In this piece, we’ll explore several methods to help you compile a list of your closest competitors, as well as a list of those to keep an eye on.
The different types of competitors
Wherever you look online, you’ll find there are lots of different terms for various competitors. To help you better understand what you need to define and who you need to be aware of, we’ve collated them into the following categories with examples:
You’ll probably already be aware of most of your direct competitors. These are the businesses that sell the same products or services as you. For example, if you’re a local bakery, then any other bakeries in your town will be a direct competitor.
Not always immediately apparent, these companies sell different products or services to your business and possibly to your target audience. For example, an indirect competitor for your bakery might be a supermarket that also sells baked goods. It’s not their primary offering, but there is some overlap. You often find this type of competitor online where you’ll also compete for keywords, and therefore the attention of online searchers.
These businesses sell products or services that are a substitute for yours. For example, McDonald’s sells burgers while Dominos sells pizzas. Both serve affordable, fast food, but if you can’t have one, you might have the other; therefore, they are substitute competitors.
Potential/ future competitors
Potential or future competitors are often direct, indirect or substitute competitors currently not distributing in your market. For example, a brand that sells sportswear online but can only sell to US markets is not a threat for UK sports brands, but they could be in the future. Or a brand that currently only sells to a specific audience could expand their offering to include yours, i.e. sportswear for men that could eventually target women.
Identifying your competitors
Before you can successfully identify your competitors, you need to understand your product or service and how it fits in the market. What value does it have? What makes it unique? Once you know your offering, carry out some of the following steps to define your competitors:
Do your market research
Look at the current market for your product or service and see what companies immediately jump out as competing with your offering. Speak to your sales representatives and ask them which businesses they’re going up against in pitch situations or hearing about in sales calls? Do they have any independent knowledge of which competitors your business is coming up against in the decision-making process?
Ask your customers or prospects
Customers are key. Once they’ve chosen your business, you can ask them which other products or businesses they were considering during the decision-making process and why they chose yours over your competition. This information will also help your sales teams better prepare for calls with similar prospects.
Check out social media
Your target audience will be using social media to engage, recommend and review your business online. Make sure your in on the conversation. These types of posts will also help you identify other competitors who are engaging with these posts online or being recommended by others.
Direct and indirect competitors will be targeting similar or matching keywords to you. If you’re using SEO tools such as SEMrush, you’ll be able to see which businesses are going after the same key phrases as you and how you rank against them. You can also use this research to determine which pages competitors are using for specific keywords, informing your content strategy.
Search engine results
A quick online search will also help you see which of your competitor’s content is competing with yours. For example, try typing a term into Google that combines your unique selling point (USP), your business type, and your location. i.e. ‘vegan bakery in Kent’. You’ll see if your company ranks and who appears above and below your listing.
If you’re using paid advertising, then it’s definitely worth looking at how much competition there is for your key terms and which businesses are bidding on the same term. Those bidding on the same phrases and words will be the ones who value those listings and will be competing with you online.
If you’re looking to build a new website or refine your marketing strategy, a list of these competitors as well as where and how you’re competing with them will be invaluable to your team or agency.
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