Developing an MVP starts with idea validation — the process of determining whether your product idea aligns with the current market needs.
Conducting thorough competitor research is an essential part of idea validation and MVP development. Without it, you are effectively blind to your customers’ needs and the market you’re operating in. Consequently, as stats show, you’re 35% likely to fail because of a lack of market need.
Analyzing your contenders is a detail-oriented process — and this article will be your guide as we dive deeper to answer the following questions:
- What is competitive research?
- What does it entail?
- And how can you conduct it for your MVP development?
What is Competitor Research and How Does it Help?
Competitor research is the process of understanding:
- Who are your competitors? Their name, website, market presence, revenue figures, market share, etc.
- What are they doing right? Qualities and features that make them unique and popular among users.
- What are they doing wrong? The flaws that the target market complains about. Examples include features, pricing, customer service, etc.
- How do their customers feel about them? The overall sentiment of the current users found across online forums, review sites, social media, etc.
- How to capitalize on their weaknesses and product gaps? Different ways and techniques you can utilize to fill the gaps left by your competitors.
Ideally, competitor research should give you detailed and authentic insights into your target market, customers’ pain points, and current trends. It should eliminate guesswork and provide you with actionable data about other players selling similar products. Ultimately, it should help you stay ahead of the competition from the very first MVP launch.
Tools and Techniques for Competitive Research
Research begins with the right tools and techniques. Certain online solutions can help you learn about your competitor’s SEO strategies, website performance, and social media presence. Similarly, various research techniques can help you understand how customers generally feel about a competing product.
Online Tools and Platforms
SEO and website analysis tools come in handy when analyzing the web presence of various SaaS ventures. For example, SEO research can help you understand how good their organic (inbound) marketing is. These SaaS tools are available on a subscription basis. Examples of these applications include:
- SEMrush: Helps with learning SEO strategies and competitor keyword selection. For example, if a competitor is ranking well on Google for a particular keyword, you can create better content around that keyword to increase your chances of outranking them.
- Ahrefs: Gives you highly accurate reports on your competitors’ backlink profiles and best-performing content. You can use this information to figure out their backlink strategy and replicate it wherever possible to improve your domain authority.
- SimilarWeb: Best suited for learning where the most traffic comes from. For example, if you find out that a competitor is getting most of their traffic through search but not social media, you can capitalize on this gap and become more active on SM platforms.
Social Media Platforms, Forums, and Customer Reviews
Social media pages and community forums can give you qualitative data about the feelings of your target customers. People share their opinions about various products on such platforms, and other users comment to agree, disagree, or share similar experiences. Some examples of such platforms are:
- Social Media: Your competitors’ pages across social media platforms like Facebook, Instagram, X (formerly Twitter), etc., can give you reliable insights into how customers feel about them. Scroll through their posts to see what the customers are saying and note things they are complaining about.
- Forums and Communities: Relevant subreddits, community forums, Facebook groups, etc., can help you collect real-time data about your competitors’ strengths and weaknesses. For example, you can start a thread in the SaaS subreddit to ask about a particular product and learn how people feel about it.
- Customer Reviews: Present across various platforms like Play Store, App Store, competitors’ websites, Google Maps, Trustpilot, etc., reviews can give you unique insights into the customer sentiment toward competitors. Focus on positive and negative reviews to learn about the strengths and weaknesses of such products.
SWOT Analysis
SWOT analysis can help you bring all the data in one place and interpret it better. It stands for Strengths, Weaknesses, Opportunities, and Threats. Let’s explain each briefly:
- Strengths: Qualities or features that customers like about your competitors.
- Weaknesses: Bugs, poor pricing, lack of features, or anything that customers don’t like about your competitors.
- Opportunities: Gaps or trends you can utilize to become a well-known player in your product category.
- Threats: Challenges (such as a smaller starting capital) that are likely to hinder your startup’s progress.
Collecting the right data through SEO tools, social media, and forums will make a SWOT analysis much easier. Repeat the process for each competitor to have comprehensive data ready to be viewed at all times.
Competitor Benchmarking
Competitor benchmarking is the technique of measuring competing products against specific metrics (or benchmarks). These performance indicators help you understand how a particular competitor performs in different categories.
Examples of such metrics include:
- Product features: Are features relevant, innovative, and user-friendly?
- Customer satisfaction: Are customers satisfied with features, pricing, customer support, or eco-friendliness?
- Marketing spend: How much do your competitors spend on marketing across direct and digital channels?
- Market share: What percentage of sales are generated by a particular competitor in a specific product category?
- Social media presence: Does your competitor have a well-established presence across various social media platforms like Facebook, Instagram, X, etc.?
- Pricing models: What kind of pricing models are generally preferred in your niche? Examples include tiered pricing, one-time pricing, feature-based pricing, user-based pricing, etc.
Use a customizable template by us to streamline competitor benchmarking.
6 Steps for Conducting Competitive Research
Now that you know the common tools and techniques, let us guide you through the step-by-step process of conducting competitor research for MVP development.
1. Understand Different Types of Competitors
Consider direct and indirect competitors to start your research on the right foot. A direct competitor is the one selling similar products to yours. An example of direct competitors would be Slack and ClickUp, as both are project management tools.
An indirect competitor does not sell similar products but a substitute. Examples of indirect competitors are Notion and Medium. While Notion offers a blog writing feature, it also has plenty of other features that Medium does not.
Once you shortlist your direct and indirect competitors, categorize and compare them based on their target audience, market share, or product maturity. This process will help you build a list of most essential features for your target audience and MVP development.
The benchmarking template provided earlier can be helpful during this step.
2. Compare Competitor Features
Comparing different market players across various aspects will give you a clear picture of where each competitor shines and fails. Ultimately, these insights will help you design an MVP strategy that leads to a smooth and profitable launch. Some examples of features to compare are:
- Product features: What are the key features that make this product sell?
- User experience: How user-friendly, intuitive, and navigable an app/website is?
- Customer support: How prompt is the customer support in resolving bugs and complaints?
- Branding and positioning: How well has a rival created a brand and positioned themselves in relation to market needs and pain points?
This detailed comparison will give you plenty of insights to help you build highly relevant MVP features. You can also apply SWOT analysis to each competitor (direct or indirect) during this step.
3. Finalize Pricing Model
Look at each competitor’s pricing models and understand their different monetization channels. It will help you determine the best pricing strategy for your target market.
For example, when we worked on World of Gyms, a personal training and coaching platform, we had to choose between different prices prevalent in the industry. Ultimately, we devised a pricing model where a user would pay based on the services, the coach, and the days of the week they’d train. Our approach was a perfect fit with the niche and the customers.
4. Analyze Competitor Marketing Strategies
Dive a little deeper into your competitors’ marketing strategies. Doing so will help you understand your target audience, what platforms they use, and what kind of messaging they are most likely to respond to.
For example, if you are in an industry that caters to Gen Z (music, art, clothing), you might find that most of your competitors focus on marketing across Instagram. You might also discover marketing gaps that can help you reach more customers than your competitors after the launch.
5. Gain Insights into Customer Experience
Utilize forums and communities to help you gauge customer sentiment, what they like, what they are missing, and how your product can bridge that gap. For example, on this Trello thread, you’ll find a comment from an unsatisfied customer discussing their poor experience with the app.
Also, analyze competitors’ websites and apps (if applicable) to gain insights into their design philosophy, user experience, things to take inspiration from, and things to avoid.
6. Re-examine Competitors Every Quarter
The process of competitor research is iterative. Keep a keen eye on your competitors and repeat the process every quarter to keep up with the latest changes and innovations. The goal is to consistently keep up with the market trends to ensure your product offers the most innovative features and customer experience possible.
Converting Research Insights into MVP Development
Collecting data is one thing; interpreting it is another. Once you have completed the research, the next step is to convert it into actionable data and developable MVP features.
Select Features for Competitive Advantage
After the research, you may come up with several features your competitors lack.
At this point, you must undertake feature prioritization research to shortlist only the most necessary features for MVP development. For this, you can use a feature prioritization matrix, and your previous research will guide you about which features belong where.
In addition to the matrix, you’ll need to conduct interviews and surveys with your target audience. By sharing the list of developable features and asking them about the ones they’d like to see the most, you’ll be able to cut down the list to the most important functionalities.
Consistent Audience Feedback Loop
An audience feedback loop is a system where you are consistently in touch with your target audience to get their reviews after the MVP launch. One example of this is beta testing. By releasing the MVP to a group of first users, you can collect their opinions to refine the product before the big market launch.
Later on, you can introduce surveys, email campaigns, social media campaigns, etc., to collect audience feedback about various aspects of the app, such as:
- Best performing features
- User experience
- Customer support
- Bugs and glitches
- Pricing concerns
FAQs
How can I identify direct competitors for competitor research?
Direct competitors offer similar products/services and target customers like yours. For example, SaaS tools like Trello and ClickUp are direct competitors.
How do you prioritize features for MVP?
After collecting a list of features through competitive analysis, you can use the feature prioritization matrix to shortlist the most needed features. To fill out the matrix, you’ll need to interview your target audience and get their opinions on which features are must-have, nice to have, can be done, and a waste of time.
Summing it Up
Albeit important, competitor research is just one part of MVP development. The entire process is time-consuming and resource-intensive, with little room for failure.
For an entrepreneur, the best approach is to run the business while collaborating with MVP development experts for more technical challenges. With experience developing dozens of SaaS products, VeryCreatives can be such a partner in your development journey.
Our team awaits to hear ideas about your innovative product and help you turn it into a reality.
