A competitor product is a product, service, or experience your potential customers may choose over yours. Competitive product analysis is a comprehensive report that identifies similarities and differences between your product and similar products from your competitor.
Analyzing competitor products gives you a surprising competitive edge by identifying customer needs, revealing untapped target audiences, and improving marketing strategies.
Regular competitive product analyses are critical to company success and increased revenue, especially when releasing a new product. Let me tell you why.
What is a competitor product?
A competitor product is a good or service which customers may purchase instead of your offered good or service.
Competitor product offerings could be:
Physical goods, such as computers or tabletop games
Digital products, such as ebooks or downloadable PDFs
Live experiences, such as performances or in-person classes
Professional services, such as ride-sharing or consulting
Types of competitor products include:
Direct competitor products: when competitors offer a similar experience at a similar cost to a similar market (e.g., Barnes & Noble vs. Amazon Books vs. Kobo)
Indirect competitor products: when competitors offer a different product for a different cost but to the same market (e.g., vinyl records vs. digital music sales)
Replacement products: when competitors offer alternative products to solve the same problem (e.g., fast food vs. microwave meals at home)
It’s vital to identify competitor products and analyze them for advantages and disadvantages compared to your product, especially if yours is a new type of product.
What is the purpose of a competitive product analysis?
A competitive product analysis helps you identify what your competitor offers, so you can adjust your product to compete better or to fill market gaps.
This analysis gives your product team a competitive advantage in a competitive landscape.
Most insight-driven businesses say that their fields have become more competitive since 2020. Competitor product analysis is more important than ever to keep your product relevant and increase market share.
Benefits of a Competitive Product Analysis
Understanding your place in your industry compared to popular brands
Pinpointing the differences in your product and market them accordingly
Filling market gaps left by your competitors to reach new markets
Identifying weaknesses in your product, then taking steps to change them
Designing a more distinct customer experience to differentiate your product
Collecting actionable insights that are more likely to turn into revenue
Competitor Analysis vs. Competitive Product Analysis
A competitor analysis is general market research on how your competitor or list of competitors operate, how their brands reach specific markets, and how your company can compete with them. A competitor analysis often includes multiple competitors.
A competitive product analysis is a targeted review of a competitor's product. This analysis focuses more on the effectiveness and marketing behind one product, helping you understand how to offer something better to the same market or something new to a slightly different market.
How To Conduct a Competitive Product Analysis
Below are the 9 steps to conducting an easy but effective competitive product analysis. Gathering competitive intelligence can seem daunting, but this analysis template should make your life much easier.
I’ve included actionable items within each step so you can impress your bosses and help increase revenue down the line.
1. Define Your Stakeholders
You need to define who is going to see this competitive product analysis.
Different internal stakeholders will look for different information from the analysis. You should determine what departments are looking for what type of information. This step helps define the data you will need to gather, the project scope, and your budget.
You might prepare different reports to accentuate various facets of your findings or to arrange your results differently.
2. Set Goals For Your Analysis
Setting goals for your analysis will provide focus, direction, and checkpoints along the way. Not only will goals guide you more efficiently and provide data for future analyses, but effective benchmarks can encourage you or your team as you check items off the to-do list.
What is the main goal of product competitive analysis? Your main goal in completing a product competitive analysis may include:
Distinguishing where your product stands in the industry
Comparing strengths and weaknesses to top competitor’s strengths and weaknesses, based on measurable data, as well as anecdotal
Producing actionable data that leads to a specific number of recommendations
Contacting YouTubers who reviewed a competitor’s product to review your product
Better defining your company’s target market vs. actual market
Pinpointing strengths and weaknesses in your company’s analysis process
Completing the analysis in a certain amount of time
This 9-step how-to guide is a list of goals in itself. After completing each step, celebrate in some small way to keep morale high and increase productivity.
3. Engage With Your Competitor’s Product
You must personally engage with your competitor’s product to evaluate it properly.
If it's a physical product, pay for it and use it. If it's a digital product, download it or sign up for it. If it’s a live experience, go out and experience it on the company’s time. Examine how it functions or what works and doesn’t work.
Write down everything about your user experience with the product. Focus on measurable metrics that you can compare to your own product features or against what your competitor is saying about themselves.
4. Examine Your Competitor’s Marketing
This analysis should cover what your competitor says about their product.
Pore over their website, ads, social media, and even their newsletter. That’s right — sign up for your competitor’s mailing list. It’s a direct cheat sheet for everything your competitor thinks is important about their product line and value proposition.
Note everything you found compelling or lacking about your competitor’s marketing. Notice the color scheme, the voice/tone of the sales copy, and the frequency of their newsletter or social media posting.
Also, compare and contrast your own product’s marketing. Stay focused on the specific product’s marketing — not the overall brand’s.
5. Read Competitor Product Reviews
As opposed to the former step, this is when you look at what other people say about your competitor’s product.
Don’t look on the competitor’s website and product pages where they can cherry-pick the customer feedback that appears. Look on Amazon, YouTube, niche review sites, and even Reddit forums for honest customer reviews.
Especially with YouTube videos, be aware of sponsored reviews. However, YouTube might be your best source of high-quality, in-depth reviews since experts are more likely to have the subscribers and view count.
Answer these questions for your analysis:
How was the competitor’s marketing different from actual reviews?
What did the competitor marketing focus on that was never mentioned in reviews?
What did customer reviews say that was never covered in competitor marketing?
Did you find any marketing material that popped up in the reviews? For example, did customer reviews include exact phrasing from the marketing messaging?
How many reviews were sponsored?
How many of the reviews provided the customer with a free product?
Was this competitor product getting reviews on platforms where your product does not have reviews?
6. Compare Your Product With Measurable Data
Compare your product to the competitive product with measurable data points, like monthly customers/users, weight, efficiency, premium options, social media followers, speed, search engine results position, and competitor’s pricing.
Each product calls for its own set of measurable data. A digital good has very different data points from a professional service.
Identify where your product is more robust, weaker, or just different. For example:
Is it easier to use but offers less functionality?
Is it more expensive but lasts longer?
Is it more convenient but of lower quality?
Is it more fun but more exclusive?
The more data points you collect, the better your presentation. Emphasize the most important data points, but don’t completely abandon lesser ones. Less significant data points presented in a non-distracting way can provide additional support to the story and give a more favorable impression of how much work you put into the analysis.
7. Conduct Customer Interviews
This step can be the star of your competitive product analysis: actual interviews with customers of your product and your competitor’s product.
Interviews provide valuable anecdotal evidence while also impressing higher-ups.
This kind of research means you have to call customers: your own and your competitor’s customers who did not choose you.
Whether your product is a SaaS or the newest tech gadget, getting both perspectives is powerful.
Find out why they chose you or the other guys. Learn how they compared your product to your competitor’s product. Figure out what made the difference when purchasing one or the other.
8. Plan Regular Reviews To Track Ongoing Changes
No company benefits from using the same strategy forever. Your competitor doesn’t. You shouldn’t. You should proactively plan regular competitive product analyses to examine how your competitor has changed, how your product has changed, and how you can further adapt.
As time passes, products change, companies grow, and strategies shift.
It is imperative to regularly analyze your competitor, your competitor’s products, and your strengths and weaknesses. Market gaps will reveal themselves, competitor gaffes will occur, and regular reviews help prevent you from allowing mistakes to manifest.
9. Collect Insights For Your Presentation
For some, this is the fun part. For others, this is the most dreadful step.
Collect your insights and data points and compile them into a pleasing presentation. Powerpoint presentations should look professional, sleek, and simple. Prezi, Keynote, and Visme are all great alternatives to Powerpoint that may modernize and improve your presentation.
Here’s where you may include a SWOT analysis (strengths, weaknesses, opportunities, threats). One popular way to organize data is into categories of strengths (helpful) vs. weaknesses (harmful) and opportunities (helpful) vs. threats (harmful).
What is the difference between a competitive analysis and a SWOT analysis? The difference between acompetitive analysis and a SWOT analysis is that a competitive analysis compares a competitor’s product to your own, while a SWOT analysis is simply a way of organizing information. A SWOT analysis can be used during a competitive analysis to arrange data into helpful vs. harmful and internal vs. external. A competitive analysis typically focuses more on the external, but it can be organized in a number of ways.
What should a competitive analysis include? A competitive analysis should include:
Goals and whether you achieved them
Review of budget for this analysis vs. its potential impact
Comparison data of your product vs. competitor product, such as:
Sales, target marketdemographics, price points, premium options, etc.
Different customer journey maps for you and your competitor
Comparison of your marketing vs. competitor marketing
Reviews of both products from different platforms
Contrast of competitor marketing vs. competitor’s product reviews
Customer interviews for both products
How your company and competitor strategies have changed over recent years
Recommendations on how often to conduct future competitive product analyses
Multiple actionable steps based on findings, such as:
New product marketing campaigns, SEOcontent marketing strategies, different product pricing strategies, changes to product development, new features, new hires, or further analysis reports
Put Your Competitive Product Analysis To Good Use
Leverage your product analysis into actionable steps that lead to revenue or other valuable outcomes. If you need freelancers to help you achieve those positive outcomes, use MVP Match to find high-quality tech freelancers.