No matter where you sit in your organization, it helps to get out of your head from time to time and assess what the competition is up to.
Every successful business has competition. And at the very least, your business has competition with resale, Amazon, ripoffs, etc. Every 3 months, I recommend that all businesses take stock of who their competitors are, and what they’re up to – no matter how subpar they appear to be.
Let’s talk about how broad competitive analyses can fit into one’s overall thinking around conversion – and how to translate competitive analyses into revenue-generating test ideas.
Auditing the competition
First, you need to find as many competitors as possible. I start by finding as many of the usual suspects as I can through Google.
Here’s what I look for:
- The industry you’re in “key carriers”
- The category you’re in (“everyday carry”)
- “[product name] alternative”
This usually gets the vast majority of use cases, but I also try to augment this by polling people. Post-purchase surveys and one-off customer interviews should explicitly ask what competitors someone considered before going with you.
In addition to the actual businesses you’re competing with, there are many others, including:
- ignorance of the problems that the product addresses
- pen & paper solutions, if you’re selling software
- DIY’ing/custom hacks
- IRL marketplaces
- web-based marketplaces like Etsy
- resale capacity (check Craigslist or eBay)
- your own product’s durability: people may buy it once in a lifetime, say
You should audit and analyze these as if they’re established businesses. Why? Because people are still considering them as alternatives to your product – and they act as solid objections to address in any marketing pitch that you test.
Let’s say you sell directly to consumers or small businesses. Do enterprise customers care about your product? Probably not. More likely, they’ve chosen to embrace a competitor of yours that sells directly to the enterprise – think Jira vs. Pivotal Tracker vs. GitHub Issues, or a small furniture manufacturer on Etsy vs. office-focused solutions by e.g. Herman Miller or Steelcase.
Amazon warrants its own section, obviously
Pretty much every store owner reading this is competing with Amazon. If you aren’t on Amazon, then you’re competing with free 2-day shipping on what amounts to Google for physical objects. You can manifest those objects in your home like they’re magic. And third-party sellers can buy your product in volume – or straight-up rip it off – and capture the majority of customer volume.
The current ecommerce model – incorporating shipping charges after add-to-cart, shipping in any amount of time over 2 days, and not sharing billing & shipping information from merchant to merchant (Shopify Pay addresses this somewhat, but it’s too little too late and inconsistently implemented for the customer) – is too antiquated to fare well for conversion ever again. The rules have changed because Amazon has dictated them.
If you are on Amazon, you may think you don’t have this problem. Bad news: you’re still competing with Amazon. You probably have your own store in addition to Amazon, and it benefits you significantly to conduct purchases through your own store instead of Amazon. You get a litany of customer information and considerably higher margins from your own store. Meanwhile, Amazon comprises the lion’s share of your total sales volume.
Ditching Amazon isn’t the answer, because then they get license to play hardball. Providing a better experience than Amazon is the answer – because convenience and price always win.
So yes: if you sell physical goods, you absolutely need to list Amazon as a competitor, no matter what. And you need to come up with a comprehensive strategy for taking Amazon on. Or they will win.
Rule #1: Take all competition seriously
Now that you have your list of competitors together, you might be likely to prioritize them by how imperative you think it is to specifically compete with each of them.
And you might be right! It may be that you come up with the perfect sort on this. But you’re probably wrong – and you’re probably wrong about something major. You simply haven’t gathered enough research to do anything but take that whole list seriously.
Businesses get disrupted when they fail to take their competitors seriously – especially when those competitors look “downmarket” or shabby. They’re playing a different game, they’re probably just as smart as you are, and you need to act accordingly.
So, rule #1 is, now and always, to entertain what appears, to you, to be ridiculous. Because it may not be – now, in 3 months, or when it’s eventually eating your lunch.
The way you should determine the seriousness of competitive threats is through SWOT analyses.
“SWOT” stands for strengths, weaknesses, opportunities, and threats. It’s a dumb 2x2 MBA-101 matrix that is easily provided as a flat listing. Run a SWOT analysis on all competitors, then run one on yourself for good measure. That Wikipedia page should tackle what you need to list, but here are some good things to know:
- Strengths & Weaknesses are intrinsic; Opportunities & Threats are extrinsic.
- You’re going to come up with a bunch of redundant things to list for many companies: for example, poorly listed shipping terms may apply to the majority of your competitors.
- Analyses need to consider the particular markets your competitors are working with – which, as mentioned, could be mutually exclusive from your own.
- Threats are not only their most acute competitors, but also their most damaging extrinsic market forces.
Audit as many of these as possible for each of your competitors and your own business, and throw ‘em all in a giant spreadsheet.
Once you have your research together, it’s time to synthesize it into new test ideas. You can typically use competitive analyses towards the following ends:
- Reworking your pitch to audit objections that customers may have in light of your competitors.
- Creating landing pages that specifically address competitors (sometimes even by name!) and promote your product as an alternative.
- Addressing objections on pricing & signup pages.
- Bolstering further research for customer interviews, confirming (or denying!) any particular objections people may be experiencing as they examine alternatives and make a purchase
Competitive analyses are great for shaping and bolstering the arguments set forth by your additional research in surveys and customer interviews – both of which are foundational components of any conversion-focused design strategy.
Competitive analyses take about an afternoon to conduct, and another day or so to synthesize. They work really well when you can get the rest of the team involved in brainstorming competitors and performing SWOT analyses. If you can get folks in person, covering walls in Post-It notes, that’s best – but you can also run a group video call and shared spreadsheet, if your team is remote.
Move the needle. Act without fear.
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