Competitive Analysis is Customer Analysis

“I have been up against tough competition all my life. I wouldn’t know how to get along without it.”
– Walt Disney

Walt was right—competition is the best thing that will happen to your business. Competitors mean you are in a market worth caring about. They will drive you to innovate and deliver a better product. They will make you constantly do better for their customers. Because their customers are also your customers.

Analyzing your competitors—whether it is through traditional market research or through real-time social media analytics—goes way beyond the simple head-to-head between you and a rival. Every time someone talks about your competitors online, you get an insight into what truly matters for your customers. Why is this customer talking about them? Why does that customer love their product? What could I be offering to win them over?

You aren’t really learning about your competitors. You are learning about your market, your brand, and your product. You are learning about your customers and what they want through your competitors. And like these three companies, that learning will allow you to deliver a better product for your customers.

How McAlister’s Deli found a new market thanks to Panera

You can identify consumer trends by understanding conversations in your market. In fact, if you are listening closely, you can identify completely new markets and expand out into new territories.

This is what McAlister’s Deli did in 2016. They had dominated the sweet tea conversation for years but understood they were missing out on a different segment of the market—iced green tea drinkers. They wanted to capture some of this market, but knew that it was dominated by two big players, Panera and Starbucks.

To understand exactly how each of these competitors was viewed by customers, McAlister’s turned to social media analytics. They used a two-pronged approach:

  1. First, understand the general conversation on social media around green tea to help validate the idea and define the right flavor to launch.
  2. Second, see what consumers are saying about the iced green teas of the other brands to see if there was a gap in the market.

The conversation for iced green tea was about its health benefits and naturalness. This led the team towards mango for a new flavor. But this presented them with the second problem—could they own this flavor against the two big incumbents?

The answer was yes. Social media analysis showed that, though the conversation about iced green tea was dominated by Panera and Starbucks, customers of neither were talking about a mango flavor. This intersection of consumers wanting a new, healthy flavor and mango not being in the conversation meant a gap in the market for McAlister’s, which they were happy to fill.

The rollout was a success and mango iced green tea continues to be a popular choice for McAlister’s Deli customers, and continues to be a part of the iced green tea conversation that the company owns. By starting with conversations and understanding customers through competitors, McAlister’s has an entirely new market to call their own.

What United Airlines can learn about their brand by listening to JetBlue customers (and vice versa)

The perception of your competitor’s brand can tell you what you need to work on to win those customers.

Airlines are a perfect example of this. On the one hand, a crowded but not-quite-commoditized market means that customers are constantly on the search for better. On the other hand, the lock-in some customers feel to some carriers means that they are constantly infuriated by the service, and are willing to tell everyone about it.

When we analyzed the social media conversation around frequent flyer programs of six major US domestic airlines we found that:

  1. Everyone loves JetBlue
  2. Everyone hates United

Ninety percent of conversations about JetBlue’s rewards program were positive. Compare that to the 24% of positive conversations about United’s program. Combine that with the fact that United’s program had solicited over twice as many posts as JetBlue’s and you can see a problem for United:

Everyone is talking about them and those conversations aren’t good. This analysis coincided with JetBlue being named one of the top frequent-flyer programs by J.D. Power. For a strategist at United, this data is necessary for what Dr. Ben Gilad, President of the Academy of Competitive Intelligence, and the person who pioneered the field, calls insight management.

Insight management is about using competitive analysis intelligently. Gilad wants dedicated analysts in companies—intelligence teams—who are using competitive analysis and social media analytics to change their leadership’s perspective:

“Companies must utilize the intelligence team specifically for insight management, not as an information search-and-distribute function. At the minimum, institutional intelligence’s crucial role should be supporting a change in perspective. Optimally, it will foster an organizational culture thriving on ambiguity outsmarting stability-seeking competitors.”

United could take this data and ask just that set of questions at the beginning:

  • Why is this customer talking about JetBlue?
  • Why does that customer love their rewards program?
  • What could United be offering to win them over?

Interestingly, the same is true the other way around. JetBlue could learn a lot about how to do better from the conversations around United’s program. The most evident question they should ask is: “If it’s so bad, why are so many people still using it?” If there are over twice as many customers on the United rewards program as the JetBlue, then United must be doing something right. Diving into these conversations can help JetBlue get better just as it can United.

And in both scenarios, customers are going to get a better product.

What Apple now knows about their product because of Google

The talk about your competitor’s product can tell you what to build next and what you are building right.

Google’s new Pixel 3 phone has garnered rave reviews. On social media, people were mostly raving about the unbelievable camera:

The conversation was almost entirely positive about the camera—84% of conversations had positive sentiment. The notch and battery life, however, didn’t get such good reviews:
In both cases, only 29% of conversations were positive. In both cases, Apple, as the main competitor of Google in the smartphone market (though Samsung, LG, or Huawei could also learn from this) now knows something new about the iPhone:

  • People care about the battery life. This is a selling point of Apple products, and the recent iPhone XS Max has a talk time of 25 hours. Google is failing their customers on this point, and those customers that care are now available to Apple. With the right marketing and messaging, these customers that are having a negative experience with the Pixel 3’s battery (or are interested in the conversation around it but haven’t bought yet) can be enticed over to the iPhone.
  • They got the notch right. Potentially as they expected, the iPhone’s notch design is superior to the Pixel’s. This validates their design choices and shows them that they still have the edge on better design.
  • The camera will need to be updated. While Apple might have the superior hardware, even in terms of camera, Google’s edge in software means that pictures taken with the Pixel 3 look much better. If Apple wants to compete on the major feature of a smartphone, they will have to put more effort into image capture capabilities.

Through social media analytics and competitive analysis, Apple could potentially decide to make a massive investment in better camera technology. But they also know that people still prefer the look and feel of the iPhone.

Staying true to your recipe

In April 1985, New Coke arrived. It was marketed as a sweeter, cooler version of Coca-Cola, meant to appeal to a younger audience and get them hooked on Coke. Coca-Cola changed their entire 99-year-old recipe and relaunched.

It was dead just 78 days later.

New Coke came about through competitive analysis. Coca-Cola realized that young people weren’t drinking Coke; young people were drinking Pepsi. As the older Coca-Cola drinking generation started to worry about their wasitlines, the company knew they had to reach out to younger drinkers. They wanted to steal Pepsi drinkers and New Coke was how they were going to do it.

But soda drinkers, young and old, hated it. What Coca-Cola had missed was the conversation. As Coca-Cola president and COO at the time Donald Keough put it:

“The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people.”

Competitive analysis through social media analytics reveals that “deep and abiding emotional attachment.” It tells McAlister’s Deli how much its customers love its mango iced green tea. It tells JetBlue how much its customers love its reward program. It tells Google how much its customers love the camera. It also tells each of their competitors exactly the same thing.

Listening to this conversation and using it for insight management can help you make sure you are making mango iced green tea and not New Coke.

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