The very first step in understanding your competition is to assemble a complete list of who the competition is and their vital characteristics. While that may sound easy, structuring the list in a way that helps you analyze what might be dozens of competitors is challenging.
To make it easy on you, here is a template that I have used for many years when analyzing the competition in various markets:
It can take a lot of time to gather enough data about your competition to build a complete landscape, so here are some shortcuts:
- Marketing. Since your competition is targeting the same customers as your business, they will advertise in the same places. Track ads on the channels where you advertise that target the same customers, and you should quickly have a list of the competition.
- Finances. In the US, most companies are required to file with the SEC, which in turn makes this information public. You can do a quick search on the SEC website for any company to see what they have disclosed, which is usually a lot. This is true for both public companies which need to disclose quarterly financial reports and private companies whenever they raise equity financing from external investors.
- Employees. Sites like LinkedIn make it easy to track how many employees work at a given company and when they hire new people as people often update their profiles when they change jobs. Never trust this data exactly, as not everyone will have a profile that is up to date, but it does give you a rough estimate. You can also check job listings to see how many new people a company is trying to add in the near future.
Having a comprehensive competitive landscape does more than just give you a clear understanding of your competition, it also allows you to track changes over time and put them in a larger context. If you see a number of competitors adding the same feature, raising more financing, or hiring a lot of people it can signal significant changes.
Tomorrow we’ll get deeper into competitive data when we discuss one of my favorite competition metrics: brand recall.
Quote of the Day: “The early bird gets the worm, but the second mouse gets the cheese.” ― Willie Nelson