How competitor information will help you in your business

How to evaluate competitors

Principles

When there is a market, there are competitors - this is an indicator of the availability of demand.
You can learn a lot from successful competitors.
It is not the absence of strong competitors that makes a successful company, but the implementation of a strong competitive strategy in an attractive market.

Practice

Step 1. Understand who exactly to analyze

Before using analysis tools, understand who to analyze. First of all, competitors should be considered those who a) solve the same problem as your project, and b) claim the same money from the same potential customers.

Step 2. Conduct analysis

After compiling a list of competitors, which can be expanded during further analysis, four key sources of information should be worked out and, if necessary, supplemented with one of the additional tools.

1. Sites of competitors

The following information will be helpful:

Attendance and traffic sources. Often this information can be obtained using the SimilarWeb service.
Keywords for which the site appears in organic search and for which it is promoted in contextual advertising. This is where SEMrush and SpyWords will come in handy.
Backlinks (sites that have a link to the analyzed site). The LinkPad service specializes in this matter.
Appearance, content (description features, offers, advantages, etc.), services used. This task is solved primarily by "manual" browsing sites and recording the necessary information. If you are familiar with html, then it will be useful to also look at the site code.

2. Reporting

If your competitors are LLCs or JSCs and most of their sales are official, look for their tax returns. For example, through K-agent or similar services. The data for searching for a legal entity (name, TIN or OGRN) can be found on the website in the "Contacts" section (if any), in the user agreement on the website (if any) or by contacting the company as a potential client.

3. Media

You should be interested in competitive news, analytics, and founder / CEO interviews.

Use a keyword search in Yandex and Google (including in the News section), also try to drive in a combination of competitors' names with the words: investments, sales, presentation, and so on.

In addition to search engines, try an internal search in industry media (for example, Rusbase for start-up projects), YouTube searches, and publication databases such as Public.ru.

You can also analyze social networks (what they write about competitors and what competitors themselves write). Analysis will be simplified using dedicated services such as Buzzsumo.com.

4. Own experience

Personal experience is the most useful and often neglected tool.

Make several purchases from competitors and look at the check / receipt numbers (as a rule, they are sequential and after making two purchases, you can understand how many purchases were made during a given period of time). When it comes to a service, then the customer account numbers are often sequential.

Chat with sellers. Many of them are easily ready to give out any information they own.

If a competitor has a retail outlet, watch it: how many people pass by, how many come in, how many go out with purchases, with what emotions they go out, and so on.

5. Additional sources

Startup databases. Sometimes you can also track information on competitors through the databases of start-up projects: Crunchbase and CB Insights - for international projects and the Rusbase database for Russian projects.
Applying for a franchise. If any of the competitors have their own franchise, be sure to ask them for all the information and study it.
Competitors' presentations. If your competitors are performing at events, it is worth attending them or at least finding presentations of performances.
Interviews with industry experts and former employees of competitors.
The most radical method is to get a job with a competitor.

It is not the lack of competitors that makes a successful company (this is more a sign of a limited market), but the implementation of a strong competitive strategy in an attractive market. A competent competitor analysis creates an excellent and almost cost-free basis for the formation of such a strategy.

Step 3. Create a constantly updated competitor monitoring system

It is convenient to monitor competitors in a cloud-based table by filling in key fields by major player and creating a regular business process to update this table.

For example, the Netology table includes the following information on the competitors of each of the business units:

competitor's name;
USP;
weak spots;
insider information;
sales (volume and main sales funnel);
product line (directions, number of courses);
format (online / full-time / blended), duration of training, schedule, availability of practice, format and quality of content;
course partners;
support of training (coordinators / mentors / automated, the presence of individual trajectories, communication platform);
content-based ecosystem (access to class updates, guest webinars / lectures / workshops, thematic mailings);
competitor's media (blog, TG channel, VK and FB communities);
employment of students;
cost (price / average bill, installments / loans, money back, discounts on repeat purchases);
the speed of response of the sales department to the training request;
B2B directions / products.

How to use competitor information

Analysis of competitors before starting a business is primarily needed in order to ensure that the product has a solid position in the market in the future. So that the startup can not only separate itself from a number of competitors, but also get ahead of them.

The leader uses the information obtained during the market assessment at every stage of the launch, development and growth of a startup. Here are just some examples of such stages.

To assess whether there is a demand for similar products that are already on sale

Explore existing analogues and similar ideas that have been implemented in your country and abroad, carefully study their stories and results (sales volumes and investments received, the assessment of the value of businesses, the dynamics of the number of users, marginality). A separate important issue is understanding the sales volumes of the current market leaders. This creates an understanding of the current potential of the target market.

To define an overall business development strategy

Start with a written, concise yet succinct description of the strategy, including the mission, product vision, value, outcome and key features, as well as information about potential users. Knowing about your key competitors will help you understand which metrics you should focus on when defining your strategy.

To calculate the unit economics of a project

Unit economics is an aggregate measure that determines whether there is financial sense in implementing and scaling a business model.

The goal of this phase is to predict these metrics based on competitor values, industry averages, or your own experience and understand how viable your business model will be.

To make a financial plan

The purpose of working with a financial plan at the stage of creating a business is to identify and eliminate unverified assumptions, assess the prospects of the project, and also show the expected picture of business development for potential investors.

Knowing about competitors when making a financial plan helps you avoid those very unverified assumptions. The initial data should be taken from the price lists of suppliers and contractors, from the indicators of competitors and from self-conducted tests.

To compose an investment teaser and find an investor

An investment teaser (memorandum or request) is a document that is provided to a potential investor for an initial assessment of the investment attractiveness of a project.

The purpose of this document is to show that your business has a competitive advantage that can form the basis for quickly capturing a significant share of an interesting market.

The teaser should contain:

List of competitors and comparison with them (highlighting the advantages of your offer over the offer of competitors).
Competitive analysis: number of customers, sales, attracted rounds of investments.

To build a customer acquisition system

At this stage, studying your competitors and their experience of successful marketing to your audience is especially important. It can be any product with a similar decision-making process.

After all, in order to decide on the tools for attracting an audience, you need to understand:

Where do your target customers usually spend their time (offline and online)?
Where do your target customers usually get their information from?
What do they usually do before making a choice?
Where are successful brands targeting this audience promoted?

Information about competitors in the book "Startup for a Billion"

Maxim Spiridonov is an entrepreneur with twenty years of experience and general director of the educational holding "Netology-group". Vyacheslav Makovich is a co-founder of the AAA Trust venture investment company and the creator of the personal branding agency SLV. Together they wrote Startup for a Billion, which explains how digital business differs from other types of business, breaks down popular mistakes new entrepreneurs make, and provides practical advice on how to avoid them.