At some point, you may realize that to stay ahead and cut expenses, it would be worth investing in automating business processes. Business-savvy people know that before doing this, they should thoroughly study how their competitors do it.
Unfortunately, some companies rush through their initial research — or even skip it altogether. In the best-case scenario, companies perform a basic competitor audit by downloading apps of their competitors and comparing them. But such audits rarely include a thorough analysis of competitors’ digital strategies.
If you want to audit your competitors’ products, it’s important to know where to start. In this article, we unveil important aspects of running an effective competitive analysis .
Who are your competitors?
The first thing to do while tracking your competition is to define who else occupies your niche. Usually, competitors can be divided into two types. The first are direct competitors, or companies that market the same product or offer the same service. The second category is indirect competitors – they offer slightly different products or services but occupy the same industry and target the same audience.
There are several sources where you can find your competitors:
Search results. Take a look at the niche you occupy and evaluate the companies that share it with you. The simplest way to define your competitors is to just google them! Google topics close to your value proposition and identify top keywords for these topics. You can find a plethora of tools for keyword research. Then go through links in Google results.
Paid data. Another tool that will help you define competitors is AdWords. Take the keywords you’ve found and check whether there’s a lot of competition for any of them. If yes, check out which businesses or websites are purchasing ads for those keywords. As you dive into the paid data, you may find the websites purchasing ads are new competitors you weren’t aware of.
Online communities. Nowadays, users often seek advice and recommendations on social media and industry forums. By investigating what your customers are talking about, you’ll be able to further identify your competitors.
Ask your customers. You can also simply ask your customers or consumers in your area about which services or products they use. Word of mouth is usually one of the most effective ways to find rivals. You can use different research methods, such as interviewing focus groups and conducting an online questionnaire.
Besides robust solutions for keyword search, you can automate the whole process of competitor research. Tools like SimilarWeb, Serpstat, and Semrush provide you with useful information about your competitors and their online presence.
Where to find auditable data?
It’s obvious that companies won’t unveil the secrets of their business success. The most effective way to get in-depth market research is to work with an analytics company. Look for a company that fits your budget and does market research for your industry. By working with an analytics company, you’ll get useful insights on your business niche, including information on your direct and indirect competitors.
But such market research will cost a pretty penny, so when you have budget constraints, you can resort to several alternative sources:
Articles in the media can give you insights about competitors’ plans and technology solutions they’ve implemented. For investigating competitors’ strategies, pay attention to interviews. Product reviews are essential for analyzing existing technology solutions.
If your competitor is a publicly held business operating in the US, you can find the company’s annual reports on the SEC EDGAR website. Here you can find useful data about how your competitors are performing after implementing particular technologies.
Competitors’ websites can tell a lot: how competitors talk about themselves, what applications they have, and how those apps help them improve the quality of their services.
Check what information your competitor share with the media. For this, search for press releases.
Customers are another source of useful insights. Check reviews and social media mentions. This is a great way to find so-called “trigger events” that lead customers to look for new products or services.
What digital products have competitors developed?
Once you determine who your main competitors are, you need to focus on analyzing what applications they develop. What specific business challenges do they aim to overcome with the help of these apps? Maybe they want to automate tasks that take a lot of time. Or maybe they use these apps as an additional source of revenue or to attract new customers.
No matter how feature-rich a technical solution is, there’s always one key feature (or a combination of features) that set it apart. Focus on these. For example, say you run a transportation company and want to create a convenient system for your couriers. For this, you can create an app for drivers. Take a look at your competitors: uShip, Uber Freight, and Roadie. Carefully analyze these applications, their features, their fails, and their payment options (don’t worry, we’ve done this for you in our article about carrier app development).
Or say you own a shop with healthy food and have a dream to make your customers healthier. So you come up with an idea to create a diet and nutrition app where your users can not only buy goods but also keep an eye on their diet and get personal diet assistance 24/7. In this case, it’s time to search for inspiration. GrowFit is a great app in this category, and you can check out our case study about how we implemented it.
What are their strengths and weaknesses?
Don’t forget about SWOT analysis, as it can be a useful tool for evaluating your competitors’ strengths and weaknesses. SWOT analysis can provide invaluable insights and help you outperform the competition and help you investigate.
But in order for this analysis to be effective, you should remember that it’s designed to boil down to a set of complex business processes to solve big issues. It’s important to keep this in mind, as it’s precisely where the disadvantages of this method come in. Dave Lavinsky talks about these disadvantages in detail in his piece for Forbes, but the general rule of thumb when working with SWOT analysis is the following:
Figure out what has been working for you (strengths and opportunities, in SWOT terminology).
Concentrate on things that have worked for you and focus on improving these areas of your app’s performance even more.
First target your opportunities, then try to outperform your competitors in the areas where they’re stronger.
If you need some inspiration, here’s an example of an analysis we did for a marketplace app.
[SWOT analysis made by Yalantis]
How have technology solutions affected their businesses?
Try to find out from annual reports and publications on media sources what your competitors have achieved by implementing a certain technical solution. Do they plan to make another application to cover their business needs? What does the media say about their efforts?
If an application serves consumers, check reviews on the Google Play Store and App Store.
Also, study the monetization models of your competitors and learn where most of their revenue comes from. Determine if the price of your competitors’ apps is in line with the average on the market, below it, or above it. If it’s above what everyone else is asking for a similar service, try to figure out what additional value proposition justifies this higher price (or perhaps you won’t find a justification.) It’s important to understand what price is already accepted for a certain product or service, and auditing your competitors’ apps will give you a benchmark. Let’s say you’re developing an app that serves as an intermediary between a customer and a service provider. One of the features your app offers is posting job openings. How can you know how much to charge for it? That’s where looking at what similar services charge will come in handy.
What is their online presence?
Learn about your competitors’ acquisition channels and find out how they retain users. In the world of offline goods and services, this would be the stage when you have to consider available distribution channels. For mobile apps, look at what your competitors do to make their apps easily accessible. Do they invest in App Store Optimization (ASO)? You can use a number of tools such as SimilarWeb, Mobile Action, and Sensor Tower to perform ASO and gather analytics about the performance of your competitors’ apps.
How do they market themselves?
Find out if your competitors are connected effectively with their target audiences. What methods do they use to communicate with their customers? Do they use social media marketing tools? To answer these questions, you should analyze your competitors’ social media accounts, content marketing strategies, and websites.
It’s important to understand how well your competitors are using social media to promote themselves and acquire users.
How is analyzing social networks going to help you outperform your competitors? What content strategy do they have? If you learn which topics they discuss and which channels they use to acquire users, you’ll have a better understanding of where you should focus your efforts. It’s always easier to beat your competitors if you know where their target audience can be found (do you have to promote your Facebook group or send out emails?), what keywords your competitors rank for, and so on. For instance, the leading shipping marketplace uShip uses Twitter for not only informing users about important changes in the company and product, but also for resolving complaints.
The main function of an audit is to analyze your competitors’ digital strategies in detail. As a result, after discovering how to perform a local business audit, you’ll see strengths and weaknesses in your own strategy and will have a clearer understanding of how it should be developed and what should be changed in the future. If you properly audit your competitors’ apps, you’ll have the knowledge it takes to develop a mobile app that can best the competition on their home turf.