In my practice as a marketer, I've come across so many businesses that entered the market without knowing anything about other brands in the same niche. It's a losing game, and I'm here to tell you: you need to spy on your competitors.
Bribing your competitor's lead developer to find out the latest features being prepared for rollout will result in jail time. That's not the kind of spying I'm talking about. I'm talking about analyzing the competitive landscape. Your competitors' actions—and even just their presence—significantly influence your plans and profits. So the more you know about your rivals, the easier it is for you to navigate the market.
I've experienced this firsthand too. I came very close to diving headfirst into a product that had zero demand, but I decided to tear off a piece of the budget for competitor research. I'm glad I did—all we lost was money for the research. Since then, I've encouraged all of my clients to do competitive analysis early and often. Here's how.
Tips on effective competitor research in 2021
Knowing what's going on with your competitors has all sorts of benefits, but there are three main ones you should think about as you're doing your research:
Being prepared. The earlier you know about your competition's new moves, the more time you have to react. Learning about competitors' new features from your own customers can be painful.
Making better decisions. Decisions should be based on data. Having information about the activities and successes of similar brands will give you an extra data point to work with.
Finding new opportunities. Your competition may inspire you to try something new or expand in a direction you otherwise wouldn't have considered.
Here's what I've found to be the best ways to keep an eye on your competition, taking advantage of their digital footprints.
Recognize your competitors
If you're a small local business, your competitors are located nearby—you probably know a lot about them, but at the very least, you know they exist. But for something like an eCommerce store or online service, it's important to figure out who your competitors even are.
Start with basic keyword research. Google your product category with a few different wordings, maybe enforcing it with words like "price," "cheap," or "sale" to ensure the commercial nature of the request.
That'll help you see if there are any competitors out there you weren't aware of and generally get an idea of how saturated the market is.
Understand their SEO strategy
SEO strategy is a beast, but there are a few things you can do to figure out what's working for your competitors.
You can use a keyword research tool to see which sites are ranking for different keywords. Do they rely on high-frequency requests or long-tail keywords? What's the average keyword density on their top pages? By discovering which keywords your competitors target (and rank for), you get insight into what's working for them and uncover new keywords you might have neglected. Even better, you might also find keywords they aren't targeting and identify the underserved customers. You can also use it as a chance to differentiate your message so that you're ranking on more targeted keywords.
I like to use SE Ranking's competitor research tool: it highlights your competitors' top-ranked pages and keywords and also offers insight into organic (and paid) traffic.
Tools like SE Ranking also let you see your competitors' backlinks. Figure out which websites are already linking to your competitors, and then you can try to get yourself a backlink from those sites as well. You can also use it to decide if going after a certain partnership is worth it—did the backlink from a given source help your competitor? If so, that's a good sign it would help you too.
Pro tip: as you do this research, click into some of your competitors' sites. Manually review the high-ranking pages to see what exactly is attracting users (and Google). Data is crucial, but nothing can replace the human eye.
Examine your competitors' pricing strategy
Price has made it into the original 4 Ps concept of marketing for a reason. You need to understand and track what your competition is doing with its pricing. There are all sorts of tools out there to help (Data Crops, Prisync, Omnia Retail, to name a few), as well as specialized tools for specific industries, like hotel room price monitoring.
Once you've got the information about your competitors' pricing, here are your options for your pricing strategy:
1. Reduce your prices
This strategy will work if the price in your industry is the only differentiator. This attempt to get the market share can be effective if you have really high sales or want to boost sales of less popular items. But there are a lot of drawbacks—among them, lower profitability and weak customer loyalty.
Plus, imagine a competitor chose a strategy to reduce prices, and you decided to make the same move in response. It could lead competitors to lower prices again. Eventually, leading market players who can afford to push prices down are the ones who win. The point: think twice before considering this strategy.
2. Raise your prices
This will work if your product or brand leads the market or supports the higher price with, for example, superior quality, exceptional customer service, or unique technology. Before you go this route, make sure that you can deliver a clear message to your customers—they need to trust that there's a reason to pay more for your product or service.
You can also offer additional services, bonuses, or benefits to add value to your customer and prove the higher price is a reasonable decision.
3. Match your competitors' pricing
It's much more challenging to sell products at the same price as competitors. This strategy works if your business has been in the market for a while and can make a unique niche offer. In this case, the customer will decide to purchase based on personal preferences rather than the price.
4. Think outside the box
You might try nontraditional pricing structures. My previous client, who sells vegan sweet treats and snack foods online, tried the "pay what you want" strategy for one month in 2020 for their personalized gift boxes. During the promotion, they saw a massive increase in new customers and received tons of positive feedback. Their clients were willing to pay 15-35% more than the initial price, and the number of returning customers increased as well.
The point is that you don't necessarily have to cut prices to expand your customer pool. Instead, keep track of your competitors' pricing strategies to make informed decisions. Once your new product or service starts bringing in sales, you'll have the funds to promote it more and improve its quality. Those steps will automatically lead to a natural rise in the price and the highest customer loyalty.
Monitor your competitors' ads
There's a famous saying: "Half the money I spend on advertising is wasted; the trouble is I don't know which half." To avoid wasting your budget, it's best first to examine how your competitors are promoting themselves. You can see data on your competitors' ad campaigns by using tools like WhatRunsWhere, Google Ads, or the SE Ranking Competitive Research tool.
Here's what you're looking for:
Cost per click. If the CPC is too high for you, you may not want to use paid ads as a promotion channel at all. It's better to learn this from your competitors than from your own experience.
Keywords. Examine the competition level for each keyword used in your competitors' ad campaigns. This will help you find the best-performing keywords with low competition (and that means lower cost per click). You'll also be able to see which keywords aren't doing well and avoid those.
Long-running ads. If your competitor keeps running the same campaign for a long time, it definitely works for them. You can try to create something similar to replicate their success.
If you can understand which ad campaigns brought your competitors the most traffic and when—as well as how they communicated their message—you can try to use some of those techniques yourself.
If you decide to go the PPC route, read about how to increase your advertising ROI with Google Ads and Zapier. You might also try Google Customer Match and Google lead form extensions, which can both help ensure you're making the most of your ads.
Identify competitors' most shared content
Your competitors are creating different content types: blog posts, videos, podcasts, guides, the list goes on. If you can figure out which types of content are most popular with your competitors' audiences, that can help inform your own content strategy.
The goal is to identify which of their pages are linked to the most and which of their social media posts get the most shares. You can use a tool like BuzzSumo to analyze both of those things. Once you do that, look for commonalities.
Do the best performing pieces of content tend to all be one specific medium (video, infographic, or something else)?
Do the titles of the most shared articles all have numbers or emoji in them?
Is the most shared content all about a similar topic?
Let's say you run a travel blog and discover that your competitor's article called "How to save money for a trip" is super popular among their audience. You now have an opportunity to create content on a similar topic—but make it even better. Maybe "The ultimate guide to traveling when you have no money" or even a real story about "How 21-year-old Mike saved $10K for his epic adventure."
You should also be following all your competitors on social media to learn more about their strategy there, including which platforms work best for them.
Track competitor brand mentions
You'll want to set up a tool to help you track when your competitors are mentioned in the media. You can use the Google Alerts service, which sends you an email whenever a specific keyword is mentioned online. At the very minimum, set up alerts on mentions of competitive brands or products (and yours too!). But you can also get creative and spy on more general keywords, like the product category you're in. You can also use a more robust, dedicated tool like Sprout Social, Mention, or Keyhole.
Here are a few specific things you can do by following brand mentions.
Copy a strategy. If your competitor had a spike in mentions, check if they launched a new promo—they may have offered a discount connected to brand mentions. Or maybe they did some sort of stunt that got them press hits. If it worked for them, it might work for you.
Target the same outlets. If there are certain publications that tend to feature your competitors, you can reach out to them about covering you as well. You'll also know what the outlets are looking for in a story.
Look for influencers. If an influencer has already worked with companies in your niche (or your competitors) and if they're open to new activities, go ahead and contact them. If the engagement with branded content was low, consider skipping them.
Try your competitors' products or services
When possible, it's really worth trying your competitors' products and services however you can. Get a free trial or even buy or sign up for real, if your budget allows. Being a customer of your competitors will give you incredible insights into what's working for them—and more importantly, where you have room to swoop in with something better.
If you can't get your hands on their product or service, you can still do things like contacting their customer support or using a tool like Owletter to collect and analyze your competitors' email communications. Anything more you can learn about your competitors will go a long way.
Competitive analysis is an important part of your marketing strategy. It can prevent wasted resources, inspire new opportunities, and help you stay one step ahead of the competition.