Every business has competition. If you find yourself thinking about launching a business into a market that has no competition, chances are either you did a bad job in your competitive search or you’re solving a problem that doesn’t exist. Over the past few months, I’ve done a lot of research on SellFire’s major competition. As it turns out, doing a competitive analysis is a time intensive task. However, having gone through the exercise I now have a greater understanding of my competitor’s strengths, weaknesses, and size. This is valuable information that I will use to decide my direction. In this post, I am going to go over the general methodology that I used to piece together the competitive landscape in the affiliate marketing industry. I’m not going to talk about my specific competition in this post, that will come later. My hope is that people will be able to use these tips to assess the competition for any internet based industry.
During my analysis, I was focused on finding, assessing, and sizing my competitors. During finding mode, I was trying to just become aware of all of the competitors in the field. During assessing mode, I did a detailed analysis of their service or product and of the public sentiment towards the company. During sizing, I was trying to ascertain how many customers and how much revenue my competitors have. In addition, I was also trying to assess how big the market is in general. To accomplish my search, I used a variety of tools and techniques. I’ll explain each one in detail.
Internet Forums and Blogs
When sizing up the competition, internet forums and blogs that focus on your niche or customer segment will be your best friend. These sites tend to attract the die-hard customers and players in your industry. The contributors to these sites have in depth personal knowledge and experience and they are giving it all away for free. In addition to reading new posts on forums and blogs, you should also search through their archives for helpful posts. The posts on forums can help you uncover competitors you’ve never heard of. They can also give you the inside track on what your competitor’s customers think about their product. In the internet affiliate marketing space, the most popular forum is abestweb.com. It has been a wealth of information for me.
Good For: Finding and Assessing
Compete.com
Traffic estimation sites like compete.com and Alexa help give you an idea of how much traffic your competitor’s sites are receiving. This information can give you insight into the relative popularity and success of each company. Also, if you draw up some assumptions about your competitor’s AOV and conversion rate, you can come up with a rough estimate for their revenue as well.
Good For: Sizing
Search Engines
Of course, Google is indispensable when conducting any type of search online. However, there are a couple of tricks that I used that can help you uncover valuable content and customer sentiment. The first trick is to search for a few of your most prominent competitor’s name in a single search. For example, search for “dell hp apple gateway”. This type of search usually brings up content that is comparing and contrasting the company’s products or services. Very valuable information.
The second trick I used is to search for a competitor’s name along with both positive and negative adjectives like “awesome”, “stinks”, “expensive”, and “affordable”. While the returned content is the most valuable part of the search, the number of results returned by each query can give you a non-scientific inclination towards customer buzz.
Good For: Finding, Assessing, and Sizing
Market Research Firms
Perhaps the most direct way to go about assessing your competitors is by commissioning a market research firm to do it for you. I didn’t go this route because it’s very expensive (expect to spend more than $10k) and it also would not leave me with the intimate, first hand knowledge of the industry sentiment I got by doing it myself. However, if you have the cash but not the time, it might be something worth considering. However, in my research I did benefit from a research paper published by a marketing research company about the affiliate marketing industry in general. These papers can be a less expensive way of getting projections on market size and direction. You should search forrester.com for any papers that may be relevant to you.
Good For: Assessing and Sizing
SEC Forms/Investor Reports
If any of your competitors are publicly owned, then you will find a wealth of information in the reports that they are obligated to submit to their investors and the SEC. These reports can tell you information on a company’s revenue, customer count, growth, direction, and risks. In my industry, all of the primary competitors are privately owned so I couldn’t use investor reports to size up the competitor. However, by looking at the reports for companies that are in the general affiliate marketing industry I was able to get an idea of how big the market is in general.
Good For: Assessing and Sizing
Open Site Explorer and SEO Tools
SEO tools like SEOMoz’s Open Site Explorer are great way to assess who is linking to your competition and where they are getting their “juicy links” from. This can help give you an idea of the “presence” each company has in the industry. This information can also be used to help you formulate a marketing plan.
Good For: Sizing
Google Alerts and Google Trends
Google publishes two helpful competitive analysis tools. The first one, Google Alerts, is a tool you can use to keep up to date about what people are saying about your competition. You simply create an alert for each of your competitor’s names and you will get an email from Google anytime they discover a page with a new mention of that name. Google Trends is a tool that you can use to determine how often people are searching for your competitors and how it has changed over time. However, it seems to only work for terms with a larger search volume. For that reason, Google Trends wasn’t too helpful for me.
Good For: Finding, Assessing, Sizing
Your Competitors Themselves
Perhaps the most obvious way to size up your competition is to become a customer of them yourself. Put yourself in the mindset of the customer and use their service as a customer would use them. Where do you find yourself being delighted, excited, confused, underwhelmed, or unsatisfied? How is their customer service? How is their ordering process? Being a customer of your competitor will help you see them in a whole new light.
Good For: Assessing, Sizing
So, those are techniques and tricks I used during my competitive research. As you can see, it is still ongoing. A successful company always needs to be keeping an eye on the competition. So what about you? What techniques have you used?
