The biggest delusion you can have about your venture is “My idea is completely new, I have no competitors”. If you truly have no competitors, you probably have no market either
Getting an edge over your competitors is important, and only possible when you truly and deeply understand the competition. Which brings us to one of the best ways of gaining new insights for your company:
With the advent of sophisticated software and technology, marketers today have the ability to dig deep into the activities of their competitors and get some incredible new ideas about their audience. Because of these reasons and more, it is immensely important to conduct regular and thorough research into your compadres.
Market Research - it’s not what YOU think
Market research is a structured and objective method of accumulating and analyzing data about the market, the target audience, and the competitors in a market environment.
Read that again.
As the founder of a digital agency, I interact with dozens of founders each month - and each time, the point I have to stress on is you are not the audience. Make sure that the customer data you collect is unbiased and objective - ‘gut-feeling’ has no place in market research (unless you’re selling edibles - In which case, definitely listen to the gut feeling).
And this is precisely the secret behind some of the most successful brands in the market.
Let’s take Apple and Microsoft’s case in point. These tech giants never fail to impress the world with their innovative and pioneering products, and although they are contenders, each one has a specific niche of an audience who is loyal to it.
How do they do it?
Companies like Apple, Microsoft, Google, and Facebook are active miners of user data. By diving into this data, they are able to unlock meaningful patterns that help them analyze the consumer behavior, and thus, understand the consumer better.
That’s the secret behind a top notch product - already knowing what the customer wants, and giving it to them.
Stalk the market
So, before you put together a new business or marketing strategy, conduct a background check. Stalk the market, your niche audience, their tastes and preferences, their buying patterns, and so on. You could be selling the best filet mignon in the entire world - but if your customers are vegans, you aren’t going to see any sales.
Market research paves the way for building a targeted, streamlined, and data-driven marketing strategy - after all, data never lies! As you learn more about your customers, product performance, and marketplace rankings, you can improve upon the product quality, and simultaneously boost both sales and customer satisfaction.
Here are four reasons why your brand needs market research to succeed:
1. Risk is NOT fun. Minimize it.
Business Ops are littered with decisions that drastically affect your company, either positively or negatively. Good market research involves great risk assessment - which tells you both - the doors to leave closed, as well as the ones to open for success.
Do you want to expand your business into the Middle East? Of course, there’s an ever-expanding market there. But do the people there even care about your product? What kind of a foothold do your competitors have? These are questions you’d want to be answered before you step into the sun (and oil) kissed region.
2. Take care of your customers - before someone else does
Companies succeed when their customers swear by them. You NEED to know what your customers think of you and your product - and respond to their queries as soon and as positively as possible. In the world of Google Reviews, Yelp, and social media - it is very difficult to shove pissed-off customers under the rug.
Twitter polls, AMAs by key management people, and quick responses to reviews/comments - all of these go a long way in understanding your customers’ concerns. In the end, even if your product needs work, your customers want to know that you’re listening to them.
3. Build your brand’s voice
Just managing customer expectations is not enough - after all, your brand’s reputation is not just decided by your customers, it’s what the general public (including potential customers) think of you!
Find out what people are saying about you. Use tools like social sniffing to scour media and social media sites, and get core and objective data on how your brand is perceived. By analyzing these stats, you will get concrete results of your business performance in the market, especially compared to your rivals.
4. Scale up your sales!
Let’s face it, the bottom line here is that we need a bump in our bottom line! All the research that we put in is to increase revenue through sales - and as we’ve stressed on way too much by now (for a good reason), you can control how well your product is received in the market.
Data is crucial. Not using it is a cardinal sin.
Let’s move on to one of the most essential parts of research - Competitive Analysis
Measuring up your competitors
Competitive analysis is the process of identifying your competitors and evaluating their strategies - to determine their strengths and weaknesses relative to those of your own product or service.
You’ve got competitors - there are no two ways about that.
When people see your product, the first thing they do is a mental comparison:
- Are the pricing and service right for this product?
- What about company X, which offers a similar product for amount Y
- Am I getting a good deal?
That’s the end goal here - convincing them that they’re getting a good deal. A competitive analysis allows you to:
- Identify the strengths and weaknesses of your competitors (AND yourself!)
- Identify the gaps in the market
- Carve out innovative ideas for products and services
- Create efficient marketing and sales strategies that target that particular gap
To conduct a competitive analysis, first, you have to jot down all the strategic competitor segments based on how they compete with each other for grabbing the share of customer dollars. It is extremely important to know who are your biggest competitors. For this, you must narrow down your competitors into two categories - direct and indirect.
By direct competitors, we mean the businesses that are offering similar products/services as you. In this sense, both your products and your rival firm’s products are close substitutes for one another.
An indirect competitor, on the other hand, is someone whose products/services are not exactly close substitutes of your products/services - but they are capable of addressing common pain points of the same consumer segment.
Questions to ask yourself
After identifying your competitors, it’s time to determine the metrics that you need to compare and contrast with your brand according to four specific categories:
The core of a business is comprised of the products/services it offers. Thus, you must carefully scrutinize and analyze what products/services your rivals are offering, their quality, pricing policy, and the discounts they are offering to their customers. Here are some questions you need to consider:
- What is the market share of your competitors?
- What kind of provider are they - low-cost or high-cost?
- What are the characteristics and pain points of their niche audience?
- What is their pricing policy? Are they using different pricing policies for online sales and offline sales?
- What is their distribution process?
- How does each rival firm distinguish themselves from their competitors?
After the product-oriented part, comes the sales pitch of your competitors. If your competitors are making it big in the market, it is clear that they are doing something really different that’s gaining them customer traction and loyalty. This is what you need to find out. Is it their pricing policy? Is it the discounts they are offering?
You can conduct a market research to answer questions such as:
- What is the sales process of your rival firms?
- What is their aggregate sales volume?
- What is their annual turnover?
- How important is the salesperson for driving in customers?
- How are they gaining the competitive advantage over you? Is their business spread across multiple locations?
- What is their discount policy? Do they offer regular or seasonal discounts?
- Do they have partner reselling programs?
While this information is readily available online for publicly owned companies, it is a little harder to access such information about privately-owned firms. However, you can get a hold of some of this information by delving into your CRM data and reaching out to the customers who think your rival firms are offering much better products/services than you. By hitting them with the proper questions, you can find out exactly why they are considering to choose a rival firm over you.
A brands website is the gateway to all the insider information of its marketing strategies and efforts. By visiting and checking your competitor's website, you can get a neat idea of how they’re trying to gain traction in the market. When browsing through a rival firm’s website, check for the following:
- Is there a blog section? If so, does it rely on visual content like infographics, gifs, and other animated content?
- Does the firm regularly post videos?
- Does it publish data sheets and case studies?
- Does it have a press release section?
- Does it have a podcast?
- Is there an FAQ section?
- What kind of offline and online advertising campaigns does it usually run?
With these pieces of information you can further analyze the content of your competitor, what topics does it usually discuss, how many times does it post content (video, features articles, blogs, etc.) in a month, what is the general tone of the content, how is the content structured, who are they targeting, and much more.
4. Social Media Presence
Having an active social media presence is a huge contributor to a company's success. Social media platforms (Facebook, Twitter, Instagram, Snapchat, LinkedIn, YouTube, Pinterest, Reddit) not only allow businesses to market their products/services but they also help them reach out to a larger group of audience, thereby, boosting the engagement rates.
You have to figure out what social media platforms are being used by your biggest rivals and how they are using it to their benefit. See what they are sharing and posting on social media sites -
- Are they sharing curated content from other platforms or are they creating original content?
- How is their audience interacting with their posts and comments?
- Is their content driving people to their landing pages? Is it helping with conversion rates?
- Are they positively inciting their audience with strong CTAs?
The answers to these questions will help you determine how popular your rivals are on social media platforms and how you could incorporate their ideas to escalate your popularity quotient on social media.
It’s not going to be easy
“The more you bleed in practice, the less you bleed in war”
“Let’s wing it” is a sure-fire way to come crashing down. Market research helps you pull off your ‘My-company-is-the-best’ goggles, and get a very honest idea about your positioning. Once you have this data, then is the time to make active decisions about your marketing approach, whether you need better processes, if it’s time to pivot your brand, and much more.
These are the building blocks to building a successful brand. Try it, and tell us how it went!