Competitors of different feathers
- Do we need Competitive Intelligence?
- Goals of Competitive Analysis
- Choosing your competitors: Divide and Conquer
- Choosing a competitive analysis Framework
- Competitive Analysis Frameworks
- Gathering Data about your Competitors
- Conclusion
The PMM role is a busy one. It helps set the tone for many other roles and it’s not hard to see why this position would be so important in any company looking towards success! From product positioning, messaging, product launches, sales collateral creation to aiding customer retention the influence is felt across the board. Work starts first with planning then onto execution through campaigns that target customers right down to implementing pricing strategies–the list goes on forever really but you get my drift…
Do we need Competitive Intelligence?
Whether you’re just starting out or have been in the market for a long time, it’s important to always be aware of industry trends.
The spaghetti monster of yore
There are often two camps of thought when it comes to competitive intelligence: The one that watches the competition closely and mirrors their changes, lest they gain an advantage. This can lead into a “spaghetti monster”, a hodge podge of features from all your competitors and at the same time your product is just too similar to other products to differentiate.
The second believes their strategy should not be defined by competition, only by customer voice. Yet, to work without thinking about how this may compare with existing products out there, is throwing caution to the winds and being blissfully unaware until competition hits you in the face.
Actually, there is a more nuanced third stance: One cannot drive a car forward looking into the rear view mirror, but it is still important to know where the other vehicles are on the road to stay safe and stay ahead.
You could be the market leader, or could have positioned yourself as the big fish of a small pond. It is important to know when competition is expanding into your territory or inching into your niche. There is the reason for market pioneers often not being the market leaders. Competition copies the same innovation they do and do it better because of insights gained from seeing the pioneer doing it first.
Goals of Competitive Analysis
Competitive analysis is an exercise backed by a goal in mind. It has a huge set of potential actions and launching into Competitive Intelligence without a goal is a surefire way to burn your time and money. If you are getting into a new market, the goal can be completely different from an existing product. Here are some possible goals
- Entering New Markets: One of the most important things to do before entering into new markets is analysis of competitors. This will allow you know what they are up against, their strengths and weaknesses etc., which can help with your own product/service launch strategy
- Market Suitability : How can you know if your business is still the best choice in its niche market? A strategic analysis of competitors by looking at their products, services, prices and more helps understand where you stand apart from others within this niche and how relevant you still are to your market.
- Customer Segmentation: Which customer segments are your competitors targeting? What types of customers gravitate toward each different competitor in the market?
- Competitor Discovery: find aspiring competitors which can become your direct counterparts in the future.
Your goals may differ from one Competitive Analysis session to another, but it is important to go into the session after deciding on the goal to ensure your time is used effectively and not lost in the sea of exploration and possibilities that is Competitive Intelligence.
Choosing your competitors: Divide and Conquer
So you sit down to list all your competitors, only to find what you expected to be a list of 5 competitors expanding on and on to 30 and beyond. Oh the horror! What now? Obviously trying to track 30 competitors is an exercise in futility.
The solution is to find an efficient way to split your time amongst them. All competitors are not equal.
Direct Competitors
There are some who compete for the same target audience as you and have a rather similar product. So they position, message and price very close to you. These are direct competitors and need to be checked on regularly.
You can find them from your existing customers, ask them which companies they were evaluating before deciding on your own. Your sales people will also be a great source of information on this as they will often have to field questions about direct competitors.
Your customer success people can also identify the most dangerous competitors as that is where your most of your churned customers will move to.
Indirect Competitors
These are competitors who are not direct threats but could potentially change tactics or target market to occupy your market.
- Who provide alternative ways to solve your customer problem. Eg. Netflix and Youtube. One relies on monthly subscription and consistent format and high quality content. Youtube relies on ad revenue and independent content creators with hit or miss quality.
- Who provide a similar product but targeted at a different audience e.g Netflix and Curiosity Stream. Both are monthly subscription and consistent format and high quality content but the former is geared towards entertainment, Curiosity Stream is focused on the edutainment focused market through streaming documentaries.
While you need not follow them obsessively, you need to be aware of any directional changes in strategy and positioning that might cause incursion into or overlap with your market.
Indirect competitors would be a higher number than direct competitors, at 10 or higher. This is the group you will monitor periodically, once a month or once a quarter.
Distant Competitors
These are competitors who have a long way to go before being able to position themselves as a viable alternative to you. They are usually months or years behind and do not pose an immediate threat, but someone to keep an eye on for the future. Sometimes, startups optimized for growth with huge investment backing can narrow the gap much faster and hence their financial details should be on your radar.
Their number will vary based on how you define distant competitors for your usecase. They will need to be assessed every 6 months or so and if necessary added to one of the above categories.
Segmenting your Competitors - A complete list
While in the above description, we have used the most important aspects of your competitors to classify, there are others ways to group your competitors
- Target Persona(s)
- Target Companies/Market Segment
- Messaging and Positioning
- Competitor Organization Size
- Geographic Coverage
- Distribution channels
- Pricing Policy
- Capacity & Utilization
- Integrations and Partnerships
Sources for Discovering Competitors
- Voice of customer and prospects. The best sources are your sales people and customer success team. If a prospect is evaluating your product versus another, the other product is definitely a direct competitor. Same goes for when an existing customer is considering renewal of your product or switching to another product.
The following lists of companies will be approximate estimations for competitors and you will need to use your judgement to decide if they truly are one.
- Alternatives to X - alternativeto.net is still the best source to get a less biased view of what is viewed as competitors in the market for X. The advantage of alternativeto is, it covers open source and free tools too. Other sources are review sites like G2 reviews, stackshare.io etc. https://alternativeto.net/software/airtable https://www.g2.com/products/airtable/competitors/alternatives
- Semrush.com - If you even get a trickle of prospects from your website, semrush.com is worth checking out. It shows the sites that are ranking for the same keyword as you are. It also shows the level of overlap between the two sites. It is often a good source for discovering indirect competitors.
- Similarweb.com - It shows sites that are similar to yours. The algorithm for calculating this is not very clear and it often is hit or miss, but a source for discovering tangential, distant competitors.
Choosing a competitive analysis Framework
The goal of any framework is to help you be more mindful about the decisions and actions that impact your business.
If you are an entrepreneur or a startup founder, then it will help you assess the value proposition of your product. If you are a product marketing professional then it will help you identify which market positioning will work best for your product. If you are a product marketer, then both of the above statements might be true for you.
There are multiple frameworks to give structure to your competitive analysis. You can choose the ones that fulfil your objective. In time, you will be able to adapt these frameworks to something unique and customized for you.
The process of competitive analysis can give you a wealth of data both quantitative (Numbers) as well qualitative(Data). Organized well, it will make things easier for future campaigns by giving clear direction(and a competitive edge) on which strategy works best based on this information gathered during each one!
Competitive Analysis Frameworks
1: Identify the variables that can influence the market
Porter’s five forces analysis: is a way to help you understand the competitive structure of your industry by looking at five factors:
- new entrants,
- buyers (or customers)
- suppliers
- Substitutes
- Rivalry amongst competitors
The first four forces will all affect each other as well as how much pressure there’s from rivalry among competitors in an area overall- this means that one factor can have many impacts on different parts within it depending what else happens with those aspects throughout time. For example, if a single supplier is the only source for a key part, the supplier can drive prices of raw material high.
For example, Intel was the dominant chip manufacturer for a long time. Hence all high end laptop manufacturers were dependent on Intel for pricing. The advent of highly improved and revamped AMD processors saw a decrease in prices and increase in processing power. On the other hand, shortage in electronics following Covid again resulted in high prices.
Thus, A Five Forces analysis may help businesses gauge the competitiveness of their industry, evaluate how trends will influence industry competition and how to position oneself for success.
2: Identify Direct Competitors with Strategic Group Analysis
You might have already gotten a list of competitors and grouped them into direct, indirect, distant or not-a-competitor already. So why should you do Strategic Group Analysis?
- The following exercise helps you verify your decisions and illustrate visually the competitor landscape that is understandable for everyone.
- It also helps identify shifts in the market
- It is easy to understand how the company can move into a more lucrative part of the market
Once you have a sizable list of competitors (at least 5), you need to identify the attribute(s) that meaningfully differentiates the competitors into groups. This can be something unique to your market (e.g Menu Spread, as shown in the example below) or a more standard attribute like
Product quality and features
- Extent of product/ service diversity
- Number of market segments served
- Distribution channels
- Brand image
- Degree of vertical integration
- Pricing policy
- Competitor Organization Size
- Cost position
- Geographic coverage
- Capacity & Utilization
- Target Persona(s)
- Target Companies/Market Segment
- Number of Integrations and Partnerships
Now one can sort the competitors based on the identified attributes into Strategic Groups.
refered from: https://open.lib.umn.edu/strategicmanagement/chapter/3-5-mapping-strategic-groups/)
3: Analyse your direct competitors
- SWOT analysis : A SWOT analysis is a powerful tool that businesses can use to gain a competitive advantage. The acronym stands for Strengths, Weaknesses, Opportunities, and Threats. By identifying these four key areas, businesses can develop strategies to improve their position in the marketplace.
- One of the main strengths of a SWOT analysis is that it forces businesses to take a close look at their competitor’s operations. By understanding their competitor’s strengths and weaknesses, businesses can develop strategies to either exploit their weaknesses or protect against their strengths. In addition, a SWOT analysis can help businesses to identify opportunities in the marketplace that they may not have otherwise noticed. Finally, by understanding the threats facing their business, companies can develop plans to mitigate these risks.
In short, a SWOT analysis is an essential tool for any business that wants to stay ahead of the competition. By taking the time to understand their own strengths and weaknesses, as well as those of their competitors, businesses can develop actionable plans to improve their position in the marketplace.
4: Analyzing your product’s position against Competitors
Perceptual Mapping
As marketing strategies continue to evolve, so too does the need for accurate and reliable consumer research. Perceptual mapping is a powerful tool that can help marketers to understand the perceptions of their customers or potential customers. By visually displaying the perceived positions of products, product lines, brands, or companies, perceptual maps provide valuable insights into consumer attitudes and preferences. In addition to helping marketers to understand where the consumer ranks their company in terms of characteristics and in comparison to competing companies, perceptual maps can also help to identify areas of opportunity. When creating a new product, for example, a company should look for a space that is currently unoccupied by competitors and that has a high concentration of consumer desire (ideal points). By using perceptual mapping to guide their decision-making, companies can ensure that they are making informed choices that are based on sound market research.
https://courses.lumenlearning.com/waymakerintromarketingxmasterfall2016/chapter/reading-the-positioning-process/
5: Analysing a Company with Multiple Products
The Growth-Share Matrix, also known as the Boston Consulting Group (BCG) Matrix, is a tool used by businesses to help them assess their different products and make informed decisions about investments. The matrix looks at two main variables - relative market share and market growth rate - in order to classify products into one of four categories: Stars, Question Marks, Cash Cows or Dogs.
Stars are products with high market share and high growth rate. They require significant investment in order to maintain their position but can generate a lot of cash flow. Question Marks are products with low market share but high growth rate. They require significant investment in order to grow their market share and become profitable. Cash Cows are products with high market share but low growth rate. They generate a lot of cash flow but don’t require much investment. Dogs are products with low market share and low growth rate. They have little potential for growth and generate very little cash flow.
By understanding where each of their products fall on the matrix, businesses can make strategic decisions about where to allocate their resources in order to maximize their return on investment. For example, a company might choose to invest more heavily in a ‘Star’ product which has high growth potential but low market share. This could involve increasing advertising or innovating the product. On the other hand, a ‘Cash Cow’ might be a product with high market share but low growth potential. In this case, a company might choose to milk the product for as long as possible before eventually phasing it out. The Growth-Share Matrix is therefore an essential tool for any business looking to make informed decisions about investments.
Gathering Data about your Competitors
1: Company
There are various metrics, both essential and secondary, that you can use to gauge your competitor’s business. You can break those down into sections like customer base, revenue, funding details, and other general information.
The former may be as simple as filling out data on your competitors’ number of employees, their C-suite executives’ names, etc. via sources such as LinkedIn or CrunchBase, while metrics like revenue are more difficult to discover.
To learn more about a company’s revenue and customers, begin by searching for their names alongside “revenue” or “customers.” If that doesn’t work, you might try a business directory like Dun & Bradstreet.
Sources
- About Us page on competitor’s website - Often you can the location, the key people in the company and funding information here.
- Crunchbase - You can find information about when a company was started, who are the key people, the number of funding rounds and fundng amount, what are the other companies in the space. While you can get a ballpark estimate of how big the company is, it is often inaccurate. The same goes for employee information
- LinkedIn - You can find all the locations the company exists in, the number of employees, recent hires, job postings etc. If you have the paid account, you can also find how many they have hired of late.
- Paid services like Dun & Bradstreet
- GlassDoor - Gives an idea of what the culture is at the competitor company and how aligned they are. When a company’s culture is in trouble, the agility of their progress is greatly hindered.
2: Products and services
Understanding the products or services that your competitors offer is the key to finding market differentiation for your brand. The first thing you’ll need to do is answer a few basic qualitative questions:
- What are your competitors selling?
- What is their USP?
- What key features are offered?
- What technology are they using?
- Most of this information can likely be found on their website, but you should also consult their LinkedIn posts, job ads, and tools like BuiltWith to fill in any gaps.
After that, you can move on to more quantitative details around price. Questions to answer here include:
- How much does their product cost?
- Is that more or less than your closest equivalent?
- Is it a subscription or a one-off fee?
- Do your competitors offer more packages than you?
Sources
Tech Used
- Builtwith.com - Builtwith is biased more towards the customer facing tech you find in frontend. This can still be very useful, depending on what you are looking for. This is a good source to know what webserver they are using, the analytics solution used, frontend tech, CDNs etc.
- Website Career page - To deep dive into tech that the competitors use in the backend, the jobs listed on their careeer page would be an ideal source. Even more importantly, new job postings will be leading indicators of new features that the competitor would be building. For example: An Job Advert for SAP developer could indicate SAP integration is in their future plans.
- Linkedin Job Posts - In addition to the same advantages confered by visitng the Website Career page indicated above, you can also see when the job was posted, giving a timeline information
- Patents filed - This is an important source of upcoming innovation for companies in hardcore tech, manufacturing tech, FMCG, oil and gas, and Energy companies.
Product features
- Website Product Page - For a B2B product targeted at small and medium businesses, The product pages usually have a complete list of features that a competitor team wants the customer to know. Sometimes, there will be multiple pages targeted at different user personas, which makes it much easier to know what personas are being targeted.
- Youtube Demo Videos - The name says it all. Often one can find demo of the products put up by the company themselves on their own site or on Youtube. It is also possible to find users/influencers posting their own videos and take on the product. This can be a treasure trove of information on what is truly possible with a product (as opposed to Website Product Page, where the narrative is strongly controlled), what innovative features are present and what is absent.
- Review sites like G2 - When all else fails, review sites like G2, Capterra and forums like Reddit are great sources of information on what features delight customers, what frustrates them and what is the role of the customer using the product.
Pricing Policy
- Pricing Page - Some product pages have transperant pricing policy. In such cases, you get all the information you need from the Pricing pages itself.
- Ex-Customers - When there is no clear pricing on the page, ex-customers who have chosen your product could be good source of information. Vice-versa, if one of your non-renewal customers is moving to the competitor, you could ask them for a favour and have a short exit interview covering their current frustrations and information about the product they are migrating to.
- Review sites like G2 - G2 sometimes has the information as provided by some of the reviewing customers.
- Googling “How much does x cost” - When all else fails, Google can deliver. It is possible to find some discussion on forums (usually reddit) by the competitors users and prospects about the pricing.
3: Target market and customer awareness
It’s only really by tracking a range of competitors that you can apply meaning and context to the results your brand sees. Social listening can also help you learn what customers are saying about your competitors and whether they’re listening. It’s also useful to see what kind of things your competitors are saying on their social channels – and on which ones. For instance, if your competitor is posting more on say, TikTok than LinkedIn, then you can make an educated assumption that they’re probably looking to attract a younger audience.
- Whom are your competitors trying to sell to?
- Is it the same kind of customer your own company wants to attract? And, importantly, is it working?
- You can get a decent handle on that last question by monitoring both share of customer voice and sentiment. Most social listening and competitor analysis tools will be able to track this for you.
- How does your competitor’s share of voice or sentiment rankings stack up to yours?
Sources
- Customer Interviews (Incoming and Churning)
- Prospect Interviews - Your prospects are probably speaking to multiple companies before fixing on one. They will have the most up to date information
- Sales People Intel - Your sales people are probably the first to hear of a new competitor. They are constantly interacting with prospects are often posed with questions about how your product stands against a competitor’s.
- Social Media Monitoring
- Discussions on forums like StackOverflow, Reddit, Quora - Ideally you should also have an account on these forums where your customers/prospects hang out to be able to participate in the conversation, and if possible steer it favourably.
- Customer Complaint Forums - If one exists for your category, it can be rich source of objections to your competitor products.
4: Marketing strategy
The meta-information around the above line of inquiry can help you fill in a few more blanks, too. For example, you’ll learn the geographical markets your competitor is focussed on alongside which ones they aren’t, and you’ll soon develop a full picture of their online presence as it relates to their target market.
But beyond that, a vital part of competitor analysis is in examining direct and indirect competitors’ marketing strategies as a whole. And there are many areas to dive into:
Advertising
Alongside TV and other traditional ATL advertising, it’s helpful to use competitor analysis tools to find out how (and how often) other brands are running ads online. You’ll want to see how your advertising output matches up against your rivals’ Google, YouTube, Display, Facebook, and Twitter ads.
Social media and influencer marketing
As mentioned in the section above, it’s important to know where your direct competitors are focussing their efforts when it comes to social posting. Moreover, if you monitor engagement levels per platform, you’ll learn which channels it’s best for you to prioritize.
Content marketing
Are your competitors blogging? Do they publish thought-leadership pieces on LinkedIn? Do they make regular videos on their YouTube channel? Do they own or sponsor a podcast? Do they have courses for their target marketing? And is any of it working? Learning what others are publishing and tracking engagement can be a useful benchmarking exercise, or – again – it can highlight potential gaps in the market.
SEO performance
Tracking content marketing will likely lead to monitoring the SEO performance of your direct competitors. There are several online tools (like PowerSuite, Ahrefs, Rank Tracker, and SimilarWeb) that can help you find out what keywords other brands are ranking for, and how you stack up in comparison.
Understanding this is crucial for adjusting your marketing strategy, to win a greater share of common search results in your industry.
Lead handling
- Familiarize yourself with your competitors’ lead and sales process by venturing down it yourself. Watch a tutorial, book a demo, or make contact with their sales teams to see how much of the process is gated, how seamless things are, and how long responses take.
- Sign up for their newsletter and see how they lead prospects to their funnel. What offers are given? How long is the nurture cycle?
Conclusion
The process of creating a marketing strategy is not an easy one. This process requires that you have a clear vision for why certain decisions were made. This will be a guiding light for making some tactical decisions during the course where and when you need to allocate resources to certain campaigns. So make absolutely sure it’s worth the commitment and worth all the time spent before moving forward with them!