Updated 21 April 22
Competitor analysis is often one of the most overlooked activities by founders at the early stage and that's understandable, kind of. It's easy to avoid looking at the competitor landscape. Sometimes it's not nice to think there's another company out there with a similar idea to yours.
It's also difficult to know what to look for when doing competitor analysis. There is quite a lot of information you could gather. Some of it useful, some of it not so. It's not as simple as separating the wheat from the chaff. This task requires an analytical mind, and an understanding of what information will help you and your startup.
In this blog, I'm going to talk through what the marketing team at Nova look for when doing competitor analysis and what tools are useful for gaining important competitor insights.
Sometimes as a founder, you're in a fortunate position to have absolutely no direct competitors at all. Your vision and your business idea are unique. In this case, you will still have companies operating in a similar vertical that you can assess. For example, at Nova we have Teacherfolio - a platform where teachers can upload their CVs and portfolios of work, such as lesson plans. Schools can then recruit them based on their profiles. There are no direct competitors for Teacherfolio, so when doing competitor analysis, we looked at how education recruitment companies work with schools that are recruiting.
In most cases though, you will have some competitors that offer a similar service but they don't have the USP that you do. Competitor analysis is not a quick task. For someone who has been doing it for a few years now, it takes me about 3 working days (a full 24 hours) to look at 5 competitors.
It's up to you to decide how many you would like to analyse, but 5 is often a good start. You want to have a mix of similar size competitors, perhaps those that have started in recent years that operate only in one geographical area and then a couple of aspirational competitors. From the latter, you will see the type of marketing they do and perhaps be able to take some good ideas from them.
One of the most important things to find information on at the early stage is your competitors' profiles and products. This will allow you to position your product or service into the sector in a unique way. The elements that are important to find out are:
- What is their service offering or product profile and what does it do?
- When were they established?
- How much funding have they received to date and over how many rounds?
- What is their unique value proposition in the market?
- What is their business model and pricing - who do they charge and how?
- What traction have they got? (How many users or clients?)
- What is their marketing profile and how do they position themselves in the market?
- Who is their target market?
- What marketing channels are they using?
- What distribution channels do they use? E.g. is it web or app-based?
- What are their strengths, weaknesses, opportunities, and threats?
A lot of the above can be found out by doing a lot of different searches on Google. You'll be surprised how much information you can find out about a company just from a few different websites such as Crunch Base or Companies House in the UK.
Next, you want to look at how your competitors rank on Google and other search engines. If you've found that any of them are heavily involved in producing content on a regular basis, chances are they are looking to improve their SEO performance. SEO is when a company uses content to appear on the first page of the search engine results pages (SERPs) without having to pay for ads.
To look at how your competitors are ranking in the SERPs for both organic and paid means there are several great tools at your disposal, including UberSuggest, SemRush and Similar Web. All of these tools have free daily search amounts so you can find out a lot of information about the type of traffic (paid or organic) that your competitors are receiving, how much per month and for what keywords.
That brings us nicely into backlink research. A backlink is like an internet vote of confidence. If your website receives a backlink from a reputable website like forbes.com or ft.com that has a positive impact on your domain score and will push that page of your site higher up the search engine page.
Doing backlink research allows you to see from which sites your competitors are receiving their 'internet votes of confidence'. It provides you with information on the sites that may be interested in your business idea and content in the future. Neil Patel, an SEO expert, offers a fantastic backlink checker where you can receive 100 backlinks per site for free and export a CSV file. You'll also receive information about the domain authority of the site and the content it relates to. It's kind of an easy win.
It's useful to look at what posts your competitors are releasing on their social media channels and to what regularity. How many followers do they have and who are they? Could you follow their followers perhaps and then their followers become your followers!? Sneaky.
You'll also want to know if they are running any ads on social media. If they are, and they have been doing it for a long time, it's a good indication that it's a channel that works for them. Only some platforms allow you to check this. On Facebook, head to your competitor's page, scroll down until you see page transparency. In the pop-up, it will tell you if they are running ads. Click on the button to see exactly what ads they're running and for how long they've been running them.
On LinkedIn, it's even easier. Once again, head to the page of your competitor, click on posts and then underneath, click on ads.
Finally, organise it into a document you can refer back to at a later date. I prefer a spreadsheet where I can list my competitors along the top, and everything I've found in separate rows. Write a summary of each competitor and what you've found overall. Write notes on the channels they've used and how you may be able to use them too. Look again at their strengths, their weaknesses, the opportunities for you, and what threats they pose.
With all of this information, you can leverage it in any future marketing plans. You can use the keyword research for content and paid search campaigns. You know more about the channels they're using, their messages, followers and content.
By the end of it, you'll be glad it's over - it's a lot of reading, interpretation and analysis but you'll have a much deeper understanding of the sector you're operating in and you'll be able to better spot the opportunities within it.