Saas competitive analysis in 2023 is essential if you want to gain more customers and retain the ones you already have. The number of saas companies is rapidly growing. Since 2015, the SaaS industry has grown from $31.4 billion to an estimated $1617.1 billion in 2022.
Considering these numbers, companies should find their way to stand out from the crowd and find their place in the market. But not only! With a competitor analysis, you can improve your positioning, find new markets, and discover discrepancies and weaknesses. Competitor analysis is not something you do once. It is important to regularly reassess and update your competitive analysis as your company grows and evolves to ensure that the strategies and insights you rely on are still relevant and practical moving forward.
And if you have a SaaS company, this research can help you effectively map out your product features. Understanding the features and functionality of your competitors’ products can help you to determine what parts to include in your product or how to improve existing offerings to meet customer needs better. But let’s start from the beginning.
What is a competitor analysis?
Checking out the competition is all about keeping an eye on what’s already working in your market. Competitor analysis involves taking a look at other companies that offer similar products or target the same customers as you and analyzing their sales and marketing strategies. In other words, it’s a process of understanding what your competitors are up to.
Having a clear picture of what you’re looking for is key. Begin by defining objectives for why conducting this analysis is crucial to you. Once you have this down, you should have an idea of where you’re going.
How to do a SaaS Competitive Analysis
Identify competitors
Beware, two types of rivals threaten your success; keep a vigilant eye. Okay, we might have taken it too far, but you get the idea.
There are direct competitors that offer similar products or solutions to you. For instance, if you developed an HR management software, a direct competitor would be another HR management system. They probably (read it: better) have a few different features, but as long as they’re in the business of digitalizing HR, they fall under direct competitors.
Indirect competitors, on the other hand, might not even be in the same industry, but they target the same persona as you do. Consider the HR management software. Who is your target audience? Most likely, businesses, with many of them belonging to the technology sector due to their tendency to digitize their processes. However, they also desire an efficient CRM system, email marketing software, social media scheduling tools, and more. You will face competition from all these providers to capture your potential customer’s attention. You must make it to the top of their list of choices when they prioritize where to allocate their funds. In this case, you want to know what others are doing to sell their products and grow their business.
Before you get overwhelmed, not every business that falls into those categories is your competitor. You want to choose your opponents based on your values and positioning.
Examine their sales approach and marketing initiatives
Start from the top. What’s their customer acquisition strategy? What channels are they using, and how are they using them? Are they offering discounts? If not, can you afford a few discounts? A common mistake when conducting SaaS competitive analysis is mimicking what your competition is doing. Focusing too much on matching them. Do you want to find gaps in what they aren’t doing?
Competitor research should help you stand out from the crowd, not match them.
The same goes when looking into their marketing strategy. Go over their social media accounts. Are they active? If so, what’s their tone of voice? Pick on every word they use because their copywriting has the data to support each one in that Instagram description. Investigate their paid media approach using Meta’s Ad Library or simply look for the ads category in their Linkedin profile.
Website, SEO & Content Strategy
Now that you’ve scrapped all their social media platforms, spend some time on their website. Same as you might have, your competitors have spent time and money creating a website that will support the buyer’s journey. It is crucial at this stage to evaluate not only the website’s content but also assess its structure, UI/UX design, navigation elements, presence of a chatbot, and other components that enhance user experience.
There’s so much you will figure out on their website. Check for lead magnets and newsletter – if they want, you can subscribe and see their outreach strategy. Do they have a blog? If so, what content are they sharing, and how often? You want to keep a few notes here and don’t hold back on getting a few article ideas for your blog.
To help you out here, consider investing in tools like Semrush or Ahrefs. They will give you a full report on your competitors’ SEO efforts, their ranking, and keywords and even download a complete competitor analysis provided by their data.
You can use that to conduct your SEO strategy and surpass their ranking. Companies have attempted to rank for their competitors’ names, and they are not squandering their resources.
Key for SaaS competitive analysis: Check reviews and feedback
This is essential for Saas competitor analysis. It’s time to see the other side of the medal. What are the customers’ opinions about their product or service? There are a few ways here:
- Check SaaS product review websites
- Look at their product feedback on AppStore or Play Store or App Store
- Google them. The simple search “ reviews.”
SaaS Competitive Analysis: Evaluate the gaps
Now that you have the data and tools, it’s time to take a step back and evaluate. What should you do with all this information? Conduct a framework that compares you and your competitors to find gaps and your strong points. There are three types of frameworks that you can use or even combine.
This is a portfolio management framework that helps evaluate products in a better manner. The matrix reveals two factors you should consider when deciding where to invest; company competitiveness and market attractiveness. The relative market share and growth rate are the underlying drivers of these factors.
The Growth Share Matrix categorizes each product or business unit into one of four categories: “Stars,” “Cash Cows,” “Dogs,” or “Question Marks.” This helps you understand which of your products or businesses are performing well and which need improvement.
Porter’s Five Forces
The five forces include:
- The threat of new entrants: How easy or difficult is it for new companies to enter the market?
- The threat of substitute products or services: How easy is it for customers to switch to other products or services?
- Bargaining power of suppliers: How much bargaining power do suppliers have in setting prices?
- Bargaining power of buyers: How much bargaining power do buyers have in setting prices?
- Rivalry among existing competitors: How intense is the competition between existing companies in the market?
Porter’s Five Forces (named by Professor Michael Porter in 1979) provide a way to assess the level of competition and determine the potential for profitability in a market.
Perceptual Mapping
Perceptual mapping is a visual representation of how consumers perceive a brand or a product relative to its competitors. The purpose of perceptual mapping is to help companies understand how consumers perceive their brand or product compared to their competitors and identify potential improvement areas. Put simply, it is a way to graphically show how consumers view different brands or products in the market.
Ultimately, whichever framework you choose, think about the goals we set at the begging and tailor the framework accordingly. Nowadays, there are many tools available to assist with competitor analysis but to truly differentiate yourself, we suggest utilizing a combination of both tools and traditional methods.
This analysis should help you make strategic decisions that will help you reach and exceed your business goals.
Meet The Author Of This Article
Hi! I’m Elsa
I’m a Growth Marketer focusing on growing B2B tech companies with a background in content creation and brand awareness.
I progressively work on brand, business, and team growth to help companies achieve their goals. I’m currently using content writing to share my own personal growth path and experience.
