In order to stay a step ahead of the competition, today’s businesses need to take advantage of competitor analysis.
Competitor analysis is simple: It’s taking a look at your competitors’ strengths and weaknesses relative to your own. What’s not so simple is being able to do it effectively. After all, it’s not like you know how many customers are coming to each one of your competitors’ locations.
Luckily, It’s now possible to have access to the kind of data that you need. Though there’s no way that you can know about the finances of competing businesses, there is one thing that you do have access to: online reviews.
Reviews reflect the real experiences of customers. By looking closely at customer reviews, you can gain deep insights into the exact areas you and your competitors are excelling.
Why You Need Competitor Analysis
Competitor analysis is necessary for a simple reason: When customers are unhappy with your services, chances are they’ll go straight to your competition. The more data you have available, the better chance you’ll have of retaining your customers, and maybe even winning over some of your competitors’ customers.
Luckily, it’s now easier than ever to get the data you need to perform effective competitor analysis. In the past, you might have had to rely on “gut feelings” to help you make the right decisions. Nowadays, you can use data to deliver exactly what your customers are asking for across all of your locations.
BirdEye allows businesses to have a deep understanding of the market as a whole and where your business stands in comparison to others. We give businesses the same amount of insight into competitors as into their own business. You’ll be able to understand your competitors’ customers just as well as your own.
Not only can you find potential pain points within your own customer base, but you can also see where your competitors are doing well and find ways to replicate their strengths in each one of your business’s locations.
Plus, you can see how well you’re performing in each one of your locations. Maybe you have different competitors at your different locations. For example, McDonald’s might be competing with a Burger King in one area, while it might compete with a Wendy’s and an In-N-Out at a different area. With BirdEye you have the ability to set up specific competitors in each one of your locations.
Three Questions for Competitor Analysis
Here are three questions you can ask yourself to perform competitor analysis, improve business operations, and ultimately drive revenue.
How Do Customers Feel About Each of Your Locations?
When a potential customer is looking for a new business, chances are that they’re going to look at online reviews. After all, research shows that 92% of customers consult online reviews before making a purchase decision.
Imagine this: a customer does a Google search for “restaurants near me”. They’ll probably end up picking the business with lots of reviews and the higher overall star rating. After all, a business with 4.8 stars and 200 reviews looks a lot better than a business with 3.6 stars and 10 reviews.
The best businesses are the ones who are able to draw new customers through customer reviews. In order to be the best business, you need to have quality reviews coming in frequently. After all, having the best service in the world doesn’t mean anything if nobody is able to discover you.
With Rating Reports, you can see your review data against your competitors. You can compare how your business is doing compared to your competitors on a variety of different metrics such as quantity, overall star rating, and recency.
Taking an in-depth look at your customer reviews can help you understand where your business is falling short. After all, if you have 300 reviews while your competitors all have 3, there’s a good chance you’re doing something right. If you’re slightly behind one of your competitors, you’ll know that you have some work to do in getting your customers to write more reviews.
Plus, you’ll have the ability to look at your ratings across business locations. If one of your locations is performing poorly, you’ll be able to know right away. You can use this information to make improvements and drive revenue growth at these locations.
Are Your Customers Promoting Your Business?
Customer reviews aren’t the only form of feedback available for your business. Customer surveys can provide you with valuable data about how your customers are feeling and can help you understand areas where your business needs to improve.
BirdEye offers businesses the ability to give customer surveys. One of these surveys is the Net Promoter Score survey, which allows you to measure overall sentiment, asking customers to rate your business on a scale from 0-10.
“Promoters” are those who rated your business as a 9 or a 10. These are the customers who are most likely to recommend your business to friends and family. “Detractors” are those who rated your business from 1-6. Your Net Promoter Score is determined by subtracting “Promoters” from “Detractors”.
You also have the option to compare your business’s NPS to competitors. Though we don’t have the exact survey data on your competitors, we can estimate your competitor’s NPS through publically-available review data. Reviews that are ranked 1-3 stars are considered “Detractors”, while 5-star reviews are considered “Promoters”.
With this data, you can see how your business is doing relative to the competition. If you have a higher NPS than your competitors and the industry standard, this is a good sign that your business is doing a great job keeping your customers happy.
How are you Performing Relative to Competitors?
Understanding factors such as overall star rating and quantity of reviews can help you understand how each one of your locations is doing. But that data only tells part of the story.
There is another kind of data that ultimately gives more details about you and your competitors’ businesses: review text. Review text can give you detailed information about where businesses are doing well and where they are falling short.
Though overall star rating can give you a general idea of how customers are feeling, you need to look at review text for deeper insights. There are several reasons why a restaurant might have 3 stars. Maybe they have bad service or long wait times. Maybe their chicken is being served burnt. You can’t know exactly what the problem is until you look at what customers are saying.
Unfortunately, it’s hard to sort through the unstructured data of review text. After all, you’re dealing with different customers with different opinions. One customer might love a restaurant’s fried chicken, while another customer might hate it. It’s hard to get an objective picture of which areas really need improvement.
Luckily, data analysis can point you in the right direction. With BirdEye, your business can get insights through our Natural Language Processing engine, Athena. The engine pulls phrases that customers are using frequently, like “bad service” or “cheap pricing” and assigns them grades based on how positive and negative they are.
The engine looks at your customer reviews gives you grades on certain categories like “Customer Service” and “Pricing”. You’ll be able to see how well you’re performing on a variety of different metrics instead of having to manually crawl through every review in search of reliable performance indicators.
Of course, you don’t just have access to the data from your own customer reviews. You’ll be able to see how well you measure up to your competition in multiple categories. Once you identify which competitors you want to look at, the Athena engine will show you their grades on specific categories.
By seeing what customers are saying about you and your customers, you can see the exact areas where your business needs to improve. Perhaps a competitor is outperforming you in “customer service”. With this information in hand, you can retrain employees to better serve customers.
Measuring Business Performance over Time
Once you’ve made changes to your business based on the data, there’s still work to do. You can keep track of the data to see if these changes are helping to retain customers. Keeping track of your NPS and your Rating Reports in the months after you make a new decision can help you understand how customers feel about the changes.
At BirdEye, we make sure to show you how these metrics change over time. That way, you’ll be able to get a clear idea of how customers are responding to adjustments in your operations. After all, it’s possible that one of the changes you’re implementing might not have the desired effect. If you’re tracking customer sentiment closely, you can hit the brakes on the change immediately before you start seeing negative effects on your revenue.
How BirdEye Can Help Your Multi-Location Business Be the Best Business
BirdEye doesn’t just help you stay ahead of the competition. BirdEye helps you handle every aspect of customer feedback. With BirdEye, businesses can get new reviews, manage and respond to reviews from over 150 sites in a single dashboard, automatically share posts on social media, and receive actionable insights through Natural Language Processing.