In my previous tutorial we covered theseBasics of competitive analysis for your company– no matter how small.
In this guide, we're going to delve into learning more about your competitor's customers. You'll learn about the different types of people your small business competitors are targeting, why they're buying, and any potential unmet needs they may have. Once you've done that, you can find out:
- Know exactly what types of customers your competitors attract, including different types of personas or customer segments.
- Find customer segments your competition is missing out on.
- Identify common terms that customers use to describe their needs, your competition, and your competitor's areas of business that are important to them.
Continue with this guide as you conduct your competitive analysis.Fill in the attached worksheet, in which we started working ontutorial anterior. This will help you organize any information collected and serve as a quick reference when creating yourBusiness planor develop yourMarketing planwith greater depth. Let's start.
Your Small Business Competitors: Where to Learn About Your Customers
The difficult thing about finding information about a competitor is that you can't easily see inside their business. Fortunately, many online tools can help you get started with competitive analysis. Here are some resources you can work with to find useful information about your competitors' customers:
1. Social Media
This is where most of your research takes place. If you look at your competitors' social media pages, especially on the networks where they are most active, you can see how they are interacting with customers - at least online. Here's what you need to watch:
Step 1 - Check the list of followers
On Facebook, Twitter and Instagram, you can view a Page's list of followers. A quick glance at this list can give you a high-level view of your competitors' customer demographics.
Step 2 - Read Guest Reviews and Posts
Facebook Pages allow businesses to gather customer reviews. Check out a competitor's Facebook page, click on their reviews, and you'll find a section with star ratings and testimonials (see example below).
Some Facebook pages also allow "guest posts", which allow page visitors to leave a publicly visible post that is not a review or rating. Check to see if your competitors have these posts (see example below) and browse them to gauge customer sentiment and find FAQs.
Step 3 - Search social media for your public posts and tweets
Do a quick search for your competitors' brand names and you'll find public posts and tweets about them. For Twitter it is better to useTwitter advanced searchSo you can search for brand mentions, narrow your search by location, and narrow your search by date.
You can also use a tool likesocial mentionwhich aggregates results from a variety of sources, including photo sites and question-and-answer sites like Quora and Reddit.
Step 4 - Analyze the use ofFacebook Ads
After doing a little research, chances are you'll see your competitor's ads in your Facebook newsfeed - if they're buying ads. If that's the case, you can easily gather the demographics of the prospects you're targeting.
When you see the ad, it's usually labeled "Sponsored" or "Suggested Post" as in the example below.CliqueTo diedown arrow iconon the right side of the screen and selectWhy am I seeing this?A new window will open showing the exact demographics your competitor is buying the ad for. This can include age group, gender, location and interests.
2. Check the websites
In addition to Facebook reviews, review websites for companies likefuckcan help you gather information about how customers think about your competitors' products. This is a useful competitive analysis. Also, for competitors with physical stores, you can see their ratingssquare.
If they have an online store, make sure the store has reviews and testimonials.Etsy-ShopsYou also have public ratings and rating systems that you can navigate to learn more about a store's customers, as well as how they feel about the competition. Here's a screenshot showing an example of where you might find these reviews in an Etsy shop:
If you sell services, you can look at online marketplaces for those services and find reviews for similar service providers. A quick search for "illustration" will bring up these different vendors. If you click on their profiles, you can see their customer reviews and testimonials.
3. Blogs
Do a quick Google search to see if the blogs have covered your competitors' products and services. Some businesses, no matter how small, inevitably get scrutinized by bloggers. This is especially true when they provide free samples for bloggers to review. If your competitor has these types of reviews, you can use them for your research.
Don't forget to read the comment sections on posts relevant to your small business competitors. This is a great way to find some additional reviews, including frequently asked questions, that potential buyers might have.
Who buys from your competition?
As you go through all of the above sources, please note the following small business competitor analysis details about your customers and note them in yourspreadsheet:
1. Customer demographics
Be careful when looking at your competitors' social media followers and product reviewers. What is their general age range? Gender? Location? You don't need to do a full quantitative analysis, but if general trends emerge, write them down.
2. Profession and Income
What is the occupation of your competitors' customers? While it may not be relevant to your business to know the exact roles, it's still best to have a general idea of their occupations. Are they students, housewives, businesswomen, retailers or licensed professionals?
While there are many products and services that appeal to a wide range of professionals, you can make the mistake of ignoring possible connections between your target clients' jobs and your business. For example, if you offer cleaning services to "busy people," you need to find out why they might call themselves "busy" so that you can craft marketing messages that specifically address their needs.
As for income, it is important to keep this in mind, as it also reflects your purchasing power. You can be very specific about income levels and provide numbers if you feel it necessary. However, it is enough to identify customer segments as low, medium or high income.
observation: You can also use this type of information to start developing your buyer personas:
- The Definitive Guide to Buyer Personalities for BeginnersLauren Holliday11. May 2016
3rd stage of life
For many products and services, the customer must be at a certain stage in their personal or professional life. When a small business makes wedding favors for small ceremonies, their customers are dedicated people who are already planning their wedding.
If someone offers resume optimization services, they are likely targeting clients who are entering the workforce for the first time, changing jobs, or entering the workforce after a long hiatus. As you do your research, ask yourself, "What stage in life do people interested in this competitor's business need to be in?"
4. What do customers like and dislike
You'll better understand your competitors' relationships with their customers when you know the strong feelings they have about that company—both positive and negative. The best way to find out is through their ratings, comments, and mentions on social media and review sites. You can also search Google for blog posts that contain reviews of your products (example search term you could use: "Ranking of [Competitor Name] [Product Name]“.
After reading all these comments, use your spreadsheet to list the positive and negative things people are mentioning. Add more search pages as needed. Also mark the items that are repeated the most.
The things customers don't like help you identify opportunities where you can outperform your competition. The things that customers like will emphasize your competitor's advantage over you. If you know both, you can now use your business plan to determine if you're prepared to beat them with your strengths and weaknesses. Learn more about writing your business plan:
- How to Write a Business PlanAndrew BlackmanFebruary 8, 2016
5. Other brands or products that customers like
If possible, look at the other products and brands that customers are following or talking about on social media, review sites, and blogs. You can see them in their posts, likes or list of Pages they follow.
Please note that you will not be able to see this information for customers with more private social media profiles. However, with review sites, a user's other reviews are often public. Alternatively, you can refer to the other blog posts that have reviewed your competitors' products and see if they have purchased other similar brands.
6. Other Customer Segments
Typically, companies have more than one set of target customers. Can you identify other customer groups with different demographics, occupations, and life stages than you've already listed? Even if they are not the majority, they are worth mentioning. These groups can be segments that you can reach and sell better than your competition.
Find "magnet words" to attract customers
As you research and fill in your worksheet, you will find that there are many ideas and words that customers tend to repeat over and over again.
With a competitor, you may find that most of their testimonials praise their "fast service". Second, you can see that most customers consider your products "expensive but worth it". Pay attention to these repetitive phrases and write them down on your worksheet. These commonly repeated words provide insight into what sets each of your competitors apart.
More importantly, you can use those exact words to attract the same type of customer, just like a magnet would. These “magnetic words” will attract the attention of your target customers as these words fulfill their needs and desires.
Review these keywords when creating the copy for your marketing material and use them as a starting point. Your copywriting will be much more effective when you use the actual words your target customers are using.
Here are some other writing guides you can refer to when implementing this technique:
- How to write a great slogan for your business (+ actionable examples)Julia Melymbrose31. May 2016
- How to Increase Your Online Sales with Psychological TriggersBrad Smith24. august 2016
- How to Structure a Successful Long Form Sales PageJulia MelymbroseJune 14, 2016
Know your competitors' customers
Once you've completed the competitor analysis exercises above for your top competitors, you'll have an idea of which types of customers they are most successful with. You might even cross some of your competitors off your list if you find they are targeting a completely different customer base than you are.
You also have a starting point with yourMarketing plan, as you become more aware of what types of customers buy from small businesses like yours. With this detailed research, you will be moreequipped to survive– no matter how competitive your industry is.