A few years ago, I was working at a marketing agency when a client approached us with everything needed for a new product launch. Their well developed messaging, press release and marketing material mock-ups were ready to go. There was just one problem: their tagline was, word-for-word, exactly the same as one of their competitors.
Unfortunately, this type of situation occurs more often than you’d think. Failure to perform comprehensive competitor evaluation has led many businesses down a resource-draining and unfruitful marketing path.
Knowing what your competitors are up to and where your business stands in the market is critical to staying relevant. Without it, businesses operate in the dark, blind to how they fit in their industry. Brands must know when to act on competitive information, but also when to hold off and collect more intelligence.
The risks of jumping the gun
The market is ever-changing, and competitive evaluation is no different. While exploring your competitors’ pricing, product offerings, customer reviews and more, it can be tempting to dwell on current information that challenges your own products and services at the moment. The trick is in keeping your cool.
There are a few reasons why you should hold back before making big changes based on competitor analysis:
- Potential for wasted money, time, and resources. Just as bad as the tagline fiasco, where little awareness of the market existed, is throwing resources at a perceived problem without being sure of the threat. JC Penney, for example, is struggling after losing much of their customer base in the effort to make stores more attractive to millennials. The assumption that gaining this generational cohort was the hurdle to growth wound up costing the retail clothing chain millions. The same issue can occur for B2B companies who fail to thoroughly analyze the market and the needs of both their existing and potential clients.
- Opportunity to learn from others’ mistakes. A few years ago, when other social media management platforms started providing Instagram posting services, they were quick to market it as “Instagram Publishing.” The platform, however, didn’t quite enable direct publishing in the way customers expected—at the time, posting on Instagram was only possible because of a multi-step mobile workaround. After watching the fallout from that misunderstanding, we launched the same service as “Instagram Scheduling.” This gave our clients a better idea of what they could realistically expect when posting to Instagram a couple years ago (of course, as soon as Instagram made direct publishing available, we had it for our customers the same day.). First to market isn’t always best to market.
- Price drops and new products may not be what they appear. Sometimes, a competitor drops prices much lower than the rest of the market or offers a new product that shakes things up. This can spark a bit of panic and create temptation to follow suit for fear of losing customers. By waiting and tracking these changes over time, however, you can gain a much better perspective. Regional promotions, one-time discounts and non-threatening niche products get rolled out all the time. Figuring out whether the change is an anomaly or the new norm is much better information for business decision-making.
- Information ages. At the end of the day, things change. Today’s news will be old news tomorrow, but today’s decisions can have lasting impacts. More important than acting on information as soon as it is received is tracking information over time, identifying patterns and adjusting course accordingly. The best brand competitive analysis is ongoing and used dynamically to influence decision-making.
A better approach
Once you accept that competitor evaluation is an ongoing activity, knowing when to act on it, and when to hold back, becomes much easier. With recognizable patterns established, anomalies become easier to spot. These can trigger some red flags, but those flags should signal a metric needs to be watched, not necessarily acted upon.
If a business is in a position to dedicate someone completely to this task, that is ideal. But these insights aren’t just reserved for a competitive analyst. Every team member, from marketing to sales, and customer success to product development, can benefit from information around what competitors are doing.
Take customer pain points, for example. Whenever sales tells me that someone is switching from a competitor to Sprout, I investigate what’s prompting the change. By tracking enough instances with different customers over time, I’ve learned about the specific challenges customers have with the software they’re using and what features they wish they had access to in a solution.
This cumulative knowledge then makes it possible to identify patterns in the information rather than acting quickly on one individual’s feedback. I’ll then share this data with sales to use when talking to other prospective customers thinking of switching from those competitors. I share it with customer success so they know these customers may be more sensitive to issues they already had with another software. And I share it with product development so that they can seek solutions to any pain points we don’t already address.
This approach isn’t limited to only feedback from potential leads we’re trying to convert. Anyone can stay abreast of competitor pricing and product changes, marketing strategies and more and share that knowledge to be leveraged across departments.
More than just number crunching
Using customer insights to inform a business’s entire team is a perfect illustration of just how much more powerful brand competitive analysis is than people think. It’s about more than just prices and revenue growth; it’s also about evaluating the products, and the people who use them.
- Products: If your competitor sells a product, buy it. (As long as that’s a reasonable option, of course.) Some B2B businesses may have to get creative here, but for those who can get their hands on it, going through the customer experience of buying a product and using it provides great information for comparison to your own. What are the product’s strengths? Does your product share them? What are its weaknesses? Can you use that information?
- Customers: Ultimately, you want to put yourself in the customer’s shoes. If buying the product isn’t possible, or even if it is, look for customer reviews. Check out what they are saying about it on social media. What words are they using? What emotions are they associating with it? Is your business trying to evoke the same feelings, or do you have a different value proposition?
Comprehensive competitor evaluation is ongoing, painting a more accurate picture of the market over time than a one-off snapshot can provide. Ultimately, a business works to sell, but that means there’s someone on the other side of the interaction who needs to be convinced to buy. Taking a watch-and-wait approach to competitor intelligence helps a business better understand why customers consistently choose them over all other options. That allows businesses to more effectively convey that information to prospective customers, and outsell the competition.