Competitor Research

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What is competitive analysis?

As with a lot of terminology and practices discussed in the product manager/owner arena the practice of performing a competitor analysis has it’s grounding largely in the world of marketing and strategic planning, two important considerations of the product manager.

A competitor analysis is essentially a means of identifying where your organization and product(s) fit in the market relative to those of your competitors and their products. It’s a way to benchmark your product against competitive offerings in order to identify the strength’s and weaknesses of both yours and your competitor’s products, recognize gaps in your own product, assess the value their products provide and understand how your product stacks up against this. It’s fundamentally a means of identifying opportunities for improvement.

As you will have realized by now, I have a penchant for not trying to classify and define these practices in a categorical way – the term competitive analysis is broad and will mean different things to different product managers that have inherited different products and at different times in their maturity, in different industries etc. A product manager with no product yet but an idea to capitalize on a un-served/undefined market may use a competitive analysis to vet if the market is truly untapped. Whereas a product manager with an established product in a highly competed market may use a competitive analysis to identify areas for strengthening his product by analyzing how competitors approach similar challenges.

As Michael Knowles quite nicely puts it:

A good competitive analysis is a scouting report of the actual market that your company must navigate in order to be successful.

Why is competitive analysis important?

There’s different reasons why we may want to analyze our competitor products – learn how they solve for similar problem we’ve encountered, keep tabs on features they offer that we don’t or simply tracking potential competitors i.e. those that don’t currently compete with us now but may do some time in the near future.

In John Peltier’s very insightful blog he points out quite rightly that if you’re creating your own market it’s likely that you may not have to pay as much attention to your competitors as those operating in a high competition established market, but at some point competition will arrive – it’s not a matter of if, but when.

The competitor analysis is another data source from which to derive critical insights about how we can satisfy our end users and create best in class products. The same way we use web analytics, customer feedback is the same way we can use information to from our competitors to shape and inform our product offering. There’s an interesting quote that reads:

If you’re doing your product right you won’t need to worry about what your competitors are doing.

It’s a quote which I disagree with to some extent. Granted, the motivation should be to create an exceptional best in class product such that your product offering and the experience you present your end users are the envy of your competitors, however in order to get their you need to take inspiration from others too. If you don’t keep tabs on your competition and use them as an opportunity to learn you will eventually fall behind – ignorance isn’t bliss when it comes to competitor products.

How do I carry out a competitor analysis?

There’s a ton of systematic approaches to carrying out effective competitor analysis but all of these evaluations tend to follow the same approach:

–       Determine your competition.

–       Determine the success metrics against which to compare.

–       Ranking and rating.

An example of this is a competitor array:

I also use a similar approach when working with my UX team, however the ‘success metrics’ against which we make our assessment are replaced with general user experience heuristics i.e. ease of use, innovativeness etc the below is an example of the matrix we would create from our exercise. As you can see, it’s visual and easy to read and the heuristics we pick as those that we determine are perhaps the most important for the product with which we’re working.

The metrics against which you perform your rating is perhaps the most important part of the exercise. However, it’s not just about comparing features and functionality as Roger Cauvin points out:

Competitive analysis should primarily be about analysis of customer psychography and perceptions. Don’t just compare your product to other products, determine what differs between your customers and those of competing products….This sort of competitive analysis is what should drive the positioning of your product, which largely determines the relative priority of product requirements and the strategies for marketing and selling your product.

Another practice that I’m partial to when developing a new and involved feature or functionality is to commission an audit of my competitors by leveraging relationships with partners and researcher with which I have a working relationship. There’s a wealth of companies out there that are more than happy to perform a full audit of competitor products i.e. capturing screenshots, mapping together journeys and flows and performing expert reviews of the user experience. Oftentimes research companies are more than willing to perform this service free of charge as a way to prove the value they can add to your organisation and it’s not an opportunity you should pass up. This is especially helpful when the products you work on require access to authenticated experiences or subscribing to paid for services.

Alternative Methods & Tools

As a product owner whose product is established but constantly evolving and growing often times it’s more fruitful for me to simply keep current about my competitors on an on going basis – my primary goal is to create a best in class product that is the benchmark for other. However, there are always times when I need to be reactionary to improvements in my competitor products and up to speed on new offerings in the market place that threaten my own offering.

–       Follow your competitors.

–       Use their products.

–       Speak to your users – what do you like about X, Y Z competitor.

–       Sign up to an alert engine.

–       Read auditors reports (magic quadrant).

 

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About Author

A product manager with extensive experience in the Fin Tech industry and co-founder of www.productmanagerclub.com. Startup hustler, tech junkie, user experience obsessed with a love for bulldogs!

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