So, if you want to stand out in this high competition, you need effective strategies like competitor analysis.
In this article, I’ll discuss what competitor analysis is, its importance, various techniques, and how to do it in detail.
What Is Competitive Analysis?
Competitive analysis is a way to identify your competitors and understand the dynamics of competition in your market, industry, or specific niche by comparing and analyzing your company, product, or service with others.
For SaaS businesses, competitive analysis helps you find competing brands offering the same type of products or services as you, along with their strengths and weaknesses. You can figure out which brands are ahead of you and why, including both direct and indirect competitors.
You cannot only delve deeper into their products and services but also understand the strategies they leverage for marketing, sales, retaining customers, setting the pricing, and so on by performing competitive analysis.
Analyzing and documenting the useful insights that you have gained through competitive analysis will help you spot flaws in your strategies and improve them.
You can also learn from their successful campaigns and devise even better strategies for your brand and product or service. You can also find out potential risks that might be approaching you as well as opportunities that await.
As a result of understanding the competition and improving your efforts periodically, you will be able to improve your outcomes and stay relevant and competitive in the market.
Why Is Competitor Analysis Crucial in SaaS Business?
Understand Your Brand’s Market Position
Conducting competitor analysis helps you find out where you stand in the market. You can learn about brands that are ahead of you and analyze their successful strategies deeply. This will help you make positive changes in your efforts and improve your positioning in the market.
No brand, product, or service is perfect. Discovering flaws in your competitors will help you decide what not to do. This also creates an opportunity for you to do better than your competitors, where they are lacking, and attract more customers.
You can perform competitor analysis with the help of many techniques, like reading customer reviews of a competing product/service. This information is crucial as they are directly put up by the target customers, showcasing their pain points, preferences, likes, dislikes, and opinions.
You can take note of these points and improve your offerings accordingly to provide better products, services, and experiences.
Analyzing your competitors regularly gives you an idea of current trends, updates, and other changes your industry is going through. You can use these insights to shape your products and services and mold your marketing efforts in that direction.
Now that you know why to do competitor analysis, this question arises:
When to perform competitor analysis for your SaaS products?
I would suggest you regularly perform competitor analysis.
The reason is customer preferences and demands change, technology evolves, old methods are replaced by new ones, and other changes keep on happening in the industry.
So, going with the flow is necessary. If you won’t, others will, and you may risk losing your customers to another brand that is embracing the change and coming up with improved products and services.
If you have never done competitor analysis, I’d say start as soon as you can and make improvements. This is a continuous process, so do it periodically. According to me, performing competitor analysis once in a quarter, half-yearly, or yearly can suffice based on the competition in your niche or industry.
Competitor Analysis Frameworks
While performing research and analysis on your competitor, you can use a competitor analysis framework like the one below to ease your process.
#1. SWOT Analysis
S – Strengths, beneficial factors
W – Weaknesses, disadvantageous factors
O – Opportunities, areas where you can excel
T – Threats, business challenges
SWOT analysis will help you assess a company’s strengths and weaknesses, which are internal factors the company can control. It also helps you identify potential opportunities that you can grab and threats or challenges you might face, which are external factors beyond your control.
#2. Porter’s Five Forces
This technique is useful when entering a new market. It evaluates five critical forces – new entrants, new suppliers, new buyers, growth intensity, and substitutes or alternatives. These are applicable to all industries and competitive structures.
#3. Perceptual Mapping
Perceptual mapping is done on a graph, plotting two given factors for your competitor and your brand. You can compare quality vs price, expenses vs revenue, etc., and determine your market positioning.
#4. Growth-Share Matrix
If you have a larger product portfolio, this technique is ideal for your SaaS business. It’s a matrix where you classify your products into four categories:
Stars, for products with high market share and growth
Cash cows, for products with higher market share but lower growth
Question mark, products with lower market share but higher growth
Pets, for products with low market share and growth
Here, you will mark your products against your market landscape and competition and analyze them to understand your market share and business growth.
How to Perform Competitive Analysis for Your SaaS Business
#1. Identify Potential Competitors
If you want to stay ahead, you ought to know who all are in the race. So, the first thing you must do is to find out your competitors in the SaaS market, preferably in the same niche.
Here are different ways to find our competitors:
Web search: Open a search engine like Google, Bing Yahoo, etc., and search for your competitors. You can do it by entering some important keywords of your SaaS business or specific niche in the search field.
For example, if you write “best AI cybersecurity tools” in Google’s search bar, it will enlist companies offering AI tools for cybersecurity and recommend articles with listicles. That way, you will know the top competitors in the market.
You can also use location-based keywords like “best AI cybersecurity tools in the US” or time-based keywords like “best AI cybersecurity tools in 2023”.
Read customer reviews: Read reviews by real customers on sites like Capterra, TrustRadius, G2, SoftwareSuggest, etc. You will come to know various companies offering similar SaaS products or services as you. This will also help you understand the experience of users with a particular product or service.
Search engine PPC ads: You can also get to know about competitors in your niche with the help of PPC ads on search engines like Google.
Online tools: Finding competitors in your niche and industry has become easier with online tools such as SEMrush, SE Ranking, Serpstat, and SproutSocial. Just give these tools some relevant keywords, and it will show you a list of competitors.
Not only should you find the basic information about them like name and address but also deeper details such as products and services they offer, customer support, coverage area, target audience, technologies they leverage, and pain points they solve.
Moreover, it’s not only essential to identify your direct competitors in the market offering similar products and serving the same target audience but also indirect and potential competitors.
Indirect competitors are the ones whose capabilities are different, but the target audience is similar.
Potential competitors have similar capabilities but different target audiences, but they can expand and become your direct competitors.
So, make a list of all these competitors using the above method.
#2. Conduct Thorough Research
Once you have identified your competitors, it’s time to conduct thorough research about them one by one. Initially, you may start with 5-10 competitors in the SaaS domain who give you direct competition. Gradually, you can research other direct ones, followed by indirect and potential competitors.
When conducting research, learn not only about a brand but also its products and services, marketing strategies, user experience, success rates, and future scopes in detail.
#3. Product and Services
Products and services are the primary differentiating factors in a SaaS business. So, find out aspects about their product or service like:
Functionalities and features and their benefits for users
Unique selling points (USPs) that set them apart in the market
User interface (if it’s a virtual product/service)
Ease of use and accessibility
Different use cases
#4. Marketing efforts
Research the marketing efforts and strategies of your competitors in SaaS.
Marketing channels: Find out what channels they use to market their products and services. It may include social media profiles like LinkedIn and Instagram, their website or online store, YouTube channel, etc.
Content: Content marketing is a great way to boost your reach, visibility, and conversions. So, research the content marketing tactics of your competitors. Look at the type of content they create and distribute on what platforms. It could be articles, social media posts, videos, images, etc.
SEO: Along with content, learn about the SEO strategies of your competitors by studying their keywords, backlinks, and other tactics. Find out what keywords they are targeting and ranking for. Online tools like Ahrefs can help you with this.
#5. User Experience
Understanding the user experience is crucial. Your competitor might have released an awesome-looking product but if it doesn’t serve its purpose, what’s the use?
So, instead of going by the name or looks, find out whether the user is happy about it or not. For this, studying customer feedback is necessary. Check out comments on social media and their website, YouTube videos by actual users, and other search engines. You can also try some products and services to experience it yourself.
Furthermore, gather data from reputed sites that have performed case studies or research on your competitors. It will help you understand their market capitalization and share, demands, and other important statistics. You must also research the pricing plans of your competitors, whether they offer free trials or not, the payment systems they accept, and other data.
#6. Analyze and Compare
After you have performed deep research on your competitors’ brands, products and services, marketing efforts, pricing, user experience, and other details, it’s time to perform analysis.
For this, document this valuable data in a secure and accessible place, start analyzing different aspects and points, and compare them with yours. Do not forget to note down your observations and comparisons.
#7. Analyze Their Website
Analyze a competitor’s website or shop where they have put up their products and/or services. Also, evaluate its web copy and design, like structure, color combinations, images, and other visuals, etc.
Read about the founders, their team, vision, mission, goals, etc., to understand them more. Notice all their products and services, their quality, unique selling points (USP), pricing models, free trials, and what features they cover under which plan.
Use the website like a typical user would do and determine how user-friendly the website or shop is, what options and buttons they use, navigate to different pages, notice call to action (CTAs), try their customer service for query, and explore other aspects.
Ultimately, compare these website aspects with your website to find the gaps, who lacks where, and areas you can improve. Find out their strengths and weaknesses and compare them with yours.
#8. Analyze Their Marketing Efforts
Analyze and compare your marketing strategy with competitors. Check what platforms they cover and what you don’t.
Go to their social media profiles and check their activities, like posts, comments, type of posts, engagement, brand mentions, hashtags, and more. Find out things that you can also implement to optimize your social media accounts.
Next, read their blog section, if any, and analyze the type of content they publish – articles, blogs, case studies, PR materials, etc. Find out opportunities to be better than them. Compare what keywords you target with theirs, along with backlinks, search engine rankings, etc. Tools like Google Keyword Planner, Ahrefs, and Backlinko can help you here.
You must also analyze their paid marketing initiatives like PPC ads, Facebook ads, Instagram ads, and more. Compare how they have done it with yours to understand the mistakes and improve them. Furthermore, it’s essential to analyze and compare their email marketing efforts with your SaaS business. Marketing analysis tools such as SimilarWeb can be helpful here.
Document Issues and Improve Your Strategies
Once you have analyzed and compared different aspects of your competitors, document all the areas where you need to improve your efforts, be it your website, products or services, content, ads, website, or email.
Arrange this information carefully so that making changes becomes easier for you. It would help if you create a table and write strategies for your brand and competitors.
Social media coverage
LinkedIn, Instagram, Twitter, and Facebook
Instagram and Facebook
Not enough coverage, (your) brand needs to feature on LinkedIn and Twitter
Invests more in paid ads like PPC ads and Instagram
A balanced mix of paid ads and organic marketing through engaging posts
Brand X lacks in content marketing.
By documenting the different strategies of your competitors, you will be able to spot their strengths and weaknesses. Understanding the strengths of competitors will help you improve your efforts. Their weaknesses will help you find gaps that you can convert into opportunities by making suitable changes.
For example, if they don’t create video-based content more often and primarily stick to text-based, you have the opportunity to create stunning video-based content to educate your target customers about your products and services.
Keep on updating this document periodically. Continuous monitoring of your competitors is important for your SaaS business as technologies evolve, new players come, and trends change.
Analyzing competitors in your market and niche is important for your SaaS business. It will help you understand the market dynamics, what works and what doesn’t, and shape your strategies according;y. This way, you will stay ahead in the race, beat the competition, and continue delighting your target customers.
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