Evaluating the Competition Through Online Surveys

There’s an old saying, made famous from “The Godfather” movies; “Keep your friends close, and your enemies closer.” While we may not think of our competitors as our enemies, we definitely need to know what they’re up to if we want to stay in the game. Their strengths, weaknesses and key activities are all key pieces of information, and online surveys are an excellent tool for gathering them.

Keeping them close

Let’s think about this in terms of the key questions you’d probably like to answer about your biggest competitor.

  • Do you share customers? Do you know what percent of your target market uses your products, your key competitor’s products, or both?  Knowing this could be critical to your marketing strategy. A large overlap suggests customers may consider your products equivalent, so you may need to do more differentiation. In contrast, a small overlap may warrant studying the groups with which you’re doing better — or worse — than the competitor in your target market. This is also the kind of data that can be valuable to track over time; is the overlap increasing or decreasing?
  • Which types of customers like you best?   Do you know if your competition is stronger or weaker in specific demographics than you are?  Very often marketers are interested in reaching a specific customer segment with new products, messaging, or promotional efforts. But before you make these investments, get a reality check. Do you want to pursue a strategy of increasing sales to women if your competitor already dominates that market? A couple of questions in an online survey to look at your competitor’s penetration into the demographic of interest could be very important information for you to have.
  • Where do customers buy from them, and why? What’s working for your competition? What promotions and sales channels are effective for them? This is pretty straightforward information to collect in an online survey, but you have to be careful. Because you’re using AYTM, the online survey is blind, but you still don’t want to tip your hand. If you ask about only two brands (your and a top competitor’s), the participants will likely assume that one of them is the sponsor, and that might bias responses. Instead, begin by asking what brand of product “X” they’ve purchased in the last, say, 6 months, and then ask them why they picked that brand.  Was it a coupon, a bundle or some other promotion?  Was it availability through a specific online store or specific retail store or just chance?  If a large number respond that they used a competitor’s coupon, you’ve learned that that company has a very effective coupon strategy — an important piece of competitive intelligence. Likewise, if 70% of the folks who purchased a competitor’s product did so online, you’ve learned something about what kind of channel options are working best for your competitor.

Keeping them closer

At its core, competitive analysis is the art and process of learning everything you can about your “enemies” — your competition — so that you can compete more effectively. And to really understand the competition, you have to get close. Online surveys give us access to information that often isn’t available otherwise, especially if you’re competing with privately-held companies that don’t disclose a lot of information.  But remember that other famous Godfather quote, “Never hate your enemies. It affects your judgment.”  The same applies here; digest the online survey results objectively, even if they deliver you bad news.

ABOUT THE AUTHOR: Kathryn Korostoff
Kathryn Korostoff taught market research best practices at Ask Your Target Market, and is the president of Research Rockstar, delivering market research training and support services. She can be reached at KKorostoff AT ResearchRockstar DOT com.