Your rivals actually push you to be better.
Remember when Snapchat exploded onto the social media scene? They made a huge splash with younger users and seemed perfectly poised to take over as the new “place to be” in social media. At least, they did until the well-established Instagram rolled out Stories, a feature that was wildly similar to the new platform’s entire experience. After that, Snapchat’s growth plummeted by 82% and Stories remains Instagram’s most popular feature.
The lesson here? It pays to be paying attention.
To stand out among others in your industry and ultimately beat them, you need to know what they’re up to. Competitive intelligence is critical for understanding your target audience, refining your business strategy, and spotting emerging trends (like the popularity of Snapchat’s filters and disappearing stories).
Learning about your business in relation to your competitors lets you:
If you’re just getting started with market research, here are 5 key things you should absolutely know about your competitors.
Not all competitors are created equal. Know who your direct and indirect competitors are as well as legacy players in the market.
Direct competitors have the same product or service offerings as you. Therefore, you’ll need to find ways to differentiate yourself from them. Indirect competitors may not offer the same product or service, but they meet the same need in an alternative way – like Airbnb is a competitor to hotels.
Knowing exactly who is out there and what makes them competitive is a great starting place for finding your most important differentiators, or unique selling points (USPs).
Now that you’ve identified your direct and indirect competitors, it’s time to ask yourself “How do they position themselves?” Brands use positioning all the time to appeal to a particular age group, gender, or price point.
Do you aim to appeal to high-end consumers, as Tesla does? or are you more widely accessible like a Prius or Chevy Volt? Do you focus on better ingredients and fair-sourcing like Chipotle? Or are you a quick stop for cheap Tex-Mex, like Taco Bell?
The more you know about your competitors’ positioning, the stronger you can make yours.
Pricing models can be a one-time fee, subscription-based, bundled, unbundled, pay-as-you-go…the list goes on and on. In this sea of options, you need to go beyond whether your pricing is “higher or lower” than the competition’s.
With information about your competitors’ approach to pricing, you can learn whether your own price tag aligns with what your target customers are willing to pay. Find out how much you need to concentrate on perceived value and whether you should add or remove services from your pricing model.
Learning about your competitors ultimately helps you serve your own customers better. If your competitors offer something your customers really like, you want to know about it! Perhaps you can offer it as well, or even improve upon it. If they offer something you can’t match or beat, that’s valuable information too. Now you’ll know what’s a good use of your time and energy, and what’s a wasted effort.
In some cases, studying your competitors’ weaknesses can reveal very lucrative opportunities. You can learn what pitfalls to avoid and see how others have solved industry or product challenges. If you can solve pain points in the industry or innovate based on observation of your competitors’ product in action – you could earn yourself a slew of new fans. Another’s weakness can become your strength.
So make sure as a business owner or entity that you’re keeping on top of changes within the competitive landscape. If you do, you’ll be able to adapt quicker and leverage your strengths.