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Originally Posted On: https://www.jimmynewson.com/competitor-research-a-guide-to-choosing-your-competitors/
Are you thinking about doing competitor research? The research that you perform on your company’s competitors should dictate almost any strategy that you make. Identifying them can help you build a successful marketing plan to push your brand out in front of them.
However, to build resourceful competitor research and analysis, you need to identify the different types of competitors. In fact, there are five different types of competitors that you need to focus on.
Your Competitor Research Breakdown
See below for several tips on how to perform competitor research, detailed by the five different types that you should have an eye out for. Be sure to use this information to your advantage!
1. Direct Competitors
When someone says the word “business competitor”, this is most likely the first type that comes to your mind. As the name would imply, direct competitors, are companies in your industry that offer the same product(s) or service(s) as your company does.
A perfect example of this is the direct competition between brands such as Coca-Cola and Pepsi Co. They both have staple cola soda products and offer the same variation of products for each soda they offer.
Pepsi has Mountain Dew, Coca-Cola has Mello Yello. Coca-Cola has Vanilla Coke, Pepsi has Twist. You get the idea.
In this example, Coca-Cola could use a tool such as SEMrush to identify what keywords Pepsi is using to direct their target audience. They can also study aspects of their website that Coke can emulate or article topics that they can also write about.
Identifying your direct competitors plays a huge role in the market research and competitor research of your company. Consider it a game of marketing chess between you and these direct competitors that you find.
2. Indirect Competitors
During your competitive research and analysis, you might come across potential threats in your industry. These companies don’t offer the same products as you, but they compete for the same customer pain point.
An example of this would be something along the lines of two professional sports teams that reside in the same city. While they might be two vastly different sports, they still target the same local sports fans to purchase season passes.
Another example would be Jimmy Johns and Pizza Hut in the same city. These are two completely different styles of food, but both are offering delivery food to hungry local citizens.
These are a bit trickier to find in your competitor research. It’s going to take a bit of training and a few competitor research tools for you to find indirect competitors for the products that you offer.
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3. Potential Competitors
There are also those companies out there that might offer the same products or services as you, but they don’t market in your area.
For example, if you’re an HVAC service in St. Louis, Missouri, then a potential competitor would be a similar HVAC service in Springfield, Illinois.
You might think to yourself “Why would these matter? Why should I plan for a company in a completely different city?”. Because while they might not be an offline threat to your business, they can steal your online traffic from you.
If they claim the top Google search results spot for a keyword before you, then you’re losing out on hundreds (if not thousands) of site users.
If you’re an eCommerce site, then potential competitors are even more of a threat to your sales conversions and lead generation. You’ll need the best competitor research tools such as SEMrush to beat them to critical keywords.
4. Future Competitors
Perhaps you’ve come across a business in the industry that you view as an imminent threat. While they might not be in your marketplace currently, they could arrive at any time and when they do, it will impact your sales tremendously.
These types of competitors are referred to as future competitors, and they shouldn’t be taken lightly. You should prepare for them as if it’s a certainty that they’ll arrive at some point.
For example, if you’re a local family-owned pizza restaurant, then you’ll have future competitors such as Papa John’s and Round Table Pizza. They might not currently be in your town, but there’s always a potential that one opens up.
If you research and analyze these future competitors, then you’ll already have an established brand in your local SEO. They’ll have a hard time overcoming your top search results, online reviews, and local SEO searches.
5. Replacement Competitors
Lastly, you have replacement competitors which are companies that solve the same customer pain points as you do, but with different products or services.
Their products might be vastly different than yours, yet your target audience might prefer them over the product that you have.
A prime example of this is in the food industry. Say your business is a local sandwhich company. A few replacement competitors would be frozen meals, Little Caesar’s Pizza, Chipotle, or anything in between.
Do they offer the same product as you? No. Do they claim to have as high-quality of ingredients as your sandwiches do? No. Still, customers might choose them due to price, convenience, or many other factors.
Listing these in-depth on your competitor research can help you design an online marketing plan with them in mind. By simply embedding a few keywords they use and advertising where they do, you can pull the target audience away from them.
Improve Your Competitor Research Strategy Today
If you’re feeling as if your business is stagnant and needs more growth, then improving your competitor research is a great way to start down that path.
Be sure to sign up for our upcoming competitive research webinar on competitor research and analysis for more information on how to identify each type of competitor for your business.
For more inquiries and updates on that, please reach out via our contact us page and we’ll be happy to assist you further.