You think you know your competitors? Think again! In today’s article, I will test your ability to understand your strategic opponents… and, show you how to perform a successful Startup competitor analysis so you can always be one step ahead of the competition.
During my experience as a Marketing professional, I have come to observe that a surprising number of companies underestimate the power of keeping an eye on the competition. In fact, I’ve had a Marketing director tell me that there is no need to observe competitors because things change so quickly.
And you know, he is right. In today’s dynamic markets, changes happen a lot faster than before.
However, what will happen if you ignore the companies that want the same piece of cake as you? That’s right. You get into a really risky position of getting delusional with your achievements and weaknesses.
For this reason, I wanted to share some strategies on performing a Startup competitor analysis from 3 different perspectives. Marketing, Product, and Pricing.
And because I don’t like generic advice, we will spice things up with some of my personal examples. In addition, I will provide you with some templates that I like to make when I study the competition. Let’s go!
Step 1: Identify your competitors
First, you can’t really start your startup competitor analysis without identifying who your competitors are. And of course, where do they live on the Internet.
Let’s say that you are a startup that is working its way towards becoming a mobile bank.
During this stage, you really want to know your competition to see what is your relative position on the market. And of course, to help you find a competitive advantage that will help you stand out.
Finding your competitors with Google
Because your core business is identified by the keyword “mobile bank” (or another one, of course, this is just an example), let’s go ahead and type this keyword in Google.
There are my results for the keyword “mobile bank”. And, as you can see, I already have my first two competitors. But it gets a little bit more complicated than that:
- When selecting your competitors, always take into account the country and the language that you are typing in. Of course, if you are a business that sells digital products or services, your main competitors can easily be from other countries outside your target. So, don’t necessarily exclude them – because they still might grab a piece of your market.
- First, select the keyword/s that describes your company the best. This will help you identify your direct competitors. Then, type this keyword in Google, and write down all companies that appear on the first few pages. Generally, it will be the first three pages, but you can analyze as many as you consider relevant to your business.
- To refine your search and make sure that you are not missing out on any competitors, use tools like KWFinder and AnswerThePublic to discover as many relevant keywords as possible. Then, repeat the search and write down all companies that appear between the first results of the search engine. In our example, possible keywords that could reveal additional indirect competitors might be “digital banking” or “online bank”.
This exercise is great for identifying competitors that are competing for the same keywords as you. This way, you will be able to optimize your Search Engine Optimization in a much more efficient way.
Discovering competitors with LinkedIn
Another amazing tool for discovering your key competitors is LinkedIn. It’s also quite simple to use!
Think of a competitor’s company name, go to LinkedIn’s search bar, type it there and open the Company page. In our example, I thought of the online banking company N26.
At the Home tab of the Company Page, scroll down a little bit until you get to the section Similar pages:
And voila! You already have LinkedIn suggesting competitors for you without complicated research.
Step 2: Startup Competitor Analysis from a Product perspective
At this stage of our Startup competitor analysis, we will take a profound look at how companies can take advantage of understanding their competition’s features, products and functionalities.
To explain it better, I did an example for a company that provides digital payment services to other businesses. Here is how I did it:
- On the first line of the Excel file, I put the names of the companies that I will be analyzing.
- For the left-hand column, I visited the website of each competitor, and wrote down their main features, functionalities and products. Every time I visited a new website, I added more rows so I could have them all at a simple glance.
- Now comes the fun part! Go ahead and add a √ symbol each time a company has the mentioned feature, and the Χ symbol if the company doesn’t have the mentioned feature.
To avoid visiting each website two times, I like to start with the first company, add all its products and features, and add the √ symbol to each one of them. Because I took them all from the first company’s website.
Then, I move on to the second one, repeat the process, and so on. As a result, I end up with a simple and visual overview on how each company is doing on the Product/Tech side.
As you can see, I mark a row in orange if all companies happen to have the same exact feature or product. This helps me see that we shouldn’t rely on it if we want to obtain a competitive advantage.
On the other hand, if I see that there is a feature that many companies have and we don’t, it’s usually a sign that we are missing out on something important.
And last but not least, if I see that there is a rare feature that only one company has out of all competitors, it could mean two things:
- It is a sign of an important competitive advantage that we might be missing out on;
- Or a new feature that they are testing but hasn’t proven its success yet. In which case, it’s always a good idea to keep an eye on how it develops because it might be the next big thing.
I will leave a link to download the template in the end of the article, along with the others ones.
Step 3: Analyzing your competitors from a Marketing perspective
The next point of view for our startup competitor analysis is looking at it from a Marketing perspective.
For this exercise, I’ve analyzed my competitors looking at their:
- Social Media efforts;
- Search Engine Optimization strategy;
- SEM & other digital ad channels.
1. Social Media
For a starter, I went ahead and did an analysis on the social media presence of my competitors.
What channels are they using to gain visibility on the Internet? Are they trying to reach as many social media platforms as possible, or just focusing all of their efforts and resources on the key ones?
As a bonus, the number of channels and the quality of their content can also give you an idea on the company’s resources. And most importantly, the priority and importance they give to social media.
I will not enter into much detail with this table, it is quite simple and self-explanatory. However, it gives you a nice and neat overview of the current social media background for your market. You can add or remove as many columns as you consider relevant to your sector and business activity.
When researching my competitor’s social channels, I also like to pay attention to the engagement of their followers with their company to get a hint on their performance.
Another aspect of your competitor’s social media presence is their frequency of publication. Are they actively trying to build an audience and engage with their followers by publishing frequently? Or they are rather irregular? Which are their most active social channels?
As you can see from my example, almost all companies have some social presence, but their behavior differ from quite frequent to very irregular. In any case, it is always a great idea to keep an eye on your competitors in every aspect of their digital presence. Usually, it doesn’t take that much time as you would normally expect to.
2. Search Engine Optimization
Having a good visibility on Google is extremely important for developing a successful Digital Marketing strategy. According to Google Search Statistics, Google processes over 4.5 billion searches every day!
This means that, when people are looking for something on the Internet, they are probably searching for it on Google. So, you will have to be on Google if you want to maximize your traffic potential.
However, your search engine positioning will also depend on your competitors and their SEO efforts.
To find and analyze your competitors in terms of SEO, do the following exercise:
- Identify potential keywords using the tools that I mentioned earlier in the previous section;
- Type them one by one in Google and open the results in separate tabs.
- Now, copy the link of the website that you want to analyze, and paste it into a website competitor tool.
Personally, I like to use SemRush (affiliate link), because it allows you to perform a complete SEO analysis on keywords, backlinks, and other aspects of organic positioning. However, you can also try other tools such as Ahrefs, Moz, and KWFinder.
On top of that, you can also use Google’s free keyword research tool to paste the link of a competitor’s website and see what keywords they are positioning for.
And last but not least, don’t forget to check the blog! It is a key element of any SEO strategy.
You will find the template at the end of the article.
3. SEM & Digital ad channels
Having an eye on organic efforts is important, but understanding the paid strategy of your competition is even more important.
There are a few ways that you can do that.
You can check your competition’s strategy on Google by doing a couple of simple exercises.
To see if they are making search ads, just type the keywords that you want to position for, and see what ads appear on the first pages:
Keep doing this exercise in different days of the week and different times of the day. This way, you can see the keywords that they are bidding for, but also if they are appearing more at certain days or hours of the week.
For banner ads, you can visit a display tool such as Adbeat, type the domain of your competitor, and check all the ads that appear.
This year, LinkedIn introduced a new tab called Ads to all Company Pages. It allows you to see all the ads associated with a Company page for the last 6 months. With this tool, the social platform aims to promote transparency for all advertisers.
To use it, just go to the Company page of your competitor, and click on the tab Ads:
Step 4: Analyzing your competitors from Pricing perspective
And last but not least, one of the most important aspects when it comes to Startup competitor analysis, and any competitor analysis in general, is Pricing.
Of course, not all companies have their prices transparent and published on their website. In this case and when I consider that a competitor is highly relevant, I contact them presenting myself as a potential customer interested in their product or service.
Just a little tip: if it’s possible, do not contact companies from a gmail account. Especially if you are in the B2B sector – it doesn’t seem very legitimate, and you might not receive a response at all. Whenever possible, try to reach them out using a professional email. Even if that means asking a friend to do that for you as a favor. 🙂
Now, to the pricing. In the startup world and especially in SaaS companies, pricing is usually based on a Subscription model or/and a Pay-per-Use model. In our case, we will focus on Subscription models so you can get a general perspective on how to build your Excel.
Let’s imagine that you are a company that sells communication services, such as phone support software and apps for call centers. Your Pricing sheet might look something like this:
In Subscription models, many companies will make you a discount if you are paying annually. Which is a great strategy to ensure that you will stay as a long-term client. For this reason, it is important to specify if prices vary depending on whether you will be paying monthly or annually.
Additionally, I’ve added other things relevant to the price that will help us understand the pricing differences from company to company. Information like the features that come with each plan, the minimum/maximum number of users, and whether there is a free trial or not are a great way to put yourself in the mind of the customer and try to make an informed decision from his perspective.
We all know that price is not the only element to consider when making a decision. Which competitor gives the better product in relationship with the price? Who provides the highest value? Is there a free trial to reduce pressure and give the customer a taste of the service?
You need to be asking yourself these questions to better understand your current position on the market.
Step 5: Conclusions from your Startup competitor analysis
Now that you’ve conducted your investigation, it is time to make the final conclusions and see where you are at the exact current moment. Maybe you will find out that you are doing better than what you expected. Maybe you will find out that you are falling behind your competition in many (or in the most important) aspects.
No matter what you discovered, be honest with yourself. Are you growing at the same pace as your competitors? What are your strengths and weaknesses? Where is it that you want to be? Take your time to make the right conclusions, and work smarter to become better every day.
And, as promised, here are the free templates that you can download. If you are having troubles with the link or have any questions, let me know in the comments below!
I hope you liked my article on how to perform a startup competitor analysis! Stay tuned for more!