Join the Esme experts to find out what competitor research means and why it’s crucial to regularly conduct it. We’ll also share our top 4 ways to perform competitor research and gain insights that can help your business achieve success.
Understanding your business’ competition can help you prepare and identify gaps in the market to grow your business. A lack of competitor research could do the exact opposite.
What is competitor research?
Competitor research is when you actively identify other businesses who offer a similar service or product to you – brands who your customers could be choosing over you.
Your business’ competitors will fall into one of two categories, direct and indirect.
A direct competitor is when another business is selling a service or product that is essentially the same service or product as your business.
An indirect competitor is a business that sells a different product or service that can satisfy consumer need in a similar way.
For example, if you were looking to open an Italian restaurant in Edinburgh, your direct competitors would be other Italian restaurants in Edinburgh. Your indirect competitors would be all restaurants in Edinburgh, as they would satisfy a consumer’s desire to eat out.
Why is regular competitor research important?
Competitor research can help you to identify your business’ unique selling point and whether there is enough demand for your product or service in your market.
Continuously monitoring your competitor’s successes, failures and investments in their business can give you an indication to how the market is going and how you can best prepare and grow your business. It can also offer guidance in terms of pricing your product or services accordingly to maintain a competitive edge.
How to perform competitor research
It’s important to choose a method of competitor research that will provide the greatest level of detail and practical information you can use to inform your business’ strategy.
1. Online Research
Performing a simple search on Google can give you an idea of who your competitors are – especially ones that are ranking above you in Google search results. When searching in Google, it’s important to use terms that relate to your product or service that a customer may use.
To use the Italian restaurant example from earlier, you could begin by searching ‘Italian restaurant in Edinburgh’ to provide your direct competitors and search ‘restaurants in Edinburgh’ or ‘Places to eat in Edinburgh’ to find your indirect competitors.
Once you’ve discovered your competitors, it’s time to dig deeper and understand how they are setting themselves apart from the competition, strengths and weaknesses, pricing, social media activity and overall digital strategy. With this information, you may be able to create a marketing strategy to stand out and give your business the edge.
2. Google Maps
If you trade from premises, you can identify some of your nearby competitors through Google maps, using your business’ keywords
See an example below:
It’s important to register your business with Google maps in order to compete with competitors and appear in Google when someone searches for a service or product that relates to your business. You can set up a Google My Business page in a few simple steps here.
3. Customer research
Whether you’re looking to start your business or scoping the market ready for an expansion, customer research can be a useful way to get insights on your target audience and competitors. You can undertake customer research online or in person depending on your budget and target audience. Your research should include a series of questions designed to provoke honest opinions from the consumer and provide constructive feedback.
In order to get useful competitor research, your survey should look to include some of the below (if applicable):
4. Customer Feedback
A quick and affordable method of carrying out competitor research is to ask your previous customers for feedback about your rivals. This method is particularly beneficial to existing business as you can also ask them how you can improve your service and ultimately stay ahead of competitors.
You can also ask if they thought about using other businesses before choosing yours, allowing you to gain an understanding as to why you stood out to the consumer and how to appeal to the similar target audience
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