How to conduct a competitive product analysis, and why you should

Think about the last purchase you made. What made you choose one product over another? Its look? Its ease of use? The price point?

Consumers have to weigh many options any time they make a purchase. So it pays for your brand and products to stand out against the competition.

But what does make your offerings stand out? And how can you be “the only choice” against your competitors? This is where a competitive analysis for your products comes in. It’s the best way to understand how to outpace your competitors, and where you may be falling behind.

All of the information you need is at your fingertips—you just need the right tools to access it. We’ll walk you through how to do a competitive product analysis today to inspire your offerings and brand positioning for tomorrow.

• What is a competitive product analysis?
• How does a product competitive analysis help businesses?
• How do you analyze competitor products?
• What to look for during a competitor product analysis

What is a competitive product analysis?

A competitive product analysis is the process of researching and analyzing your competitors’ products to determine how prolific they are in the market, gaps they leave and what threats they pose to your products.

This process enables you to:

• Determine what features competitor products have
• What your target market likes and dislikes about competitor products
• What products your competitors are not offering that you can offer

This process can be done for any type of product, including physical products (toys, games, tools, appliances, etc.), digital products (digital tools like Sprout Social or applications), experiences (museums, bars or restaurants) and services (cleaning services or moving services).

Conducting a product-focused competitive analysis should be done when you’re creating or considering new offerings, but also to optimize and improve upon what you already offer.

How does a product competitive analysis help businesses?

It’s competitive out there. And the process of a product competitive analysis helps businesses gather competitive intelligence to stay ahead of the competition and differentiate themselves in the market.

Here are a few actionable ways a product analysis of your competitors’ offerings is integral to your business.

Establish your unique selling propositions (USPs)

Establishing your USPs is a crucial piece of setting your offer apart from competitors’.

Conducting a competitive analysis will help you determine what differentiates your products, which will help you set them apart in marketing materials and beyond.

This could be as simple as differentiating your product by price point or feature. For example, AllBirds and Nike both offer sneakers. But what differentiates AllBirds is their core focus on extra comfort and sustainability, which is a big part of their message and brand.

While Nike differentiates their shoes and products by focusing on sports, activewear and performance—like this video highlighting how their product performs in cold, winter conditions.

Increase market share by filling gaps and solving pain points

Gaps left by your competitors provide space for you to fill with your product offerings. A competitive product analysis can tell you where your competitors are lacking and opportunity for you to step in.

Similarly, analyzing conversations customers are having about your competitors can surface pain points they face thanks with their offerings.

Gain market intelligence

Understanding how people feel about your brand and products vs. your competitors also helps you determine the biggest threats to your business. It reveals if you’re falling behind the competition, and what people prefer about other brands. The truth may hurt, but it’s vital information that you can use to improve your business.

It’s also helpful when your competitors launch new products. Examine how people react to their new products or services. Where are the shortcomings? What do people love that you can use to inspire your product development? 

Add new features

Product analysis isn’t just about looking at what products and features your competitors do have—it’s also identifying what they lack.

Analyzing gaps left by your competitors’ products gives you a major advantage. It helps you identify where there are gaps to fill, and opportunities you can take advantage of by offering a new or updated product that solves pain points your competitors’ customers face.

Inform marketing campaigns

There’s much more of a through-line between product analysis and marketing than meets the eye.

Once you know where you have an advantage when it comes to products or product features, this is valuable information to highlight in marketing campaigns—whether you’re marketing the launch of a new product, updates to an old one or just creating new campaigns that highlight what sets you apart.

Learn from competitor mistakes

The digital space is a goldmine of product feedback—about you and your competitors. Just as you learn from negative feedback about your products or services, you can learn from negative feedback on your competitors’ too.

Negative feedback on your competitors’ social channels or reviews surfaces pain points your target audience finds with their products. And this presents opportunities for you to fix those pain points in your offerings to stay ahead.

Similarly, examining positive reviews of your products alongside the negative feedback against competitors can further inform what sets your products apart.

How do you analyze competitor products?

You can manually sift through individual competitor reviews and the comments section on their social media posts. But that’s an unrealistically time-consuming process.

An effective competitor analysis needs to balance out manual research with automated tools to help you remain agile. Here are a few competitor analysis tools and sources that will help you keep an eye on the competition frequently and efficiently.

Social media listening

To get an up-close look at what your target audience is saying about your competitors’ products (and yours), you need to be a fly on the digital wall—which social media listening enables you to do.

With social listening, you “listen” in the digital space to filter out mentions of your competitors’ products, brand name and keywords—even if your competitors, and you for that matter, aren’t tagged.

With Sprout, you can also use sentiment analysis to compare how people feel about your brand and products vs. your competitors’.

If you want to try social listening for product analysis, competitor analysis and deeper social media insights, reach out to us for a demo.

Schedule a Demo

Online reviews

Reviews written about your competitors are a valuable resource when it comes to competitive product analysis. You likely already have a system for managing online reviews for your business and product—add analyzing competitors’ review into the mix.

Dig into reviews, good and bad, about your competitors and their products—on their site, Google reviews, official review sites (TripAdvisor for experiences, Yelp for the food industry or G2 for tech products and software), Reddit and any other sources you can think of.

Digging into what people love, or dislike, about your competitors’ products and offerings can unearth opportunities and inspire new products or adjustments to existing ones.

Social media monitoring

Any social media pro knows that customer feedback and questions don’t just come in through reviews. They also show up in the social comments section every single day.

Use your social media monitoring tools to keep track of what people are saying about your products and your competitors’—it’s the perfect way to outpace them, and constantly be improving your offerings at the same time.

It’s best to formally track this type of feedback so you don’t have to dig through hundreds of comments to resurface feedback later. With a tool like Sprout’s Smart Inbox, you’re able to manage mentions of your brand—even when you’re not tagged—with keywords and incoming messages across all of your channels in one central hub.

And use Tags to keep track of product feedback by creating a special label like, “Product Feedback: Positive” and “Product Feedback: Negative” so you can easily surface these insights.

Try competitor products for yourself

This is one of the more hands-on methods. Trying a competitor’s products for yourself is one of the best ways to get an up-close understanding of their product—from functionality and areas of frustration you experience to design triumphs and shortcomings.

Pairing firsthand experience with feedback you see from customers is a powerful way to get a 360-degree assessment of the situation, and how yours might stack up against it.

Third-party research

Competitive research is certainly a large task, especially within industries with saturated markets. You can always employ third-party research to learn more about your competitors, their products and how people feel about them. For example, hiring an outside company to survey your target market. This is a great way to get in-depth, direct information about how your target market feels about your industry, competitors and what they love or hate in a product.

What to look for during a competitor product analysis

We’ve covered the “how” and “why” behind product competitive analysis methods. Now let’s get into what you actually want to track.

Think about some of the end goals we’ve mentioned for a competitive product analysis. For example, it helps you stay ahead of your competitors by identifying opportunities, finding gaps and weaknesses and unearthing differentiators for your products.

Here are some elements to look for as you conduct your analysis, and to inform competitive benchmarks.

1. Aesthetic or design of your products or services

This can refer to the physical or digital attributes of a product, or the experience of a more experiential-based product (think museums, theme parks, etc.)

How do the physical attributes or appearance of your competitors’ products or services stack up to yours? How do the two compare?

For example, let’s say you have a beauty brand. If you find that consumers love the packaging offered by your competitors’ products, it may be time for a packaging refresh.

Here are a few broad physical attributed to track and explore:

• What’s the packaging for your competitors’ products?
• What do consumers love, or hate, about the look of your competitors’ products?
• Are there certain colors or sizes your competitors don’t offer that you can?
• What are the physical attributes of your competitors’ products? How do they compare to yours?
• What effect does their design or choice of color have on the experience of using their product?

Pro tip: Social listening is a great way to surface keywords people often use to describe your competitors or their products and packaging. Sprout’s word cloud, for example, helps surface commonly-used keywords around these attributes to help you filter and prioritize feedback.

2. Pricing model

Sometimes the greatest differentiators aren’t so much about the products themselves, but rather their pricing.

How many times have consumers chosen your product, or your competitors’ products, because they were at a better price level or offered different price options?

During your competitive product analysis , consider these questions:

• How do your competitors’ prices compare to yours?
• For software or services, do they offer a free version?
• Do they offer flexible pricing, or pay-later plans?
• What do they claim their most popular pricing plans are?
• If they’re subscription-based, how often are people charged? What are the pricing tiers?

3. Utility

Look at the functionality of your competitors’ products, or try them out for yourself. This will help you understand how they outpace your offering, or how they fall behind.

Consider:

• What problems do your competitors’ products solve?
• What gaps do they leave?
• What customer pain points are your competitor’s products solving, or creating?

4. Product quality

A product is only as good as its quality. And your audience loyalty hinges on this, too.

A major way to pull ahead of the competition is by clearly offering a higher-quality product.

As you conduct your research, while you look through reviews or try your competition’s products for yourself, pay attention to:

• How easy is the product to use and learn? Is it intuitive?
• How high quality is it? Does it easily break?
• Is it durable?
• Does it scratch easily?
• For software, is it vulnerable to crashing or slow processing?

 5. Customer service

The quality of the customer service you provide has the power to set you apart from your competitors—or send you falling behind them.

It doesn’t matter how great a product is—if customers can’t get the help they need from a customer service team, the experience with the product and brand is soured.

During you competitive product analysis, evaluate the quality of customer service your competitors offer. Consider:

• Are there common customer complaints? What are the themes?
• What do people love about your competitors’ customer service?
• Are their customer care responses personalized? Or impersonal and sloppy?
• What is the tone of their customer service voice?
• How helpful are their agents? How often do they appear to miss messages?
• Is their engagement proactive? That is, do they engage with and celebrate positive comments, as well as questions or complaints?

Through this process, you’ll have a better idea of where they stand out against you, or where they fall behind.

Leverage social media and AI to conduct an in-depth competitive product analysis

Gone are the days where product analysis always required a lengthy process, customer interviews or focus groups.

Everything you need to know about your competitors’ products and yours is at your disposal—you just need to know how to mine it.

Leverage the billions of conversations across social media to gain a better understanding of how people feel about your competitors’ products. And use that information to inspire your own, and understand how to outpace other brands.

With the power of social media platforms and AI tools, unearthing these insights is automatic, immediate and a breeze. Try Sprout Social free for 30 days, or request a personalized demo of our social listening solution.

The post How to conduct a competitive product analysis, and why you should appeared first on Sprout Social.

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