Competitive intelligence is now mission-critical for SaaS firms seeking sustainable growth. Per a recent study, 73% of businesses invest more than a fifth of their overall tech budget in this type of intelligence.
At its essence, competitive intelligence entails identifying, analyzing, and comparing key market rivals. For SaaS providers, competitive analysis lends an external perspective that complements internal assumptions. It enables SaaS leaders to uncover blind spots, spark innovation, and unlock growth pathways.
Put simply, SaaS competitive analysis provides an X-ray view of your competitors. It highlights their strengths and weaknesses. Use it to refine product roadmaps, guide marketing campaigns, and improve sales strategies. Competitive intelligence enables data-driven decisions to maintain leadership.
Frequent competitive analysis also reveals areas where your SaaS company could improve. Where can you leverage competitors’ vulnerabilities? And how can you differentiate your solution? The goal is to convert these gaps into a competitive advantage. Leaders who harness competitive intelligence ultimately seize more market share.
When conducting competitive analysis, you'll want to research two main types of competitors that are relevant to your business:
Direct competitors offer similar products or services. They compete for the exact same target customers. For instance, Netflix and Hulu both offer streaming services, so they are considered direct competitors.
These are your closest rivals that you likely benchmark yourself against already. Learn as much as possible about their offerings, pricing, messaging, etc.
Indirect competitors serve the same basic customer needs. Yet, they offer an alternative solution or approach. For example, if you offer live chat software, an indirect competitor might be help desk software. There's overlap in the customer problem being solved, though the actual products differ. Tracking indirect competitors is important to identify potential threats.
Doing an in-depth competitive analysis involves several key steps:
Identify competitors - Make a list of your direct and indirect competitors. Brainstorm beyond just the obvious big players in your space. Look at alternatives, new market entrants, and substitutes that customers may turn to. Cast a wide net here to cover all bases.
Research competitors - Gather intel on competitor products, pricing, marketing, customers, and more. Check their websites, content, ads, social media, reviews, etc. Subscribe to their blogs and newsletters. Of course, you can also leverage tools like Varos to access crowdsourced intel.
Analyze marketing strategies - Look at how competitors position themselves in the market. What messaging do they use? What channels/tactics? How do they market to customers? Copying is ineffective, but you can derive lessons from their strategies.
Compare products/services - Make a grid that lists product/service features side-by-side. See how you stack up versus competitors and what's missing from your offering. Learn what they excel at and use it to identify gaps in your own strategy.
Evaluate pricing - Research the pricing models competitors use. See how they structure plans, tiers, discounts, and more. This may also extend to SaaS benchmarks like user acquisition cost, customer lifetime value, and churn rates.
Read customer feedback - Be on the lookout for reputable review sites and social media. You'll find honest customer feedback on competitors. Look for pain points, benefits, and areas for improvement customers mention. Use this insight to improve your own customer experience.
Identify gaps & opportunities - Analyze research findings to pinpoint where competitors outperform you. Focus on 1-2 gaps representing the largest upside if you addressed them. Opportunities may include adding missing features, adjusting pricing, improving messaging, etc.
Develop competitive advantage - Armed with gaps and opportunities, devise ways to differentiate from competitors. Offer something competitors lack. Fix pain points customers mention, improve UX, lower pricing, and anything you can do to gain an edge. Take the intel and turn it into strategic decisions.
Doing this level of recurring competitive research provides tremendous insight, though it requires significant time and effort. That's where leveraging a competitive intelligence solution like Varos comes into play.
Varos offers SaaS companies robust competitive intelligence through its crowdsourced network. This approach provides up-to-date, unbiased data on competitors aggregated from multiple sources for accuracy.
Varos dashboards enable real-time benchmarking so you can continuously monitor performance versus rivals. You also get insider perspectives from anonymous surveys and interviews. Varos helps you benchmark against competitors, gain insights into anomalies, and make faster data-driven decisions. It simplifies competitive analysis by handling the heavy lifting of research.
When analyzing the competitive intelligence you've gathered, applying proven strategic frameworks adds more structure and rigor to the process. Useful frameworks include:
SWOT analysis: Assess competitors' strengths, weaknesses, opportunities, and threats. Uncover areas you can capitalize on based on weaknesses and threats.
Porter's Five Forces - Use this model to analyze threats from rivals, suppliers, buyers, substitutes, and new entrants in your market.
Growth-Share Matrix - Classify competitors by market share and growth rates. Identify areas to invest in based on relative position.
Perceptual mapping - Visually map customer perceptions of competitors on attributes like price vs. quality. Reveals unmet needs and optimal positioning.
These frameworks help turn disparate competitive data points into focused, strategic insights and recommendations. Focus on applying 1-2 frameworks that align with your current business objectives.
Follow these best practices to get the most value from competitive intelligence:
Varos furnishes turnkey competitive intelligence through its network of 4,500+ companies. With our platform, you gain robust, real-time insights into competitor products, pricing, marketing, and more. Rather than operating blindly, you can make confident, data-driven decisions. Varos gives you the external lens required to delight your customers.
Don't leave your future to chance. Partner with Varos today for the competitive intelligence you need to pull ahead. The first step toward winning starts here.