“Never interrupt your enemy when he is making a mistake.” —Napoleon Bonaparte
When your competitors make mistakes, it makes winning so much easier. But what if it’s you who is making a mistake, while your competitors are off to the races? You won’t know until you figure out what your competitors are up to.
Knowing what the competitors are doing – how they are thinking about the market, what tactics they are using, how they are crafting messages and design – can make all the difference in the battle for the customers’ mind share and conversions.
In addition, competitive analysis can be a treasure trove of conversion optimization insights, yet it often gets skipped. And it’s not just a CRO problem – it is a marketing-wide phenomenon.
A Conductor study of 467 marketers found that nearly three quarters (74 percent) agreed that competitive analysis is “important or very important,” but nearly six out of 10 (57 percent) admitted they weren’t very good at it.
What Is Competitive Analysis?
Competitive analysis is a broad term for the practice of researching, analyzing, and comparing competitors in relation to yourself. Companies do it for a wide variety of reasons – SEO, branding, GTM strategy, etc. – and you can definitely use it for UX and conversion optimization, too.
If you do invest in competitive analysis (CA), you will reap the benefits of clarity and confidence. You can’t beat CA if you want to answer certain types of questions, like:
- What makes my company unique? How do we stand out?
- How do my customers think of my company compared to the competitors?
- How does user experience on my website stack up to the competition?
There’s a great deal to be gained from a thorough, regular competitive analysis – usability insights, design advantages, a more convincing value proposition, and of course, ideas for testing.
1. Set Your Goals
Before you start the analysis – remember the 1st essential truth of competitive intelligence: How one thinks about the mission affects deeply how one does the mission.
The fact that your client, leadership or colleagues believe something about competitors doesn’t mean it is true. We all have blinders on sometimes. So make sure you go in with an open mind.
It is just as important to have clear goals – what decisions will your competitive research impact? Are you looking to refine the messaging? Experiment with the funnel structure? Get inspiration for A/B or MTV testing?
Knowing your goals upfront will help you structure the research to meet those goals.
2. Who’s Your Competition?
Let’s do this! This is the easiest part of the equation because you should know your industry like the back of your hand. Though that shouldn’t stop you from conducting this step to see if there are new players or if anything has changed with the old ones.
To find out who your top competitors are:
- Do a Google search, check Google Trends, SimilarWeb, Compete or Alexa.
- Check the list of presenters and companies running booths at the latest industry conference.
- Ask your customers who else they considered for the same product or service.
3. Competitive Usability Investigation
According to research from Forrester, consumers visit three sites on average before buying or signing up. Does your website stand out in a good way?
Comparative user testing to the rescue: you ask the participants to evaluate your website as well as the websites of your top 2 competitors. To avoid biased feedback, try not to disclose which company you are with, and mix up the order in which you show the websites to the participants. Not to overwhelm the participants, limit the number of websites to 3 per person.
If you are doing a moderated usability study with a sample that is close to your target customers, start by asking the participants to enter a query into Google.
Ask them to use the words they would naturally use when looking for a product or service you offer. What results show up? What do they choose to click? Why? If your company doesn’t show up in the search results or doesn’t get clicked on – you know you’ve got work to do.
Next, do a 5-second first impression test. Give a participant 5 seconds to look at the 1st website and then ask them:
- What 3 words would you use to describe the site?
- What is it about? What products or services are offered and for whom?
- How does this website make you feel?
Then do the same for the 2nd and 3rd website. You’ll walk away with unstructured data as well as summary word clouds so you can quickly see how the first impressions of your site line up with the competition.
Next, test the key flow/the check-out process. Give the participants a scenario where they have to use the website to solve a problem and/or go through the checkout process. After each experience, ask:
- What was the worst thing about your visit to this website?
- What aspects of the experience could be improved?
- What did you like about the website?
- What other comments do you have?
Once the participant has gone through all the websites, here comes the big question:
What experience did you like better? Why?
Common themes in the participants’ responses are a great foundation for hypotheses.
Karl Gilis, web usability consultant and international speaker, is a big fan of comparative user testing:
Don’t forget to do your own heuristic homework and go through the checkout process yourself.
Things to pay attention to:
- Steps that don’t make sense (from your customer’s perspective).
- Steps that are combined or eliminated compared to your funnel (maybe you don’t need them either).
- Upsells and cross-sells (are there additional revenue opportunities you too could be leveraging?)
As you are doing your analysis, write down your observations, take screenshots and give them descriptive names to make it easier to browse later.
André Vieira, Senior Conversion & Marketing Analytics Manager at XING, finds CRO extremely useful for ideation purposes:
Karl Gilis recommends to go beyond your main competitors, and look at websites in different countries or similar pages of websites out of your business area: “If you sell something online, every shopping cart or checkout procedure can be an inspiration.”
4. Competitive Value Proposition Investigation
After leaving your website, most people will remember up to three reasons to buy from you or sign up for your service. Most likely they’ll only remember one – your main selling point. What is it on your website? does it reflect your competitive advantage?
To create a value proposition that really differentiates your offer, you have to know how the competitors position themselves.
- Points of Parity (POPs) are the features you offer that are important to your prospects, that you also share with your competitors.
- Points of Difference (PODs) are the features that are important to your prospects and not available from your competitors.
- Points of Irrelevance (POIs) are features that you customers don’t really care about.
Your PODs is how you win the game.
A word of caution from Chris:
Tony DeYoung, SEO and CRO consultant, uses competitive analysis to craft effective value propositions for his clients:
5. Interview Your Competitors’ Customers
Competitors’ customers are worth their weight in gold. Not only can they tell you how satisfied they are with the competitor’s product or service, they can also clue you in as to why they picked the competitor in the first place.
To get a hold of your competitors’ customers, use your network – Who do you know? Who do they know? Also try “snowball recruiting” – ask every research participant who they can introduce you to for subsequent interviews. You could ask your current customers to recommend their peers for the study (offer compensation for both parties).
Sean Campbell recommends asking your competitors’ customers these questions:
- What caused you to start looking for a solution?
- What were your top 5 buying criteria – in order of importance?
- What were the main reasons you chose the company you did?
The good old NPS survey can also come in handy. Ask:
On a scale from 1 to 10, with 10 being “Extremely likely”, how likely are you to recommend the competitor’s product to a friend or a colleague?
Please explain why you have chosen [number].
Having this information about your competitor will give you a strong edge.
6. Competitive Analysis for Design
Even though design is just one part of the conversion puzzle, it is an important element of overall CRO success.
Katya Lombrozo, Growth Designer, always does competitive analysis as part of her creative process:
Khattaab Khan, Director of Experience Optimization at BVAccel, also uses competitive analysis to benchmark UX/UI and gauge to what the users are most responsive:
7. Quantitative Competitive Investigation
You can pull a wealth of data about your competitors from SimilarWeb, including their traffic volume and key traffic sources, their organic and paid keywords, including ‘Google not-provided’ keywords.
With SEMrush you can find out what are your competitors’ best performing keywords. You can also get insights into your competitors’ strategies in display advertising, organic and paid search, and link building.
Armed with your competitors’ most effective keywords, you are in a great position to craft irresistible copy variations.
Here’s Tony DeYoung explaining his process:
8. Functional Investigation
Studying your competitors’ technology stacks can shed light on their level of maturity as a digital marketing organization. You might also get some ideas for tools to try for yourself. BuiltWith lets you take a peek under the hood of your competitors’ websites and find out
exactly what software tools they are using.
Competitive analysis, like money, is a great servant, but a poor master. Being reactive to what the competitors are doing can be worse than doing nothing.
At the same time, knowledge is power – simply knowing how you compare to your competitors in the mind of the customer can make a world of difference.
You may find that adding regular competitive analysis to your CRO process and adapting your strategy based on that analysis, will fuel your creative engine and positively impact conversions. CA doesn’t have to be a standalone herculean effort – you can weave it right into the research you are already doing.