How do you find competitors?
Identifying your competition is the first step to understanding your competition – this can help you avoid pitfalls and provide you with advantages that can make your stand tall above the others.
Google Search & Keyword Ranking
When potential customers use a search engine like Google or Bing most of them will only look at the first page of results, putting heavy weight on that page. Understanding this you can pretend to be a potential customer and easily identify your competition.
Make a list of the first page of results from searching for: the service you provide and your location – a simple template would be (service or product), (location). For example, if your business does car detailing in Seattle, see what results you get from “Car Detailer, Seattle”.
Consider how customers find your business and your competitors. You should already have a list for SEO – Search Engine Optimization – if not make a list of words or phrases potential customers can use to find you or your competitors. Rank them based on how directly they relate to your business.
Check your keywords online to see what keywords the competition uses: direct competitors will often use the same SEO words and phrases as your business. Less direct keywords can identify indirect competitors that you may have overlooked – using our car detailer example, it may be easy to miss an automotive shop that provides the same services as your car detailer but would have been missed with your primary keywords.
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Social Media
One of the most critical pieces of information you can gather is what your customers think of you or other businesses. Social media platforms can be a massive source of free customer opinions.
Sites like Facebook, Pinterest, Reddit, and Yelp are great resources for customer reviews and opinions. They can tell you if customers in your area have a preferred startup competitor that has mainly gotten attention on Reddit or what businesses are getting bad reviews and have potential customers looking for better solutions.
Keeping an eye on social media can give you an edge on what your customers think and insight into why potential customers might choose you or your competition.
Market Research
Market research is important to understand what your competitors offer and how your business fits in (or doesn’t) with your competition. It is important to pay attention to how your competitors sell their products, not just what their products are.
Keep an eye on sales and offers your competition may advertise, and scour search engines using SEO words and phrases, as mentioned before, to identify blogs or other articles that businesses publish to increase SEO visibility and webpage traffic.
Keep an eye out for how your competitors reach their customers – maybe they have a blog or Facebook page or even an email list. How your competition sells a product is as important as what the products are.
Sales Conversations with Prospects & Clients
Just like keeping an eye on social media, knowing what your customers or potential customers are saying is crucial to properly meet demand.
This can be simple, such as asking a customer their opinion while assisting them or distributing surveys to get feedback on a recent purchase. Knowing what a customer likes can identify things such as if they have a preferred business that presents direct competition to you, or if there is a service you can offer that would attract more business.
What are the 3 Types of Competitors?
Direct Competitors
A direct competitor is a business that provides the same or similar services as yours and/or targets the same customers as your business. If you have a lemonade stand, the neighbor’s lemonade stands next to yours is your direct competition. Microsoft with their Edge browser would consider Google Chrome to be a direct competitor.
The threat a direct competitor poses is clear: if a customer buys a product from your competitor there is very little to no chance they will also shop for the same product or service from you. A customer who buys an Apple phone is not going to go out and buy a Samsung phone.
Indirect Competitors
An indirect competitor may sell the same or similar products and services as your business, but it may not be the primary revenue source or not the main focus of the business. If you still have your lemonade stand, your neighbor could open a business selling umbrellas, sunscreen, and hats that also sell lemonade.
A car dealership’s automotive shop may also provide the same services as an independent automotive shop, but their main business is selling cars and not automotive repair. Because of this, a customer at an indirect competitor can still be your customer but it depends on how you promote yourself to that potential customer.
Replacement Competitors
Replacement competitors may offer services or products which are different or similar to yours but that fill the same niche or solve the same problem as yours. A replacement competitor can pose the largest threat and can also seem largely invisible. They change not specifically the products or services but instead how they are delivered.
Think about a company like Blockbuster, they failed to identify Netflix as both a direct competitor and a replacement competitor. As a direct competitor, Netflix offered video rentals just like Blockbuster, but as a replacement competitor, they offered their service through the mail presenting a new more convenient way for customers to rent videos.
The convenience of getting a rental through the mail and not having to worry about late fees left Blockbuster playing catch up because replacement competitors usually disrupt the entire ecosystem. Another example would be how malls and small stores across America are still struggling thanks to the success of Amazon’s delivery services.
Gain a Competitive Advantage
Through examining your competition, you can learn strategies like how large their social media presence is, what their product spread and brand presence are, and other key aspects of their business. Knowing what makes your business different from a direct competitor can be positive and lets you stand out.
Analyzing a competitor’s product spread can inform you what people in the local area are looking for, and what they’re not interested in which can influence your future products and services and avoid offering services you know will not sell.
If you run a restaurant business and your competitor is moving into the digital space, for example, a restaurant taking advantage of Pinterest and Instagram’s food obsession while streamlining delivery apps like Uber Eats, you may want to consider doing the same.
A proper examination of your competition can also help you identify how they are failing and allow you to fill in the gaps that customers are looking for. Maybe a brand has a social media presence but is poorly maintained. Your social media team could offer something more modern and inviting to grow your brand presence even larger than your competition.
Understanding your competition will also help when your sales team is talking to potential customers. Knowing what sales and practices your rivals use can allow your sales team to be prepared to answer questions from prospective customers and help mitigate any perceived advantages.
Doing this research can inform you on where you need to focus to be competitive in your ecosystem or what your rivals are doing that is making them so successful. This kind of market research can be a constant, time-consuming process that is sometimes offloaded to third-party analytics firms, but the benefits it can have for your business can’t be ignored.
Our AI-enabled competitive intelligence platform, Insightsfirst, can help you keep an eye on all three of these types of competitors.
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