How to conduct competitor analysis in the UX project
Competitor analysis involves collecting data on the user experience of different products that customers use to fulfill their needs. This research enables the UX team to make informed decisions about future UX solutions and identify opportunities for improving and differentiating their products.
From this article, you’ll find out:
— what are the benefits of assessing and comparing competitors;
— how to identify the UX competition;
— what are the five different types of competitive analysis.
What are the benefits of analyzing competitors
- Competitor analysis allows you to assess the strengths and weaknesses of competitive solutions, understand how well competitors meet the expectations of the target audience, and discover unresolved users’ needs.
- By identifying flaws or gaps in the market, businesses can find opportunities to differentiate their products and gain a competitive advantage. In other words, you’ll discover what functionality you can implement that your competitors don’t have so that people choose your product.
- Analysis of the competitors is the clue to understanding industry standards and best practices, gaining inspiration and visual experience.
- This research helps you understand the industry and domain of the work and better understand the overall context within the project.
- By conducting a competitor analysis, the UX team would be better equipped to ask more specific and focused questions and hold work meetings more effectively.
How to identify the UX competition
To define UX competitors, it is necessary first to identify the target audience and their particular needs. All solutions and options customers might use for fulfilling their needs are the potential competitors.
For a taxi service app, direct competitors would be other taxi providers in the same market. Indirect competition in this context would involve evaluating alternative transportation solutions that users might employ to travel from point A to point B. These might include walking, cycling, or using electric scooters, as well as using car-sharing services or even remote options such as Zoom.
By considering both direct and indirect forms of competition, the UX team more thoroughly understands users and their options. Such understanding would result in UX solutions that are more finely tuned to the needs of their target audience.
Five types of competitive analysis
We have identified five primary forms of competitor analysis among many and will provide an overview of them. It is unnecessary to employ all methods concurrently; select the appropriate techniques for a given project.
1. General overview of competitors
To conduct a comprehensive competitor analysis in UX, it is important to first conduct a general overview of the market by searching online and identifying similar available products or services. It should be followed by creating a list of direct competitors and recognizing all possible ways and options customers might use to fulfill their needs, which will help form a list of indirect competitors.
After putting together a list of competitors, it’s crucial to document the findings and include pertinent data that are useful to the designer. This might include details like the number of users, target audiences and markets, and a rundown of features. Gathering this information can provide valuable insights into the competitive landscape and help guide the design decisions for the product.
Tips on how to conduct a general overview of competitors:
- Ask stakeholders for insights and data from previous competitor analyses.
- Use incognito mode when googling to avoid personal search history influencing results.
- Use services like Similarweb, Crunchbase, or Trustpilot for competitor information.
2. Using a competitor’s product (UX walkthrough)
A UX walkthrough is a process where a UX designer goes through a competitor’s product or service from a user’s perspective to identify strengths and weaknesses and gather insights that can be used to improve their own design.
During a UX walkthrough, a UX designer may take notes, capture screenshots, and make observations about the competitor’s user interface, user flows, and overall user experience. They may also compare the competitor’s product or service with their own and identify areas where they can differentiate or improve their offering.
Tips on how to conduct a competitor UX walkthrough:
- Interact with the product as if you were a user.
- Take screenshots of each step you do or run a video screencast.
- Make notes to document your positive or negative impressions.
- Put all screenshots with notes into an interactive board such as Figjam or Miro.
3. Reading competitors’ reviews
When a designer conducts competitor analysis, they may search and analyze user feedback about competitive products. This involves gathering and reviewing user comments, ratings, reviews, and feedback about competing products or services from various sources, such as app stores, review websites, forums, and social media platforms.
By analyzing this feedback, designers can gain insights into the strengths and weaknesses of competing products, as well as identify areas for improvement in their own product’s design and features to meet user needs and preferences better.
Tips on how to collect user feedback about competitors:
- Check App Store or Google Play user reviews for app competitors, noting any problematic aspects and feature feedback.
- For non-app products, Google “product name reviews” and check user review websites or platforms like Reddit.
- Check if competitors have their own feedback forums or sites.
- Add user review findings to your competitor research database/board to enhance your collection of insights and screenshots.
4. Comparing competitors’ functionality
Comparing the functionality of competitor products in UX requires conducting a Points of Parity (PoP) and Points of Difference (PoD) analysis. The PoP analysis involves identifying features or attributes that are commonly found in all products within a category. Conversely, the PoD analysis involves identifying features or attributes that differentiate a product from its competitors.
By identifying areas of similarity and difference, designers can better understand the needs and preferences of their target users, as well as the strengths and weaknesses of their competitors. This, in turn, can inform the design and development of a product that delivers a superior user experience and stands out from the competition.
Tips on how to collect user feedback about competitors:
- You need to find which functionality is common to your competitors’ products and which is different. Focus on 3-5 key competitors.
- Create a table with the competitors listed as columns and the functionalities listed as rows, marking the presence or absence of each feature.
- Use color coding to highlight key insights.
- Arrange results as a table or an interactive board.
5. Collecting UI patterns and components
Collecting UI patterns from competitor analysis is a crucial activity in UX that involves identifying and analyzing the design elements and features of competitor products. This activity allows designers to understand the different approaches and solutions used in the industry.
Once the UI patterns have been collected and organized, designers can analyze and evaluate them. This analysis can help identify which patterns are most effective and efficient for achieving specific goals and inform the design decisions for their own product.
Tips on how to collect UI patterns and components:
- Take screenshots of all the main screens along the primary user journey to capture all UI patterns.
- Structure all screenshots in a way that makes it easy to find interesting patterns or components.
- If the product is not publicly accessible, search the web for screenshots or YouTube tutorials showcasing the relevant screens.
By analyzing competitors’ UX designs, you can identify opportunities for improvement and innovation, make informed decisions, and create designs that better meet user expectations. It also helps differentiate your product from the competition and create a unique user experience that sets your brand apart.
If you require a professional team to perform a competitor analysis for your product, feel free to contact us. We’ll be delighted to offer our assistance.
Staying up-to-date on your business growth and stimulating its constant development requires tracking KPIs – key performance indicators. They show essential information about how business is performing and help you make data-driven decisions.
In this article, we’ll focus on SaaS (Software as a Service) companies and outline what KPIs they should monitor (some of them are applicable to other types of businesses as well). And as Craft Innovations works in the User Experience design field, we will highlight how good UX design can impact these metrics.
Metrics SaaS companies should track
Here we gathered a list of common SaaS product metrics and a brief description of each.
Monthly Recurring Revenue (MRR)
The total amount of predictable recurring revenue generated from customers each month. MMR helps subscription-based companies estimate the current financial health of their service and do financial forecasting and planning.
Annual Recurring Revenue (ARR)
The total amount of predictable recurring revenue generated from customers each year. This metric best suits companies that sign most customers to a term of at least one year.
Customer Acquisition Cost (CAC)
The total cost of acquiring a new customer, including marketing and sales expenses. Basically, it shows how much money and effort you need to persuade a customer to buy your service.
Lifetime Value (LTV)
The total revenue a customer is expected to generate for a company over the entire time they use the product. It’s a fundamental metric in subscription-based business models, along with MRR.
The difference between revenue and the cost of goods sold, is expressed as a percentage of revenue. This indicator helps to understand how profitable your business is.
Gross Churn Rate
The rate at which customers cancel their subscription or stop using the product, expressed as a percentage of total customers.
Net Churn Rate
The rate at which customers cancel their subscription or stop using the product after considering new customer acquisitions, expressed as a percentage of total customers.
The contrast between gross churn and net churn lies in whether expansion revenue is taken into account. Gross churn offers a more truthful representation of lost revenue, as it does not include upsells or add-ons. On the other hand, net churn provides insight into the revenue changes that can be expected from existing customers.
Monthly Active Users (MAU)
The number of unique users who actively use the product each month.
Monthly Unique Visitors (MUV)
The number of unique visitors to a website or application each month.
A measure of how actively users use the product, such as time spent on site or frequency of use.
The percentage of visitors to a website or application who take a desired action, such as making a purchase or signing up for a free trial.
Average Revenue per User (ARPU)
The average amount of revenue generated per user over a specified period of time. This metric is also used in calculations of MRR and LTV.
A measure of how likely users will continue using the product over time. The measurement of the metric based on calculation of DAU (daily active users) / MAU (monthly active users).
The percentage of users who remain active after a specified period of time, such as one month or one year. It reveals the extent of the SaaS company’s revenue regardless of whether it gains new clients or not.
How product UX design can influence each of the above SaaS metrics
User experience or UX design determines a user’s overall experience when interacting with a product or service. It focuses on the user’s journey, the emotions and behaviors associated with the product, and its overall usability and accessibility.
How to tell that UX design is good? It’s unnoticeable. If you have no confusion or problems while interacting with the product and notice no logical gaps, UX design is good. People usually don’t think, “Wow, what a great usable, enjoyable, and accessible service”; they take it for granted. But when it’s not seamless, users will notice it. And that means UX design is not good.
Here we explain how the quality of UX design influences each of the business metrics.
- Monthly / Annual Recurring Revenue (MRR): Smart UX designers focus on making it easier for customers to subscribe and pay for the product, using wite behavioral and design patterns to achieve that. As a result – the growth of MRR or ARR.
- Customer Acquisition Cost (CAC): Clever UX design and actionable UX writing influence the conversion rate of visitors to paying customers, increasing the marketing ROI and, as a result reducing the cost per acquisition and lowering CAC.
- Lifetime Value (LTV): Customers’ satisfaction and engagement increase if they enjoy their experience with a product o service. All like to feel good. The main goal of good UX is to make users feel great and help them achieve their goals. It leads to higher LTV as users are more likely to remain subscribers for longer.
- Gross Margin: In parallel with the growth of conversion rates, convenient UX design reduces the number of customer requests to support services and influences price elasticity so you can keep the price vs. competitors longer or even increase it.
- Gross Churn Rate: UX design can improve customer satisfaction and reduce customers’ likelihood of canceling their subscriptions or stopping using the product.
- Net Churn Rate: As with Gross Churn Rate, seamless UX design can reduce the number of customers who cancel their subscriptions, leading to a lower net churn rate.
- Monthly Active Users (MAU): UX design can increase the number of users who actively use the product each month by making it easy and enjoyable to use.
- Monthly Unique Visitors (MUV): Good UX design can increase the number of unique visitors to a website or application by making it more appealing and easy to navigate.
- Engagement: Smooth and consistent UX design can increase user engagement by making the product more enjoyable and rewarding to use.
- Conversion Rate: UX design can increase the conversion rate by making it easy and intuitive for visitors to take the desired action, such as making a purchase or signing up for a free trial.
- Average Revenue per User (ARPU): With flawless UX design ARPU can be increased by making it easier for users to discover and purchase additional products or services.
- Stickiness: When users are satisfied with UX design, they spend more time and increase the recency of interaction with a product, which increases stickiness.
- Retention: Good UX design can improve retention by making the product easy to use and reducing the likelihood that users will stop using the product.
As you see, UX design is an essential element of success for any SaaS business. It not just creates a positive user experience and makes customers enjoy your service, but even this is enough. UX design also helps to reduce customer support costs, stimulate users to make purchases, improve the overall brand perception, and attract more customers.
Contact us if you need to make a good UX design from scratch or conduct a UX audit to find the gaps in customer expectations and opportunities for business improvements.