If you think you know who your competition is, you may be in for a surprise. The real competition is usually beyond expectations. If you ever dig deeper, you will likely reveal hidden competitors who are actually stepping on your toes. A thorough competition analysis allows you to recognize your true rivals and avoid tilting against windmills. In this guide, we will have a look at different types of competitors, and we will find out how to spot them and how to learn from their marketing tactics. This discussion will help you run more efficient marketing campaigns and stay on top of the competition.
Before we get into the nitty-gritty and learn how to identify your competitors, let’s have a look at how researching your competition benefits your business today.
Advantages of knowing your competitors
You can learn from someone else’s mistakes. By looking at your competitors’ performance, you can get an insight into what works in your niche and what doesn’t. This not only saves you tons of time, energy, and money but also gives you access to dozens of excellent success cases to follow.
You realize how you are unique. By analyzing your competition, you can better understand your unique selling points and leverage them to deliver clear value to your customers.
It keeps you vigilant and creative. Persuading yourself that you are untouchable and beyond competition may lull you into complacency. However, accepting the fact that you are in a highly competitive environment sobers you up and pushes you to play your A-game.
Types of competitors
Your real competition is much greater than you probably think. Most businesses never have trouble identifying their direct competitors. But who is lurking in the blind spot? Let’s take a closer look at all types of competitors every business should be aware of.
Direct competitors
Your direct competition are companies that offer the same products or services as you do and target the same audience. For example, McDonald’s and Burger King are direct competitors because they both sell fast food.
Indirect competitors
If you sell fast food like McDonald’s, you have to reckon with companies who sell other types of food but target the same customer segment and meet the same need (in our case, it’s hunger). For example, Domino’s Pizza and all other brands that sell pizzas (tacos, burritos, whatever) will be your indirect competitors. You offer different products but the same set of benefits (tasty, fast, affordable).
SERP competitors
These businesses may sell totally different goods, but they will compete with you on search engines by using the same search keywords and diverting your customers’ attention (and traffic) away from your brand on search results pages. For example, if you are a house cleaning service, you may compete for the same keywords with manufacturers of house cleaning supplies and equipment or even a high-traffic blog that specializes in household life hacks and cleaning tips. Your paths in real-life marketing may never even cross – although some of your SERP competitors might be your direct or indirect competitors – but once your business hits the internet, you have to respect your SERP competition.
Potential competitors
A business that sells the same thing as you do to the same audience, but not (yet) in your area, is your potential competitor. Whether they are threatening to enter your market in the near future or not, it’s always a good idea to keep an eye on them, at least for the sake of learning from their marketing strategy. So, if or when they are ready to enter your specific market, you’ll be prepared.
Future competitors
Found somewhere between your potential and direct competition, future competitors are companies that are going to enter your area with the same product and take a bite out of your slice of the pie. Make sure you are ready to meet them face to face!
Replacement competitors
Ask yourself, Is there any other solution to the problem you are solving with your product? If yes, pay attention to the companies that offer such solutions. They may become your replacement competitors. A replacement competitor isn’t easy to identify as they provide a product that doesn’t directly or indirectly compete with yours. Still, it addresses the same pain points as your product (maybe even more efficiently). For example, an e-reader is a replacement competitor to physical bookstores. Researching your replacement competition is vital as this keeps you open for innovations and future challenges. However, if you don’t manage to keep up with the competition, you may fall out of the loop very soon.
Each of these competitor types can potentially sneak away with your market share right from under your nose. Understanding who your competition is, and who it isn’t, can help you build a strong marketing strategy and prevent your business from becoming your competitors’ cautionary tale.
At this stage, you may be a bit overwhelmed. But don’t let that scare you off! Following the simple steps described below will allow you to sift through the companies in your niche and detect those you should get a bead on.
How to identify your competitors
Do your market research
Your competition research starts with your own product. Once you know your product’s key features and the benefits it provides, you’ll be able to detect other businesses that come up with similar products meant to satisfy the same needs. Ask your salespeople about the brands they often come across in their work. When you take a closer look at these direct competitors and compare your product to theirs, you will notice the unique points that determine your place in the market.
Ask your customers
Your clients may know about your direct competitors better than you do because deciding between your product and your competitors’ is what they do so often. Just ask your customers in social media which other brands they usually consider when buying a product like yours. Their answers may surprise you.
Analyze Google/Bing SERPs
Google-searching your keywords is the easiest thing you can do to identify the direct competitors in your area. If you were a customer, you would look for a product or service by typing its name and the city name in the search bar. For example, “house cleaners NY” or “home cleaner in New York,” or “home cleaning New York.” The first ten companies you will find on the search results page, including those featured in the ads, will likely be your top competitors.
Use social media and forums as data sources
Since social media have a powerful impact on the buying decisions of millennial and Gen Z customers, social networks and community forums have become ideal places for you to obtain the latest data on your competitors. Simply scour Facebook, Reddit, Quora, Twitter, and other media outlets, using keywords from your keyword research, and you will be able to eavesdrop on what your customers’ buying options are. This is one of the easiest ways to discover your direct and indirect competitors.
Do keyword research and leverage paid data
To identify your SERP competition (publishers, organizations, and businesses that are competing with you for the same keywords), you will need to conduct comprehensive SEO research. You can start by analyzing Google’s results pages to find out what companies out there use your keywords. For example, let’s say you are a house cleaning company that specializes in deep house cleaning. When your potential customers search for “deep cleaning,” they may as well stumble across websites of car cleaning services, manufacturers of cleaning equipment, and even dentists.
Another source of information about your SERP competitors is AdWords, where you can check which businesses buy ads that feature your keywords. There’s also a wide range of SEO tools you could use to spy on your SERP competitors. The more data you acquire, the more efficiently you can wage your SEO wars against your competitors.
Takeaways: Learning from your competitors
Getting to know your competitors face to face can be intimidating, but the good news is that you don’t have to battle against all of them. Instead, you can choose which battles you want to take on.
Direct competitors. By looking at their social media, you can see what they do. If you locate gaps in their content or strategy, try to get around them. Don’t forget to learn from paid data: keep an eye on keywords they use in their online advertising campaigns (this works for indirect competition as well).
Indirect competitors. In your sales and content strategy, emphasize the differences between you and the competing product. Target keywords that are specific to you.
SERP competitors. Avoid over-analyzing and over-competing. Focus on direct competitors who outrank you by only one or two positions. Use SEO tools to spot more specific keywords that are less competitive to differentiate yourself from the irrelevant competition.
As the market landscape changes, you should do your competitor research at least once or twice a year. The more you monitor, compare, and analyze the differences between you and them, the easier it is to create true value for your customers.