Contributors from members of the Copper team
You might be a small business, but you aren’t operating on an isolated island all by your lonesome. Every business has external factors that affect its ability to earn money, and competition is a big one.
Plenty of business owners claim that they don’t have any competitors, but there’s always an alternative to your services — you just have to do a little competitive research to find them.
Heck, even indirect competitors can take business away from you, so it’s important to know what options are available to your target market.
You’re in luck; you don’t need an expert research team or expensive software to do competitive analysis. All you need is time, spreadsheets and Google to get an accurate picture of the competitive landscape.
If this is your first time researching competitors, don’t sweat it. Here’s a breakdown of the advantages of competitor research, plus how to research your market and competitors.
What is competitor market research?
Competitor market research, AKA competitive analysis or competitor research, is all about getting the low-down on your competitors. This helps you better understand what similar products or services you’re up against and identify any competitive advantages you may have compared to indirect or direct competitors.
Competitive analysis involves identifying competitors and analyzing every facet of their business, including:
- Sales process
- Corporate structure
- Talent and employees
- Market share
This is not about obsessing over your competitors like they’re your toxic ex. Competitor research is a data-driven approach that you can use to improve your own business. By understanding your competitors’ strengths and weaknesses, you can identify opportunities to grow.
Advantages of competitive analysis
There are plenty of advantages of competitor research. It has the power to inform your sales and marketing strategy, as well as save you a lot of money and time.
With ongoing competitor analysis and market research, you can:
- Stay competitive: If you’re running a new business, you really need to analyze your competitors. What’s going on in your industry? Regular competitor research will help you keep up with market expectations, as well as any trends that are on the horizon. Think about it like this: if everyone is offering something and you aren’t, it could be a sign that you need to make some changes.
- Find gaps in the market: The best part about competitor research is the moment when you realize your competitors have huge blind spots. You’ll see what they aren’t offering, or what they aren’t doing well. From there, you can identify opportunities for improving your competitive advantage — and even adjust your unique selling proposition (USP) to help you stand out from the crowd by filling in gaps that are currently in the market.
- Improve your business: Competitive research is the best way to get a dose of self-awareness for your biz. This isn’t just about identifying competitors’ weaknesses, but also using their shortcomings to improve your own business. For example, if everyone else offers chatbots to speed up customer service, maybe you need to do the same.
How to research your market and competitors
So, how do you do competitor research and analysis? As a solopreneur or small business owner, get started with these four steps.
Step 1: Find your competitors
The first step to competitor analysis market research is identifying who, exactly, you’re competing against.
Where do customers go when they aren’t buying from you? Maybe you already know the names of players in your competitive landscape, but if not, you can find more information via:
- Interviews with your sales, marketing or product teams.
- Paid surveys with your current customers — ask them which solutions they considered before yours.
- Local searches via Google Maps or your Chamber of Commerce, if you want to compete with local providers.
- Googling your services to see which other providers are popping up.
- Performing a social media competitor analysis to see which brands in the same industry are suggested by the platform’s algorithm
But just because you’re a consultant for the construction industry, for example, it doesn’t mean you’re competing with every consultant on planet Earth. You need to choose competitors who are in your league — in terms of niche, size and offerings.
After all, a small retail boutique wouldn’t go after Walmart as its main competitor. This is a helpful competitor analysis example because it shows that it just doesn’t make sense to go after everyone under the sun — especially large players with way more resources than you. Identify 3 - 5 direct competitors who are very similar to your own business. This narrows your focus, which saves you a ton of time.
Step 2: Compile research on your competitors
Once you’ve identified 3 - 5 brands that are on your level, add their information to a spreadsheet like Google Sheets. Store all of the data in a clean, consistent way so you can spot high-level trends or patterns. Mine this information by looking at things like:
- Your competitors’ website
- Your competitors’ content across channels
- Your competitors’ social media accounts
- PR and media coverage about your competitors
- User/customer reviews of your competitors
While every biz is different, we recommend creating a competitor analysis template in your spreadsheet that includes the following details:
- Important links: It’s good to have quick-reference links for easy access. Drop in links to your competitors’ websites, social media pages, reviews and news articles.
- Company overview: What’s the skinny on your competitor? Add basic information about the business, including its history, size and location(s).
- Unique selling proposition (USP): What, specifically, makes this competitor unique? Why do customers buy from them? Narrow it down to a sentence.
- Market share: How much of the market do they take up? How influential are they in your niche?
- Audience: Who does your competitor target? Do they completely overlap with your target audience, or do they specialize in a different niche, too?
- Reviews: What is your competitors’ audience saying about their service? Do they seem generally happy, or are they flaming the business with one-star reviews?
Step 3: Analyze the competition
At this point, you’ve likely compiled a sizable amount of data on your competitors. Now you’ll need to dig deeper to find your competitors’ strengths and weaknesses.
There are plenty of ways to go about this, but we’ve found it helpful to follow the Four Ps:
- Product: What does your competitor sell? How do their products or services compare to yours? What’s their flagship product or service? Look at how your competitor designed their product to work, as well as its features.
- Price: Everybody has a different pricing model, so it’s good to note how your competitors charge their clients. Is this a subscription or a one-time payment? Does the price make sense for the product? Is it considered cheap or expensive? Do they offer discounts? A referral program?
- Promotion: This step is all about marketing. How does your competitor talk about themselves? What steps do they take once a lead engages with their brand? Is the sales process efficient, or bloated and slow?
- Placement: Is your competitor present on search engines, social media or paid ads? Where are they marketing themselves? Are there any channels they aren’t using? Why?
The goal here is to look at your competitors from a high level. In your spreadsheet, you should point out what they’re doing well and where they could improve.
If you really want to go above and beyond, you can conduct a SWOT analysis for each competitor, too. This analysis looks at your competitors’ internal and external strengths and weaknesses, which is really helpful.
Step 4: Make an action plan for your business
The final step of competitor market research is to use all of this awesome data to improve your own business. Start with a self-assessment and from there create an action plan for your small business.
Look over your competitor spreadsheet and ask yourself:
- Do you see any trends?
- Are there recurring problems?
- Do they all offer something you don’t? Is that a good or a bad thing?
- What are your competitors missing?
- How are your competitors disappointing their customers?
If you conducted a SWOT analysis for your competitors, now’s the time to do one for your own business. Look for strengths, weaknesses, opportunities and threats, both internally and externally. Based on what you see from your SWOT analysis and competitor data, what changes should you make? Whether they’re minor or major pivots, either refine your existing sales and marketing strategy, or go back to the drawing board and create a new one.
Competitor market research: It’s time to dig in
It’s no secret that competitors are taking clients (and money) away from you — it’s just the reality of running a business. You should absolutely continue doing what you do best, but it’s important to use the insights from your competitive analysis as a tool for differentiating your business and expanding brand awareness, too.
These four steps are a good starting point — but they’ll be most effective if you follow them up with new competitive analysis efforts regularly (every quarter or two is preferable). You did the hard work of creating a market research competitor analysis template, so use it. Check out your competition at least every 6 months, or any time there’s a big change in your own biz or the market as a whole (we’re lookin’ at you, COVID).
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