“We help you stay ahead of the competition!” This is a promise that B2B companies make all the time to their potential clients. But, when you dig down deep, do you really know and understand who your competition is?
Do you know who your primary competitors even are?
It is possible to achieve success by ignoring the competition and doing your own thing, but it’s a risky road. So what are the advantages of knowing and studying your competition?
Your competitors are walking the same road you want to walk on to succeed in business. They are certainly doing some things right and some things wrong. By studying them, you can get a masterclass on what to do and what to avoid in your business niche.
Also, by knowing your competitors you can find out where you can stand out among the crowd. Knowing where you’re different and making a stand on that will give your audience a clear choice between competitors.
In other words, by looking at your competitors, you can save a LOT of time, money, and heartache. AND you can use your competition as a source of ideas. But maybe you think you have something so unique that you have no competition? While it’s possible, you may have more competitors than you think.
Types of Competitors
Before we start on the ways that you can identify your competitors, let’s first talk about the types of competition that you have in the field. There are 5 types of competitors: direct, potential, indirect, future, and replacement.
Direct competitors are competitors who are directly vying for your customers. If you’re a residential painter, your direct competitors are other residential painters in your service area. If you have an online course about confidence, they’re the other ones who have courses about confidence. When most new business owners think about their competition, direct competitors are what come to mind.
Potential competitors are those competitors who do the same thing that you and target the same kinds of customers but aren’t selling in your market area and aren’t likely to do so. They could be your competition if they decided to enter, but either don’t have the infrastructure or have chosen to ignore your area. An example of a potential competitor would be a residential painting company in another city.
Indirect competitors are businesses that are in the same category, but they sell different products and services than you. This would be the difference between a strictly industrial painter and a residential painter. You’re still doing similar things, but the target market between the two of you are different.
Future competitors are like potential competitors, but they’re much more ready and likely to enter your market. This might be the larger national company that hasn’t entered your local market yet. Think of them as between potential and direct competition.
Replacement competitors are those who provide an alternative to the services that you offer that solves the same pain points. If there is more than one way to solve the problems you solve with your business, you may have a replacement competitor. For our residential painter, this would be any DIY store that sells painting supplies.
All these types of competitors can pull market share away from your company now or in the future. But how do you start finding out which ones are actually your competitors? Now that businesses focus on digital marketing to advertise their businesses, your first step is to visit a search engine.
You could start by looking through local business directories, and that’s not a bad place to start. Since most people perform online searches for what they need well before they go driving around the neighborhood, those are the directories where hidden competition might be pulling your audience away.
The first step is to identify the keywords that people use to search for businesses like yours or are related to the problems that you solve. You likely already have a list of keywords you’re targeting for SEO, but if you don’t then think about the sort of things your clients would search for that would bring up your business.
People search on three types of queries:
Navigational – They want to find a particular site
Informational – They want a particular piece of information
Transactional – They want to do something through the web (e.g. make a purchase)
Do some brainstorming and come up with some relevant search queries for your business and the different types of competitors. Later, you may want to use this list to employ on-page, off-page, and technical SEO to rise in the ranks for those search terms. But for competitor research, you just need the queries.
So How Do I Identify My Competitors?
Once you have your list of keywords, the next step in the process is to find out who your competitors are using this list. There are several methods you can use to find them, including through social media and forums, looking through the pages of Google, and market research.
First Page of Google Search and Bing
Perhaps the easiest way to discover the competitors in your area is through doing a Google search for your keyword. Most of your customers will search for you through a simple search like ‘<service you provide> + city name,’ so you might search “painters in atlanta” or “atlanta painters” to start.
Note the top ten companies which show up in your searches, including the ones which show up in the advertisement section at the top of the page and in the map section for each of your keywords.
Social Media and Forums
Search Facebook, Twitter, Instagram, and Pinterest for your keywords if that makes sense. These places will give you a better view of the competitive landscape – and may even be more up fresh than the original search that you did using your original search parameters.
It’s easy to forget that there have been searches for everything out there and that the answer was most likely recorded on Quora, Reddit, or another similar forum.
Real World Competitors
Of course, you can’t ignore your direct competitors in town. You’ll want to pay special attention to these. Go to their websites and study how they do business. Read their reviews. You can even do real-world research by going to their stores.
Some companies hire market researchers and do surveys to discover their list of their client’s competitors and where they fit into the ecosystem. You can perform your own market research by digging into searches, looking through trade journals, and more, but if you have a lot of competitors then it may be faster to leave it up to the experts.
Once you have your list, sort the competitors into the five areas we mentioned above.
Choosing Your Competition
When you dig into this process, you might find possible competitors coming out of the woodwork. Don’t get overwhelmed! The list is just an overview of the entire field. Some of these competitors will be more of a threat than others. If you’ve already been in business for a while, you’re probably beating some of them already.
The first focus is direct competitors closest to you in the search engine rankings. People use the internet to find businesses, so find the sites that are just above you in the rankings. We trust search engines to make choices for us, so getting ranked higher will make searchers more likely to investigate your business over the competition. By focusing on the sites closest to you in the rankings you’ll avoid overanalyzing all the competition.
Potential and future competitors can be used for market research. If you see someone is doing well, investigate what they’re doing. Could you be using those strategies yourself?
The goal with indirect competitors is to highlight the differences between you and them. The general public may not know the things that might differentiate two indirect competitors, like between a handyman and a general contractor, for instance. Both do carpentry but a general contractor will wave off jobs that are too small.
You can use your site to educate people about the differences and target keywords that are specific to your market segment. A contractor might focus on home renovation keywords, while a handyman would focus on small repair keywords.
Finally, to compete with replacement competition you’ll need to educate the visitor on why you’re the better option than the competition. What do you offer that the competition can’t? Do you save time? Money? Offer a superior experience? Lean in on that and make your case.
As you move up in rankings and grow your business, the competition priority might change. You might grow big enough to attract the attention of a future competitor. A direct competitor could go out of business. Competitor analysis shouldn’t be done once. Do an update of your list once or twice a year and see what has changed in the whole field, but do a monthly or quarterly analysis on your closest competitors to see how you’re doing against them. That will let you know if your strategies are working.