How can you measure the ROI of competitive analysis?

1 Define your objectives

Before you start any competitive analysis project, you need to have a clear idea of what you want to achieve and how you will measure it. What are the specific questions you want to answer, the hypotheses you want to test, or the problems you want to solve? How will these relate to your product vision, value proposition, and target market? How will you track and report your progress and results? By defining your objectives upfront, you will be able to align your competitive analysis with your product strategy and focus on the most relevant and actionable information.

2 Choose your metrics

Depending on your objectives, you will need to select the appropriate metrics to measure the ROI of your competitive analysis. These metrics should reflect the outcomes you want to influence or improve with your research and insights, such as customer satisfaction, retention, acquisition, conversion, revenue, market share, or brand awareness. You should also consider the baseline and target values for each metric, as well as the timeframe and frequency of measurement. For example, if your objective is to increase your conversion rate by 10% in six months, you will need to measure your current and future conversion rates on a monthly basis.

3 Collect and analyze data

Once you have your objectives and metrics, you can start collecting and analyzing data from various sources, such as market reports, customer feedback, competitor websites, social media, reviews, surveys, interviews, or experiments. You should aim to gather both quantitative and qualitative data, as they can complement each other and provide a more holistic view of your competitive landscape. You should also use reliable and valid methods and tools to process and interpret your data, such as statistical analysis, SWOT analysis, benchmarking, or perceptual mapping. You should look for patterns, trends, gaps, and insights that can inform your product decisions and actions.