Extensive preparation before software development is a must-have step if you want to lower the risks and make sure that the market will accept your solution. Software prototyping helps with that and more, whether you’re building a startup or developing solutions for existing businesses. This, however, is a complex process with many variables, and competitor analysis is one of those.
Looking at the successful cases of other market players is highly beneficial. You can replicate everything good about your rival’s journey and build on top of that. Learning from others’ failures is an even more powerful tool as it provides risk mitigation and insights into product-killing mistakes.
What is competitor analysis in UX?
It’s a multi-layered process that you can perform according to your business needs. It covers both abstract and tangible aspects, providing you a full picture of what your competitor has been doing for a certain amount of time now.
Here’s a rough rundown of what you can research:
- Features
- Functions
- Design decisions
- Customer flows and journeys
- Emotions and feelings of the customers
This list can be further divided into more points and sub-points based on your preferences and business needs. The general idea is to collect and implement those ideas that can benefit your business and, more importantly, align well with what you want your project to become.
When to conduct a competitor analysis?
There are a few things you should keep in mind if you want to stay within budget and comply with timeframes:
The best time for conducting analysis is during the project discovery or prototyping stages. It gives you the largest amount of flexibility and saves you money long-term. It is always highly advised to conduct any type of in-depth research before development.
Going back to meticulous competitor analysis mid-development will most likely be extremely challenging. You might get sidetracked, lose the vision of your current objective, and spend much more money than you originally planned.
To reiterate: you’re free to do research at any time, yet the optimal timeframe is before development. Keeping track of your competition is always a good thing, though. It helps monitor sudden market changes or breakthroughs you might have missed.
Competitor analysis 101: Which steps should you take?
The general process is fairly straightforward. But to make the most out of the analysis, make sure that every step you take is meaningful and serves a purpose to your business. Otherwise, you’ll just pour resources down the drain without gaining much.
Step 1. Set goals and targets for analysis
Most industries have large and potent competition. You have to narrow down your search and establish clear targets for the whole process.
Who is my direct competitor?
Answering this question will help you determine the area of your search. Consider location, features, means of communication with the audience specific to your field or user type (if any). Target those who you believe provide services to the same target audience as you.
The simplest way to find competition is to search for it online. Research a couple of keywords that you would associate with your business and your product.
Determine which information is required right now to help you make design decisions correctly. Whether it’s the UI, user flows, or functionality – aim for what you consider the most important. It’s also OK to not be completely sure what you’re looking for. In that case, asking for help from a vetted software development company is a solid option.
Indirect competition can also give valuable insights. Some companies may provide only a fraction of the services you offer. Or, they provide the same service but as a part of a larger general package. Either way, there are things to learn from the product, business model, and more.
Come up with a small number of companies that fit the profile and stop there. Different suggestions range from just 2 to 10. Tracking more competitors may yield repetitive results and scatter your resources. Choose the number that you can realistically process without straining your budget and manpower too thin.
Step 2. Collect the data
Now’s the time to start the research. Here’s a couple of things to look at:
- Unique differences from others
- Functionality
- Customer journey
- UI features
- Industry-specific pros and cons
- User reviews
This list can be expanded as your project may require more specific metrics related to your domain. As in the previous step, focus on the things that can benefit your project.
The way you store the data is up to you. You can choose whatever software fits your requirements. Plain old pen and paper are good too, as long as you and your team are comfortable with it.
Step 3. Determine trends and perform testing
It’s not the data but the conclusions it provides. Have an expert perform multiple rounds of usability testing to determine some hidden flaws or solutions that could work for you.
Comparing the results of various competitors should give you a good view of similarities and differences. See how they line up against your ideas, and determine whether these design decisions could play a big role.
Step 4. Analyze and present the data
This step may look a bit vague as the analysis relies on your needs, business goals, tech capabilities, etc. Focus on the decisions you can make based on your findings. The competitor has a neat website, but what makes it click? Is it the fast load time, good marketing copy, or a simple customer journey?
Make these conclusions together with the team. Again, the way you present the information is entirely up to you. But visual graphs, bullet points, and to-the-point takeaways seem to work best in groups of people, especially if the goal is to pitch the idea to potential investors.
Step 5. Iterate if needed
During the research and prototyping phase, the requirements may change. If you feel like you need to revisit competitors and scan them for other specific items, go ahead and do it. Remember your budget, team workload, and timeframes to optimize the results.
What to avoid while conducting analysis?
As during any step of the software development lifecycle, the teams should beware of sidetracking, wasting resources on low-priority items, etc. But competitor analysis has two major pitfalls that can ruin all the progress and discard every bit of data collected.
Not extracting value from the data
The biggest waste of resources is gathering the information without processing it properly. You may find out every detail about the competitor, but how can it improve your project? Try getting insights into the top-priority aspects, and then apply the results to your project.
This is how you get true value from competitor analysis and enhance your business.
Not improving after beating the competition
You can attract users from your rivals, offer a better service, and become more successful than your competition overall. But that should never be a sign that you can stop innovating.
Because the main goal of the whole process should be fulfilling the needs of your users with minimal cognitive load and effort required. Not only will it help you build loyalty, but it will also protect you from other up-and-coming ambitious rivals.