service and see which companies appear in the search results and ads.
  • If your business is local, search for your business type in Google Maps.
  • Run searches for related keywords or known competitors on social platforms including Facebook, Instagram, Twitter and LinkedIn, to see who appears.
  • Social groups and forums can be a great source of information - look in Facebook groups, or scan community forums such as Quora or Reddit. Here you’ll often see requests like ‘Can anyone recommend...’ or ‘how do I..’ and the names of products, services or businesses will often be mentioned in the answers.

Narrow it down to no more than 10 to 15 competitors to look into further at this stage. In doing this, pick about five that are closest to what you offer, and then a selection of competitors of different sizes and locations, and with various combinations of products and approaches.

What if you can’t find any direct competitors?

On one hand, this could be good, suggesting a wide-open market and that you might be offering something completely innovative.

On the other, it means you may have to do a lot of persuading that customers actually need your product or service, so think through carefully if this is something you can achieve.

3. How do competitors promote themselves?

Once you have a list of your closest competitors, one of the first things you want to look at is how they present themselves online and how much effort they put into their marketing.

What is their digital footprint?

First, assess their digital footprint. Determine whether they have a website, social pages for their business, Google Places profile, an app, an Amazon or eBay store, etc.

If they do, have a look through each to see how they present themselves online and how they display their products. This can help you:

  • Get an idea of how they have positioned their brand and what they promote as their USPs (Unique Selling Propositions) which can help you develop your own value propositions to differentiate your offering.
  • See what type of content their customers engage with - you can get an idea of this by looking on their social platforms and having a look at which posts get the most comments and likes.

How are competitors attracting customers and persuading them to buy?

You can gain lots of ideas for your own marketing by looking at how competitors promote themselves online and try to persuade customers to buy. Look to see whether they are running digital ads (like PPC or Facebook ads), email marketing, SEO, social promotion, etc. This can help you plan your advertising strategy. You also want to look at what type of messaging they use to sell themselves in these ads.

It used to be easy to see what advertising competitors were doing with offline brochures, leaflets and press ads. As digital marketing is usually so well targeted it’s easy to be oblivious to what’s going on. Here’s four things to check out.

  • Review their digital ads: a tool like Moat is useful for finding examples of digital display advertising that competitors (usually larger organisations) have done in the past. At no cost (as time of writing - 17/03/21) you can simply search the competitor name then hover over any ad that appears to find out the dates it ran. If you set up an account, you can use the tool to set up alerts for new ads from specific competitors.
  • Look at how important SEO (organic search) and PPC spend is: Spyfu is a tool that lets you do basic searches on competitors for free and gives a rough idea of their monthly SEO clicks, the balance of organic compared with paid traffic and an estimated monthly PPC budget. It also identifies their competitors for the keywords for organic and paid, so it can help you to identify competitors you might not have thought of. It also gives examples of some of their PPC ads, although you need to set up an account for more detailed data, it’s still useful for an initial review.
  • Follow them on social media: It’s very straightforward to like and follow competitors on their platforms such as Facebook, Twitter and Instagram. This can allow you to see what content they share and how their fans interact with that content.
  • See how they use email marketing: Simply sign up as a subscriber for their newsletter updates.

4. How do they deliver their product or service?

Next, looking at competitors overall business delivery can help you to determine how to deliver your offering if you’re just starting up, or judge how your systems compare. By ‘deliver’ we don’t just mean how they physically send out a product in the post, but the whole operation. Look at:

  • How they help customers select the right product or service - what information they provide and how they use descriptions, imagery, video, case studies and testimonials.
  • The transaction process - taking an order and payment.
  • How they provide the goods and services to the customer whether it’s a physical or digital product, including physical delivery if relevant.
  • What sort of follow up there is to gather feedback and cross sell.

Sometimes the best way to do this is to become a customer yourself to see first-hand what the experience is like.

Also look out for what digital tools they use such as the platform their website is built on, whether they use online booking or ticketing, how payments are processed or what tools are used for satisfaction surveys. If you find the process is smooth, this can help you shortlist digital platforms to try yourself which will save you time looking through every option.

5. How do competitors’ prices compare?

A very important part of your analysis is noting the range of prices for similar products and services to yours, to get a feel for what customers will expect to pay. Take note if competitors are in a race to the bottom on price as this could be a market where it will be hard to make a profit as a new entrant without scale on your side.

Look out for different ways prices are presented. For example, if selling online, a competitor might seem cheaper at first glance, but maybe there’s no free delivery and return postage is chargeable.

If you have been running your business for a while, keep an eye on competitor pricing and discounts, as their strategy could impact your own sales

6. What do competitors do well or badly?

When looking at a competitor’s glossy website it’s easy to assume everything is perfect. However, few businesses get everything 100% right for their customers.

It’s useful to investigate this as it might help you approach your business differently to avoid those problems.

For example, if a competitor’s customers:

  • Complain that no one responds - then you make sure you have the right resource in place for customer service.
  • Seem to be misunderstanding what comes with a product or service - then you can use this information to write better descriptions on your website.
  • Mention an issue with quality - then maybe that’s an item you don’t stock, or a service you provide in a different way.
  • Are often complaining about a specific feature or mentioning that they wish there were additional features - then this is something that you could develop for your product or service.

Review sites are ideal to trawl for insight on this, such as Trustpilot or Feefo or even just Google Reviews, (which appear in the panel on the right-hand side when you search for a business on Google). Glassdoor can be useful to see what their current and former employees say about them.

Also look on a competitor’s social channels to see if any customers have raised concerns there.

At the same time as looking at what customers say, take note of how quickly the competitor responds to complaints, queries or compliments and what they say, as there could be learnings for your business in those too.

But always remember review sites can’t be completely trusted, and some reviews need to be taken with a pinch of salt.

7. Avoiding the pitfalls

Although it’s always sensible to do competitor analysis, be aware of some easy mistakes:

  • Obsessively researching every possible competitor. It’s easy to take research to the point you get stuck in ‘analysis paralysis’ and never get round to setting up your business.
  • Allowing imposter syndrome or a perfectionist mindset to take hold. Obviously long established competitors will probably look much glossier than you will on launch day, but don’t let that lead to you doubting your own ability and skills. Remember when those competitors launched they will have been nothing like they are now, but that hasn’t stopped them progressing.
  • Assuming that everything a competitor does actually works well. When you notice something about a competitor, treat it as an observation of how they’re doing something. Many businesses do things that aren’t always ideal or profitable, but due to other pressures they never get round to changing. Even if it is right for them, it might not be right for you in your circumstances. So, remember, if you do something similar, it might be sensible to test it in a small way in your business to see if it is right for you.

If you feel yourself beginning to fall into one of these traps, shift focus, and think of everything from a customer perspective instead. Ultimately it’s what your future customers want and need that should be at the centre of everything.

Our DigitalBoost programme offers a wide range of support and resources on all things digital. Upskill on a variety of topics, including Digital Strategy, eCommerce, Social Media and more, and take advantage of our free digital health check, webinars, guides, video tutorials and podcasts.

Want to speak with your nearest Business Gateway team?

Your local Business Gateway can offer you free 1:1 advice and online support to help you with anything to do with your business or if you are just thinking about starting up then we can support you with that too.

Fill in the form below and we will get back to you to help.

About you

Enter your postcode

About your business/idea

How we use your data

We will use the information you provide to respond to your request, and to provide business advice and support services to you. For more information please view our privacy notice.

You might also be interested in

Digital tools and techniques to identify consumer trends

Keeping an eye on customer trends in your sector can inspire innovation, identify growth markets, emerging products and even spot untapped demand. We outline some digital tools and techniques that can help you.



Finding new customers with digital marketing - a route map

Within the current climate, a key concern for many small businesses is how to find new customers. Find out which digital channels are the best fit for you.

Checklist for start-ups – setting up your digital presence

For most startups, setting up a digital presence is a key step in getting a new business ready for launch, whether that’s a website, Facebook page, an email address or more. This checklist covers the things you are most likely to need.