Researching the competition

While organizations often use market research to better understand their customers or prospects, it can also be a powerful tool for generating robust competitor analysis. Having a detailed picture of the market landscape and its top players is important for organizations wanting to:

• Enter a new market
• Develop solutions to meet unmet needs 
• Understand market leaders’ brand positions
• Identify industry pricing and promotional practices
• Determine brand equities and their effects
• Measure competitors’ customer satisfaction and attrition rates 
• Isolate low-hanging fruits for marketing and sales
• Recognize emerging organizations, technologies or disruptors
• Acquire or merge with a competitor

Some larger companies may continually monitor their competitors with a range of in-house tools, including ones that analyze which digital channels are generating revenue for the competition, where competitors are ranking high for industry keywords or organic search, when sentiment changes in social media comments, and which competitor content is performing best. 

While these and other types of data analytics can help inform a competitive analysis, we often recommend clients begin with qualitative research. While the knowledge gained by online analysis absolutely has value, it is often incomplete in several ways. Feedback from front line sales or customer service staff can be helpful, too, but it may be biased. Many times, highly desired information — such as competitor pricing — is not freely available. 

For all these reasons, we have found that one of the most accurate ways to gather competitor intelligence is to have some qualitative component to the research, specifically to talk directly with people who have a need for our clients’ products and services — but who buy from our clients’ competitors. 

When conducting this type of research, we can dive deep into various aspects of the participant’s consideration and purchasing processes — whether they be a business decision maker or a general consumer. This can be executed not only with individual interviews, but also dyads, triads, and small focus groups. Some of the opinions and behaviors typically discussed include:

• Top-of-mind brand awareness
• Aided awareness of all players and their brand perceptions
• Brand loyalty and the reasons for that loyalty
• In-depth product (or product feature) reviews
• Roles (and role influences) involved during consideration and purchasing
• Share of wallet among brands purchased
• Why specific brands are preferred for specific products or services
• Criteria used for purchasing the category of product/service
• Customer experience delighters and pain points
• Satisfaction with contracts, pricing, negotiations, warranties, customization, delivery, etc. 
• Reasons customers have abandoned brands/vendors

In addition to exploring these topics and probing responses, qualitative research enables us to gauge the intensity of opinions and emotions connected to them. It also allows unforeseen ideas to emerge. An example was a study we conducted exploring  preferences for entertainment systems. While discussing options with participants, we learned that many people were loading personal content on a tablet and using that instead of the available systems. Personal tablet devices hadn’t been viewed by the client as a competitor until it was discovered in this research.

Qualitative research is often followed by quantitative research using a survey. In addition to validating findings in a larger sample, this phase allows us to better tailor specific advanced analyses to enrich our findings, conclusions, and recommendations. For example, Kano analysis is a powerful tool for identifying where market needs are not being fully met, where competitors are underperforming, and where our client excels.  To be reliable, it needs to include a comprehensive set of attributes, and those are often best identified by talking to actual customers.  

Similarly, the findings from other various advanced quantitative research techniques (Conjoint, TURF, MaxDiff, etc.) can be combined with initial qualitative findings into a comprehensive competitive analysis using a SWOT structure or other preferred framework. 

If that sounds like a lot of work, start small with some qualitative interviews and build from there. A thorough and up-to-date understanding of the competitive landscape contributes strongly to any strategy for success.  

Linda Kuster is the president of Vernon Research Group, based in Cedar Rapids. Contact Ms. Kuster at lkuster@vernonresearch.com.