The startup business landscape is a tough one, with many companies vying to grab the attention of potential customers. And having a good idea about who you are up against will give you a strong start in your efforts. For that, you would want to do extensive competitor analysis. Here is how you can launch one and make use of the information you get.
The Importance Of Competitor Analysis For Your Startup Business
To better appreciate the importance of competitor analysis, you need to understand what it can do for your business. It is worth noting that many businesses don’t run competitor analysis because they feel that they are running their own race. They are already confident in their products\’ ability to draw customers.
But studying the competition can provide more to those businesses. There are several ways it can do that for you. And all of these are very compelling for you to ignore.
Generating New Ideas
Staying relevant in your industry is vital if you want your startup business to prosper. By studying your competitors, you get an idea of what’s working in the market. You can then apply these ideas to improve your products.
Standing Out In The Market
By knowing what’s going on with your competitors, you can also determine where you stand against them. From there, you can look for a unique selling point that will make you more prominent. You can use this to better position yourself in the market and draw the attention of people.
Getting Into The Buyer Position
Competitor analysis also contributes a lot to understand your customers more. You get to compare and contrast the different options in their eyes. You can then use that knowledge to better shape your products to match their preferences.
Doing Your Startup Business Competitor Analysis Right
The first question that will come to your mind when doing competitor analysis is where you should start. Here, you would want to begin with identifying what kind of competitors to study. There are three of these you should consider.
- Direct competitor: These are the businesses that sell goods that are identical or near-identical to yours. Thus, they target the same market as yours.
- Indirect competitors: These sell products that are not similar to yours but still satisfy the same customer needs.
- Substitute Competitors: These companies have different products and categories than yours, yet customers would still opt for them instead of yours.
Note that your competitors can change type depending on the business direction they take. As such, you should consider not only your present competitors but also future ones based on their current directions. For that, do some bit of forward thinking and identify companies that will be possible future competitors.
Reviewing Customer Personas
Another strategy to identify possible competitors to your startup business is by looking back at your customer personas. Identify their preferences and see which companies in your immediate view would match these. Take into account the challenges that they encounter and the reason why they choose you.
It would also be a good idea to map out their customer journey. Take a look at where this journey starts and what steps they undertake when buying products. This will help you identify where your competitors will likely enter.
Profiling Your Competitors
Once you have identified your current and possible competitors, you can begin profiling them. For this, you need to ask certain essential questions. These can be broken down into the following categories.
Product
- Are their products the same as yours?
- What is their pricing position?
- Do they have unique selling points compared to yours?
- What terms do they use to describe their products?
Brand
- Do they target the same customer set as yours?
- What other audience segments do they target?
- Do they have a lot of mentions online?
Customers
- How do customers engage with them?
- What kind of content do their customers respond to?
- What platforms do they use to engage?
Marketing
- What channels do competitors use to market their products?
- What campaigns are they currently running?
- What content do they produce?
- What tone of voice do they use for marketing?
Answering all of these questions will give you a clear picture of the market positioning of your competitors. Note that you can expand the list with your own questions. You can also look into more specific areas like technology to better understand their capabilities.
Doing SWOT Analysis
Once you have gathered the answer to the above questions, the next thing that you would want to perform is a SWOT (strengths, weaknesses, opportunities, threats) analysis of these competitors. The above questions will give you an idea of how to focus this analysis.
From there, you do a comparative analysis of your SWOT against theirs. Here, you might find that your weaknesses match their strengths. Or you might share similar SWOT profiles but they approach theirs differently. Additionally, you will be able to determine your market’s current condition and the entry barriers for your startup business.
How Your Startup Business Can Get More Value
With all this wealth of information, you need to be strategic in using it. Don’t just respond in a reactionary manner. Instead, think about how competitor strategies impact your business. From there, you can develop a plan that better positions your brand.
You would also want to compare the information you have gathered during your analysis with the commentary you get from customers. For instance, you can confirm with them whether the experience they get from competitors is as you have observed. You can then ask them whether they like their current experience with you. This will give you an idea of how to combine the strategies you learn with the ones you currently employ.
Boost Your Startup Business By Learning From The Competition
One last thing to keep in mind is that your startup business competitor analysis is not a one-off. As the market changes, your competition also changes. Thus, you would want to run your analysis regularly. The frequency at which you do this will depend on your industry as well as the kind of campaigns you implement.
But since these studies can require a lot of time and effort, you might need some extra help. Our team of agents can help your startup business launch such studies and make sense of the results. Sign up with us today and give your business a boost.