At ACME.com, we sometimes start a project by taking a look at market factors – what market niche and customers do our competitors serve? How do we compare? What are industry leaders doing? What new technologies are they working with? What can the analysis tell us about what our competitors know about their customers – who they are, what they need, what kinds of problems they have? A competitor analysis asks strategic questions: What approach should we take? Dan Brown has helpfully explored this issue ( illustration 1), outlining the different types of documents we create depending on whether we are asking questions about user needs, product design, or the strategy we use to meet those needs and succeed in the marketplace.

Our Search UX team has been busy working on an important approach to competitor analysis. Instead of looking at industry leaders, they are asking: What can we learn from less well-known competitors? Maybe they’re working hard to compete with us, harder than the big guys? In the slide decks (below), the Search UX team has a great overview of what the competition is up to.

The Search Product team also looked at competitor products from a user experience perspective – and not just in terms of market niche or positioning. Done this way, a competitor analysis is another way to get at user needs. We reverse engineer competitor products to understand how they might meet user needs asking questions such as:

• Do competitors offer unique, useful functionality?
• Are there examples of cutting edge interface designs that can better serve customers?
• Are there interaction designs that can improve the usability or desirability of the experience?
• What user goals do their products serve?
• Do the features help users solve problems?

Another approach is to look far afield to non-traditional competitors or even to allied industries where leaders provide great functionality even though their domain is very different. What can we learn from leaders in other industries who provide superb a superb search experience, even if their customers are looking for totally different things ranging from books to cars, furniture to smart phones, vacation rentals to airline reservations.

Looking at what the Search UX team found, did anything surprise you? Did you learn about a competitor you hadn’t heard of? Are there ideas we can draw on? How do you think we compare? Let us know in comments.

So when should you use a competitor analysis?

If there’s time, a good survey of the competition is always useful. You can get the most out of this tool, though, if you’re dealing with these circumstances:

• building a product or feature from the ground up and have no user feedback from which to draw.
• learning who targeted consumers are or about the subject matter itself. A competitor analysis can help you understand both.
• creating a transaction-based application. A competitor analyses can turn up results that are usually based on customer feedback.
• working on a complex application or large-scale site.
• facing an aggressive market and need to understand the competitive environment for tactical and strategic innovations.

What is the best way to present the findings?

One of the hardest parts of product development and user experience design is documentation. How best to present the findings? Everyone’s busy. We all want quick, at-a-glance summaries of the findings.

How you present the data can range from spreadsheets to slide decks to multi-dimensional data visualizations. There’s no one right answer except this: know your audience. Package the message in a context that works best for the audience. For now, here are some examples of how product managers and user experience professionals make summarize and share the results of the analysis:

• Comparisons using tables, charts, spreadsheets
• Narrative reports highlighting takeaways
• Slideshows or written reports focusing on each competitor
• A grid comparing and contrasting features
• Plotting scores on continuum, X and Y axis

By far, the best discussion of the topic of how to actually present your findings is from Dan Brown of Eight Shapes. Dan wrote the seminal text on the topic, Communicating Design: Developing Web Site Documentation for Design and Planning. You can read an excerpt from his book, a chapter on Competitive Reviews.

Resources:

1. Communicating Design: Developing Web Site Documentation for Design and Planning by Dan Brown (excerpt)
2. Designing for Interaction: Creating Innovative Applications and Devices by Dan Saffer
3. User Experience Re-mastered: Your Guide the Getting the Right Design by Chauncey Wilson
4. Competitive Analysis: Understanding the Market Context, by Jason Withrow at Boxes and Arrows
5. Differentiating Your Design: A Visual Approach to Competitive Reviews by Michael Hawley at UX Matters