The client was wondering whether or not to get into a fairly new space in the world of AI. The space is so cutting-edge that companies are still figuring out how to productize their offering. Since they were looking to invest a sizeable amount, they wanted to gain an understanding of the typical clients in the space, the size of the contracts, the pricing models, and what the deliverable would look like.
We compiled a report presented on a video call by Yasen handing them the requested information. The presentation lasted about 20 minutes and then we began an unstructured interview session where the client could ask clarifying questions that took another 10 minutes. The report itself contained information on the average business model across the industry, as well as the positioning of each player, the different pricing options and their benefits, and insightful information on each of the competitors.
The result? Super happy clients who were now confident in what their next move should be.
The first thing was to identify what would that research be used for. Was it for monitoring the competitors, was it for identifying branding opportunities, or was it to enter new markets? We need to know such stuff, so we could present to you only information that would be directly useful to your cause. You don’t need to know the salary range of competitors’ employees if your goal is to expand to a new market. You are far more likely to need the size of the contracts and estimate the money you could make.
So, we got on a call and discussed what their goals were. To protect this information, an NDA was signed to ensure peace of mind.
When performing competitive research, the sweet spot is between 10 to 15 competitors. Everything above that is overkill and inefficient to budget. There’s only so much you could learn and if done right, 10 is plenty.
We research from a consumer perspective because that way, we also get what the whole consumer journey is. So, we created a hypothesis on who the customer is and started typing keywords we thought they’d use. After a few iterations through the use of the Google Keyword Planner, we found about 18 competitors. We determined who the closest, the most distant, and the ones in between were. Since the client wanted to be involved in the process, we showed them the findings and then we narrowed down to 11 competitors spread in the following way:
• 4 close competitors
• 4 middle competitors
• 3 distant ones
How we identified what was close, middle, and distant? After reviewing so many companies, you do get an idea of what service is close to the one of the client. The language they speak, the people they target. It’s evident. Some had a business that was focused on the one the client wanted to get in- they were focusing on 1 product only. Then there were companies focusing on 2-3 products at once, but they weren’t as laser-focused on the niche the client wanted to get in.
The point is you develop a feeling after researching for a bit.
After we agreed on 11 competitors, it was time for the fun part to start- interviewing them. We would book calls with the sales reps of these companies and ask them questions. However, for them to answer we had to behave like prospects.
There is an obvious unethical part about this. To make it morally right, we audited our company and came up with an actual problem we’d need a solution for. That’s the advantage of an agency- flexibility. We are not limited to one direction of business development and this allows us to come up with use cases of potential business expansions. If the right opportunity presents itself, then we are ready to pull the trigger and purchase.
In this case, we killed 3 birds with one stone- we were able to collect the information our client required, we also collected the information for our purposes and solved for the ethical side. Since we had an actual business need, we were also able to act as prospects. The other side can feel the prospect has an actual business need and thus were willing to share more information.
In the end, we successfully collected information from 10 competitors where only 1 did not reply to our request to book a call. However, since we had contextual information gathered from the 10 calls, we were able to recognize the patterns of this 11th competitor and define what their business model, positioning and strategy were. That’s why 10 is a sweet spot when it comes to competitive analyses.
A happy client!
We also followed up with one of the competitors to further discuss our own business need. It was a win-win-win!
If you have a similar need that you would like to discuss, then book a call in the calendar below and let’s talk!
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