Market Research

Understanding Your Competitors: 10 Ways to Get Started with Competitive Research

June 30, 2014

Looking to keep closer tabs on the competition? Here are 10 competitive research tactics to help you gather the info you need to establish a significant competitive advantage.

These days, it’s easy to become obsessed over the amount of data you can leverage to develop a better understanding of your customers. But if you’re serious about dominating your market then there’s another group you should be researching, as well — your competitors. Understanding your competitors is key to developing effective growth strategies, especially as it pertains to market positioning, pricing, discounting, and up-selling.
If you’re wondering where to start, the first step is to stop pretending they don’t exist, and learn to embrace the idea that you have top competitors. From there, the ten competitive research tactics below can be great ways to gather information on them.
Tip: Before you dive in, make sure you’re focused
The key to successfully carrying out competitor research is nailing down what you are looking to learn from the onset. The depth of information available and means that it can be attained makes this type of research very susceptible to scope creep, so it is important to clearly identify target questions and information.

10 Tactics to Jump-Start Your Competitive Research

1) Examine Their Website

You can learn a lot about who your competitors are targeting and how they position their product simply by visiting their website. It’s a great place to start a competitive intelligence research project, as it is full of easy, low hanging information to collect. That said, you do need to go into your research with clearly defined guidelines as to what you’re looking for. Otherwise, it can easily become a wild goose chase.
Below are three key places to focus in on to pull the most valuable info from a competitor’s website:

  • Product & Services Page: This is where a company typically lists the price and contract options for its products (if it does so at all). Sometimes this can also be a good place to identify how they position their products and justify value to prospects.
  • Case Studies: These are terrific resources to review to get an idea of who your competitors’ customers are and learn about the key selling points and value propositions your competitor is pushing.
  • Terms and Conditions Documents: A great place to learn about contract structures and early termination fees.

2) Try Out Their Self-Sign-up/Free Trial Process

In many markets, companies offer product demos or have self-sign-up processes for some or all of their products. By walking through these processes you can learn a lot about how your competitor positions its products and attempts to demonstrate value. This also can be a great way to learn about different pricing levels, contract structures, and billing options.

3) Interview Staff Who Came From Competitors

Another great source of information can come from any staff you may have hired away from competitors. Depending on their role in the business, these individuals can typically provide detailed insights on the selling and discount processes as well as pricing determinants and how the product is positioned in the market. It is key to take into consideration the perspective of the individual, as someone in sales may see the discounting process very differently than someone in customer service, for example.
One of the benefits of this research medium is that it provides you with an overall picture of the competitor, not just a snap shot of a single customer experience. Consequently, these types of interviews can provide much deeper insights to move on.

4) Interview Former Competitor Sales and Customer Support Teams

You can also try reaching out to former competitor employees outside of your company. The best group to target are those who are still on the job market, as they may be more willing to network with you and share insights about their former employer’s business. This respondent group can typically provide similar information to staff hired away from competitors. The downside is that this respondent group tends to have much lower participation rates.

5) Interview/Survey Customers Won Away from Competitors

Customers that you have recently won away from competitors will typically be willing to talk to you about their reasons for jumping ship. Low hanging fruit can include highlights on what differentiates your company from a competitor, but be strategic about extracting this information. You don’t want to come across as too heavy handed.

6) Interview/Survey Customers & Prospects Lost to Competitors

You have absolutely nothing to lose from asking lost prospects and customers about why they chose a competitor over you. Most of the time they will offer you valuable insights about your competitor in their responses. At the very least, they can provide information that can be very useful when conducting a perceived value analysis to understand the key determinants of price in a given market. But there is nothing holding you back from asking them for absolute data since they have already been lost to a competitor.

7) Interview/Survey High Profile Competitor Customers

You can also reach out to a competitor’s profiled customers that you identify on their website to see if they’d be willing to talk to you. Many will not be willing to do so, but if they do they can typically provide information about pricing, contract structures, and/or value justification. The risk you run here is that competitors are typically tightly aligned with the customers they feature or publicize, so they are likely to inform the competitor that you are trying to learn information from them.

8) Go Through Your Competitor’s Sales Process

Act like an inbound lead for your competitor and see how they treat you during the sales process. Of course, this is easier and less time consuming to do with a short sales process. Typically, a competitor will not question your interest in their products as long as you don’t present yourself as an employee from competitor X. By expressing interest, you can get exposure to their customer acquisition process, which provides first-hand experience on their pricing, contract structuring, and discount processes. The one issue with this is that you are getting exposure to a single sales process and can sometimes read too much into a single data point. This becomes a bigger issue in transactional sales.

9) Become Competitor’s Customer or Hire Someone to Do So

Purchasing a competitor product or service (either directly or observing the process second-hand) can also be very insightful. Not only will you learn how they pitch their product in a real life scenario, you’ll also get a chance to see them actually close a deal, which can highlight how they discount and what level of leeway the company provides a sales representative in doing so.  This can be great information, but remember, this is a single data point and it could be very much correlated with the sales representative. Also, it is only a realistic option in low price-point markets with shorter deal cycles. Otherwise, the opportunity cost can mount up and make alternative data collection methods more attractive.

10) Market Research and Analyst Reports

These can be good sources to understand competitive landscape from a high-level to help you identify the best competitor set to focus research around and learn about high-level market trends.

Bottom Line: Tactics Are Great, Focus is Better

The key takeaway is that there are many different resources that you can utilize to better understand your competitors pricing, positioning and product strategies. The key is knowing what information you are looking for from the onset as this will help you choose the most efficient research medium to get to this information. Otherwise, you will risk wasting time on meaningless data collection because there are always new things you can learn about a competitor. Instead, focus in on uncovering the information that matters most — data that can help you develop insights to better position your company and win away the competitor’s customers and green-field opportunities.
Also, make sure you think about alternative modes of data collection before mystery shopping a competitor. Sometimes there are more efficient ways to get data on competitors that provides a much more holistic picture of the competitor practices. Thinking about competitor intelligence in this way will set you up to collect better insights and reduce time and resource commitments.

Photo by: Esparta Palma

Marketing Manager, Pricing Strategy

<strong>Brandon Hickie</strong> is Marketing Manager, Pricing Strategy at <a href="">LinkedIn</a>. He previously worked at OpenView as Marketing Insights Manager. Prior to OpenView Brandon was an Associate in the competition practice at Charles River Associates where he focused on merger strategy, merger regulatory review, and antitrust litigation.