In our last post we started looking at your competitors’ pricing structure in the context of creating and testing your initial pricing hypothesis. In this post we’re going to dig deep into your competition to see how you can effectively differentiate yourself.
We perform a competitive landscape analysis to accelerate you time-to-market while improving your chance of success once you get to market. By performing a competitive analysis, you are able to skip several long and costly phases of market development by standing on the shoulders of your competitors.
Even if you are the first to market, in most cases there is no need to reinvent how to interact with your customers. Remember, you must sell things the way people are used to buying them.
Performing a competitive analysis is a well known component of going to market. But few sources are available to help you identify, specifically, what you should be looking for and learning from it. That’s where we focus.
In this post, we’re going to share the specific items that you need to be looking for, how to look for them, why they are important and how to leverage the information and insights to get to market faster.
We need to stress again that you’ll want to have identified you ICP before moving forward with this exercise. If you haven’t, go back to our ICP posts and complete that exercise first.
If you’ve got your ICP, scroll over now to our Resources/Downloads area and grab the Competitive Landscape Analysis spreadsheet. Follow along and fill it out as you read this post.
The goal of a competitive analysis is to educate yourself about your competitors’ products, pricing and customer journey. Your customers have been learning about and buying similar products for years. In order for you to explain how you are different and potentially better, you first need to know what you’re up against.
You want to be special and unique, but you can only do that if you know what everyone else is doing.
We’ve previously talked about how going to market is like building a skyscraper. We started with your foundation and by taking a look at your competition we’re now starting to frame out the structure.
Competitive analysis is all about understanding how your current market views, understands and talks today about the problem that you are solving.
In bringing your product to market you need to speak their language and frame your value in a way that is tangible to your audience, not yourself.
It’s also important that you use this exercise to strike a balance between mimicking an approach that people are already comfortable with while knowing exactly where and how to get them to think outside the box.
The Competitive Landscape Analysis exercise enables you to create a comprehensive narrative not only about your competitors approach, but also their business. As you gather information about your competitors, go beyond looking at what they are doing and try to ask why:
- What’s their tone?
- How do they set up the problem?
- Who’s the audience and why?
The answer to these questions will likely point you towards places that your competitors have already found to be unprofitable or, better yet, markets that are not a focus area for them.
Likewise, don’t focus solely on what they are doing, keep your eye out for the empty spaces:
- Where are your competitors not marketing?
- What product features or specializations are they lacking?
Asking “why” your competitors position themselves in the way that they do is the closest thing you have to a crystal ball. It will better help you understand ways you will be both constrained and successful in the future.
The first step is to fill in the top of the Competitive Landscape Analysis worksheet with your competitors’ names. Here’s what to fill out for each competitor in the rest of the document:
- Pricing Structure – If they have a pricing page, share the link. If you can’t find pricing, research it on industry forums. Still stuck? Enlist the help of a friend or use an old email address to get a quote. Fill in as many details here as possible.
- Standard or Custom Quote –If they have standard pricing with a rate card, examine those rates. What are the features at each price point? What features are behind a paywall? This tells you what customers are latching onto. For a custom quote, detail what information they request in order to create a quote. This will provide you insights on how you can and should do the same.
- Tiered Pricing – If the company has tiered pricing, how do they tier it? What can you learn about their business and customers from these tiers? What do you think were the stressors or accelerants that made those tiers?
- Contract Commitment – Do customers have to opt-in for a certain amount of time? Are they locked in? Is it annual or monthly? This will enable you to understand what level of commitment your ICP is already comfortable to opting into.
- Visible On-site – Can you see pricing on their site? If nobody has their pricing online, this might tell you that the rules of pricing are still being written for this space. Are customers used to seeing pricing for similar products? If so, you don’t want to be the one company creating friction by not showing your price.
- Direct or Indirect Competitor – If they’re a direct competitor, that means they have very similar features and are going after the same ICP. You’ll be able to tell if they have a similar ICP by the existing customer logos or quotes on their website. If that’s not the case, then they’re an indirect competitor.
- ICP Focus – Who’s their ICP? This will be very obvious as you’re browsing their site. Are they going after banks, health care providers or consumer facing companies? Are they marketing to everybody in the industry? What are their strengths and weaknesses? Now think about where you can specialize to cut through the noise and stand out.
- Company Size – Search for this information on LinkedIn or the About Us section of their website.
- Company Maturity – Are they a legacy company that’s been around forever? Is this a startup? This helps you understand where they are from a resource standpoint.
- Location – Where are they and how does their location relate to your customers and theirs? Are you going after the same geographic territory and will they have better access to these customers?
- Overall Comparison – This is your overall impression of their product. Think about it from your customers’ perspective. How does the product look, feel, and function? Try to use their product. How is it different from your product today? This will help you figure out how to communicate these differences to customers.
- Product Maturity – Is this a newer piece of technology? This indicates that they’re going to be able to move fast. You’re trying to figure out what you’re going up against. If it’s a technology that’s been around a while, it’s going to take them a while to pivot. You might have some advantages over mature products because you can move faster.
- Product Features 1-5 – This is more of a comparison chart. Think about your own features here and compare them for each competitor. If you have the same feature, what’s the difference? Where can your product team find space to either differentiate or improve your product? You should start to see a pattern of features emerge that you want to incorporate. This is also a great starting place for a piece of collateral and prep sheet for how to answer questions about how you are different in live conversations.
Sales and Marketing
- Key Value Proposition – You can find this by reading the main headline on their website. They think that this value proposition is their big differentiator. You’ll see how all your competitors have differentiated themselves and then be able to identify the gap you can fill.
- Description of Sales Process – What does the customer journey look like for each competitor? You need to learn that journey in order to understand what your customers are already used to and how you can be better and or different.
- Schedule Demo – If you’re scheduling demos with your competitors, this is a good place to keep track of the demo schedule and detail resulting feedback and learnings.
- Website – Just link to their site here for your own (and your team’s) future reference.
- Blog/Content – Link to their blog if they have one. What can you learn from your competitors’ blog content? How are they approaching the market and what problems are they addressing? You shouldn’t immediately jump to the conclusion that you need a blog. Instead, you should examine the blog content to identify what they already know about your target market and the kinds of questions and topics your customers are thinking about.
- Video – Link to any videos on their site or to the company Youtube channel.
- Online Product Demo – If they have an online demo, include a link to it here so you can refer to it later if you need to.
- Online Support – You’re looking for how their customers get support. Is it easy to get support? What channels do they offer it from? What kinds of support issues do they make answers readily available?
- Website Chat – Do they have a chat feature on their site and what is the experience like? Is the chat for lead generation or for customer support?
- Downloadable Content – What kind of downloadable content do they have available to customers and how easy is it to get?
- Conference – Identify the conferences they attend and start identifying if they make sense for you to also attend. If the company puts on their own conference, that will tell you how much thought leadership they’re already demonstrating in the space.
One of the main purposes of having a comprehensive competitive landscape is to help you know where you stand in the market so that you can speak effectively to customers and remove friction. Likewise, the Competitive Landscape Analysis worksheet is a great resource to quickly get any new team members up to speed!
Your competitors might have a big client list, be in multiple markets, and have set messaging. You don’t. This means you have a fresh start to do everything better. You can fix what’s broken. But you can’t do that until you’ve actually scoped out the competition.
If you’re done with this analysis and you’ve found that you’re in a packed space, that’s a good moment to pause. Identify if this is the right path. You need to ask yourself if you’re doing something so different from everyone else
Do you have a strategic advantage or a new type of customer acquisition strategy? Or should you back out and find a tighter sub-segment where you can own the market?
This exercise should further validate whether or not you selected Mr./Ms. Right Now (that is, the right ICP).
A Final Thought: Your Biggest Competitor
While it’s good to research the competition in order to understand how to approach the market, you should keep in mind that the biggest and most common competitor is the status quo.
The majority of technology products out there today automate some kind of manual process, they don’t replace an existing technology. Your competitive analysis is here to help you get ahead faster and avoid unnecessarily learning things your competition has already spent money learning.
That is not to say that you should focus your world view or strategy on actually competing with them. That day will come when you begin to hear consistent feedback from your market that you are being compared with a specific company.
Preparing for competition with everyone is effectively fighting blind.
Validating your ICP and gaining more and better knowledge of your competitors will help immensely when developing your customer acquisition strategy.
And that’s what we’ll walk through next week in our ongoing #gmxp Series!