5 ways competitor research can benefit your business
When you launch a new business you need to conduct three types of research. These include market research, audience research, and competitor research. Out of all these, competitor research is probably the most important one.
Digging deep into what your competitors are up to will unearth heaps of useful data that you can use for many purposes within your businesses. To show you the importance of competitor research, we have listed some of its benefits below.
Helps create better products
A big mistake some amateur entrepreneurs make is creating products simply because the entrepreneur needs them. Sometimes this might work because the general public also had a need for the product, but a lot of the time it fails.
This is why the easiest way to be successful in any industry is to create products that are similar to what your audience is already buying, only making it better or more affordable. This will give it an edge and help you sell more, and it’s something that smart brand managers know how to do well.
When you are determining which products to offer, you can simply go to your competitors' websites and see what products of theirs have the most reviews, and who they are targeting with their advertising. You can also use a company research tool to obtain further details.
Research tools can unearth information such as the keywords your competitors rank for on search engines, which web pages they send the most traffic to, how much they spend on ads, and which influencers they work with.
If they are spending a lot of money to promote certain products on their website, it’s definitely one of their best-selling ones. You should think about creating something similar, but better. You can use the data from the audience research to see what your audience wants and incorporate features that will satisfy them and make your product different.
Sometimes you might want to think about removing features and making the product cheaper as Amazon did with its tablet. When Apple launched the iPad, everyone was trying to make a better tablet and beat Apple, but they were all failing. Amazon, on the other hand, made a cheaper tablet with fewer features and drove a ton of sales, because this is what their audience wanted.
Makes it easy to create better offers
A lot of people think that the success of a company chiefly hinges on how much traffic it generates or how much social proof it has. These factors matter, but they won’t work well enough if your product offering doesn’t resonate with your audience. You’ll struggle to get clients to sign a contract or even be noticed in a crowded niche.
When a brand has a poor offer, it disappears in the sea of competition.
If you have a good offer, you will generate the highest ROI no matter which marketing method you use. This is why you should conduct some competitor research to figure out your top competitors' offers and then adapt their offers to your own sales strategy.
Here are the different things to look for while assessing an offer:
- Product: As discussed in the first point, you need to create products similar to the ones your competitors are selling, but with key differentiators that are communicated clearly. You also need to make sure there is an audience that wants to buy them.
- Price: Your product needs to be at the right price. If it’s cheaper than your competitors’, you will naturally generate more sales, but you might drive away customers who think that it is cheaper because it’s inferior. So, think about this and come up with a price that shows that you are selling a good product. Also, make sure that you generate a minimum 10% profit. Don’t price yourself out of the market.
- Benefits: Your offer messaging needs to display the benefits of your product in a unique way, especially when compared to your competitors. So, look at the way your competitors present their products and use that information to inform your unique selling proposition and sell it with good copywriting.
- Bonuses: If your competition is giving away bonuses for buying their products, you should too. For best results, give buyers something that complements the product.
- Guarantee: When your product has a guarantee or warranty (or both), it makes potential customers feel more confident about the purchase. It shows that you believe in your product so much that you are willing to give a solid guarantee such as a no-questions-asked refund or a free replacement. Analyze the guarantee your competition offers and come up with something that will ensure you outdo them.
Nowadays, the market is constantly evolving. Many of the products that sold like hotcakes just a few years ago aren't even available anymore, and the marketing techniques that worked are today considered invasive or easily ignored.
Regularly keeping tabs on the competition will help you figure out how to adapt and survive in the short term and in the future by either coming up with new products or modifying your marketing strategy.
Sometimes you will also learn about companies you can acquire and quickly grow your business.
Helps you set benchmarks
One of the keys to business success is setting the right benchmarks. Quite often people don’t consider the industry benchmarks and set unrealistic goals and end up disappointed when they don’t reach them.
One way to ensure that you set realistic goals is by checking out the industry benchmarks. There are tons of studies like this one from GetResponse on email marketing statistics, that show you the targets that you can aim for.
You can always do the research by yourself and start from scratch, but studies like this can give you a headstart. Your first goal should be to reach average performance levels for your sector. You can later focus on exceeding them.
Improves your marketing
It takes time to get successful marketing correct. Very few people get it right the first time, as you need to conduct several experiments with techniques such as A/B testing to see which landing page converts better, which ads generate the most traffic, and which copywriting style generates the most sales.
This will usually take up months. But you can cut short the time by copying some of the techniques that your competitors are using. This won’t help you always get it right the first time, but it can help you reach your marketing goals quicker.
For example, if you want to use SEO to market your business, you can analyze your competitors' websites to see what they rank for and try to rank for the same keywords. Before trying to organically rank for these keywords you can also take advantage of features such as responsive search ads and see if traffic obtained from these keywords converts.
Moreover, if you are using ads, you can see which ad creatives and landing page design styles are working for your competitors.
Now invest in competitor research
If you aren’t doing any competitor research, it can negatively impact your business. This is true whether you are just launching or are already established. As you can see above, there are many strategic benefits of doing competitor research.
Yes, it does take a lot of time to do the research, but this is what separates the top companies from the rest. They regularly analyze their audience, the industry, and the competition and modify their products and marketing strategies to stay relevant and thrive in the ever-changing business atmosphere.