Understanding Competitors' Audience
A business needs to understand its customers. Whether it is for expanding its market or formulating strategies, gathering information about its customers is essential, but that is just a small part of the process. Since the competitor's audience buys the same category of product or service, it is essential for businesses to use competitive intelligence to analyse consumer behaviour and grasp the buyer personas of their competitors' audience.
Competitive intelligence is the gathering of information about the company’s industry, including its competitors, their products and services and the overall business environment in which it operates. This information helps to analyse the scenario and identify gaps in the competitor’s strategy, based on which the business can develop its own.
One of the most significant aspects of competitive analysis is to understand the behaviour of the competitors’ customers, and here, demographics are no longer enough. Consumer market insights from online conversations on social media, reviews and forums provide real-time and unmanipulated information on what customers are saying about the competitors’ products. It also helps to gain a better understanding of the types of customers who are buying from the competition. With artificial intelligence gaining popularity, businesses now have an easier way to track their competitors’ audience, as well as their needs, behaviour and purchase process.
Applications of Competitive Intelligence
Here are some ways in which artificial intelligence can be used to understand the competitor’s audience.
Creating Buyer Personas
The large volumes of data available online makes it difficult to look through all the data points to identify patterns in the behaviour of competitors' consumers. The advantage of AI-powered consumer market insights is that it is processed within a short time by using a wide range of data points such as past purchase behaviour, online communication, in-store interactions, presenting insights into the consumer’s behavioural patterns. Based on this, more accurate buyer personas can be created for focused prospect generation targeting the competitor’s audience.
Buyer personas are essential for creating more meaningful content, especially for niche products or segments. In Japan, on noticing the growing competition from sochu, an alcohol-based fizzy drink that was gaining popularity among young Japanese women as an alternative to beer, the Coca Cola Company was forced to rework its buyer persona. Based on this, it launched Chu-Hi, an alcohol-based soda.
Gaining Insights into the Audience’s Relationship with the Brand
Understanding the sentiments and emotions of the competitor’s customers is essential for pinpointing gaps or behaviour that can be used to the company’s advantage. AI-based sentiment analysis helps to categorise positive or negative emotions based on online conversations to present insights that are often more accurate than those gathered through market research or focus groups.
Additionally, it can measure the strength of the emotions, and Natural Language Processing, as well as Image Analysis, can capture emotions that go beyond words to present a deeper insight into what consumers love or hate about the competitor’s brand. Accordingly, the company can design its strategy or rework its marketing communication.
For example, loyal customers of Toms shoes don’t look at factors such as comfort or fashion when they buy a pair of shoes from the brand. Their loyalty stems from the fact that they feel good about buying shoes from a brand, which on every purchase, gives away a pair to someone in need. For a competitor in the segment, tapping into this niche would mean reworking their communication to address the emotional connection that the audience has with Toms brand.
Assessing Reactions to Competitor’s Strategies or Campaigns
By gathering competitive intelligence, a company can keep pace with the latest launches and campaigns of its competition as well as the performance of such campaigns. However, often, the numbers don’t reflect audience sentiments. Through sentiment analysis, businesses get the opportunity to gauge the reactions of their competitors’ audiences to communication strategies or campaigns that are directed at them.
In October 2017, McDonald's witnessed a sudden surge in negative sentiments after the posting of a YouTube video that highlighted the drawbacks of the brand. Simultaneously, a positive tweet from a celebrity applauding the rival, Burger King, for its anti-bullying campaign saw a decline in negative sentiments for that brand.
By analysing consumer opinions, reviews and sentiments, the company can identify an unfulfilled need in the segment or even a possible new product idea that none of its competitors has offered so far. It can provide the opportunity to expand its customer base by attracting some of the competitor’s audience.
To counter competition from Amazon, Walmart uses machine learning and AI to create a seamless experience for its customers whether they shop online or at the store. Besides having around 11,000 physical stores, the company has enhanced customer experience through features such as Scan and Go on the app as well as Pick-up Towers.
Discovering Trends and New Opportunities
Trend monitoring is an essential component of competitive analysis as it provides insights into the changing needs and preferences of the target audience. By identifying trends, the company can develop new products to address the needs of the audience (both its own as well as its competitor’s), thereby giving them a reason to switch brands.
To counter the decline in soda consumption in the US due to the backlash against sugar, Coca Cola, which has invested heavily in AI, is looking towards its new beverage, Zico, a coconut water drink blended with cold-pressed juices, to win over consumers.
Taking Action After Gaining Information
By staying on top of what competitors are doing, a company can be more responsive to their actions. For instance, the company can adjust pricing, introduce new products, and take other similar action depending on the needs of the business.
The role of artificial intelligence is to simplify the process of competitive analysis by extracting information from large scale data online, which then can be used to devise more effective strategies. Consumer market insights team can use the information to identify gaps, negative sentiments and trends to help the company gain competitive advantage.