How do you monitor your competitors?

In my experience we need to broaden the idea of “competitors” to be “alternative to your offering”. At times your competitor will be another company that you can easily identify. Other times, it could be an up-and-coming product or service that you don't perceive as a competitor, but it provides your existing and potential customers with a solution to the same problem you're addressing. Additionally, we often fail to recognize the "status quo" or sticking to the way they’ve always done it as a competitor. All of these are potential reasons a customer might not choose you. When you are tracking you should be aware of them all to build a well rounded value proposition that is actually customer focused.

Competitor monitoring can inspire innovation and creativity within your organization. By observing your competitors' strategies, products, or marketing campaigns, you can generate new ideas, identify gaps in the market, and drive continuous improvement. Competition leads to innovation!

If something is working in your industry, naturally you're going to want to do that. Monitoring competitors is an easy way to do this. However, beware of what they declare, because businesses are always going to portray themselves in the most positive light. Monitoring is good to keep on top of trends and see what customers actually need and have requested from others.

Monitoring your competitors provides valuable information on opportunities for innovation. Stay open minded on the universe of who is your “competitor”, and include newcomers and broad similars. Ask your customers honest questions about who they see as your substitutes. Often big companies will have departments that buy roughly the same products or services from different vendors at widely different price points.

Did you know that the biggest competitor of Airlines during the great recession was Skype? Identifying the competitors is not as easy as it looks. You might think about your competitors as the ones who are in your industry making similar products/services but no that's not how it is done. Your competitors are the ones who: - are solving the same problem as you are. - are catering the same audience in line with the first point. Another such example is Chegg and OpenAI (our lovely ChatGPT). Chegg almost lost 64% of it's valuation in the past 6 months after the ChatGPT became famous.

It’s definitely important to understand who your competitors are, but if you follow the advice I gave above and look at “alternatives” to your solution you will uncover more competitors because you are focused on the problem and not just the outward appearance of competition. One of the best lessons I learned when I was consulting was to ask two questions when you’ve identified your niche or customer. 1) Do we want to compete for this company’s/niche’s business? 2) Can we effectively compete with our solution and win this business? This usually works out to be a series of sub questions for each but it allowed us to more accurately understand a customer problem, whether we truly fit, and who and what were considered alternatives.

Don't forget to pay attention to your customers' choices and preferences. Identify products or services that are considered alternatives to your offerings. Assess customer reviews, testimonials, or feedback to understand who else they are considering or purchasing from. That's the best way to identify your customers.

Competitors are not necessarily those who offer the same products/services as you, but they are the ones with the same customers. For example, we design and build WordPress websites, as many other agencies do. But they're not all our competitors. This is because we work with clients who want to lower their digital carbon footprint, as we build low-carbon websites. We also work with a lot of purpose-driven businesses. Many WordPress developers build using templates and themes and so would have a completely different customer base. Your competitors are the ones who would have the exact same customers as you.

You need to analyse the correct aspect for the stage of business you are at, for example in pre seed you’re concentrating on the product because without it, you don’t have a business. As you grow you start looking across more areas. You do have to think holistically throughout though, while Patrick and I were benchmarking our product, we were also concentrating on branding and what that looked like compared to the market, that then leads to communication and how you present yourselves. It’s all interconnected but don’t try and attack everything at once, pick what’s most important at the stage you’re at and then follow the path ahead.

There are ethical and legal considerations. It is important to remember that the rules are going to vary by country and by industry.

If your product is unique, look for similar products that your ideal client is buying. There is always something out there that you can relate too and can be helpful to assess the potential competition.

Consider conducting sentiment analysis on your brand and competitors. A sentiment analysis tool analyses text conversations and evaluates the tone, intent, and emotion behind each message. Understanding market perception can help you be proactive about your brand presence and tackle any reputation issues. Tools like Meltwater, HubSpot, and Brandwatch are just a few sentiment analysis software.

Replying to Yekemi's comment above. While sentiment analysis is useful, it is a relatively blunt tool and I have serious concerns about it linked to language and suggest taking results with a serious pinch of salt. Most sentiment analysis tools are trained using American English datasets and that bias is carried into the tool. This means that differences between high and low context cultures and languages isn't compensated for. Even cultures such as the UK and the US which are generally regarded as closely aligned have massive differences in the way they use language and as such terms that could be regarded as negative in the US could be regarded as positive in the UK, and vice versa. As such your analysis is impacted.

Your mental health is the most important thing at the end of the day. If monitoring them makes you stressed out, it’s ok to skip out sometimes. It’s not the end of the world if you don’t know every single thing they’re doing. Another alternative is to have somebody else on your team be in charge of this, so you don’t have to be so personally immersed!

I have found that most competitors have a unique niche that they serve. They have usually mastered the niche and are often willing to speak about it. In my case, I made it my business to meet with each one personally and found they were very keen to discuss what they did to be successful and share the uniqueness of the niche they serve. Lastly and most importantly, they shared precisely what types of businesses and or niches they did not want to serve.