When I first started out as a product marketer, I used to obsess over the competition a lot. After all, if we don’t know what our competitors are doing, how can we keep up?
But it’s often debated whether this is really the best way to go about marketing our products.
And then, Jeff Bezos enlightened me with his famous quote: "We’re not competitor obsessed, we’re customer obsessed!" - and it made all the difference.
At DoorDash, we embraced that mantra wholeheartedly by focusing on customers instead of competitors. After all, nothing beats being truly customer-obsessed in order to create better products and make customers' experiences magical.
But as a Product Marketer, I always got quizzed on competitor analysis and strategy - why bother when it's better to be customer focused? Maybe the competition is onto something… nah! Is it FOMO? Can neglecting your competitors be a huge mistake?
This a catch-22 situation that most of us must have experienced and wondered what’s the right way to go about it. Should we ignore the competition completely and work in a void or be aware and alert?
Many organizations have specialized teams for competitive intelligence. Their sole purpose is to deliver market and competitor insights to aid cross-functional teams and leadership. These insights help them stay informed about the latest developments and create a robust competitive strategy to win over customers or penetrate new markets.
The question remains, what is the ideal course of action? What should the focus be? How should we prioritize? Let’s figure out how to tackle this.
In this article, I’ll cover:
- Why customer obsession matters, but also,
- Why competitor analysis helps too. And,
- Doing competitor analysis the right way.
Customer obsession matters
We, as product marketers, are the “Voice of Customers” (VoC) and are focused on really understanding their needs, wants, desires, fears, frustrations, and what motivates them when making purchasing decisions.
This information can help us create products and services that meet their needs better and delight them. It also helps us develop marketing campaigns and messaging that resonates with our target market.
But competitor analysis helps, too
As a PMM I’ve done it many times; (ethically) stalking the competition. There’s no substitute for good old-fashioned detective work. You need to know what they’re up to and what they have planned in order to stay one step ahead of them.
This means taking the time to study their website, comparing their pricing and sales pitch, looking at their social media accounts, and attending their events. I’ve tried making extensive presentations to educate and inform my team. It has had mixed results.
I’ve realized the importance of finding the right balance and translating the information into actionable initiatives. To do it effectively, there are many tools for competitive intelligence, but it's crucial to know how to use them once you have understood the purpose.
Doing it the right way
The temptation to dive deep into studying rivals can be strong. Knowing the competition can give you a significant advantage if used properly. Here are some key principles that can help guide your analysis and secure meaningful wins!
Get inspired and discover the untapped potential
To succeed in a competitive environment, it's crucial to be ahead of the curve. Blindly mimicking what your competitors are doing won't get you far; instead, prioritize innovation that prioritizes customer needs and wants.
Your focus should be on satisfying their needs, not just exploiting or exposing your competitors' weaknesses. Identify untapped markets or unmet needs that your competition is neglecting and use this insight to develop products or messaging that resonates. Target markets or user segments that are currently underserved to gain a competitive advantage.
After watching the Netflix documentary about Spotify (called The Playlist), I strongly believe that had Pirate Bay not existed or caused disruption, it's possible that Spotify wouldn’t have seen the light of day.
Instead of being discouraged by Pirate Bay's struggles with privacy and the constant battle with the music labels, Spotify saw an opportunity and took inspiration from it.
The company honed in on the unfulfilled desires and wants of the market, and focused its efforts on meeting those needs in a unique and innovative way. This approach is what ultimately led to Spotify's success and established them as a leader in the music streaming industry.
Understand what sets you apart
Take stock of all the ways in which your product or service differs from those offered by competitors so you can use those aspects as a differentiator when marketing or selling it.
- What sets your product apart?
- Do you offer something special that no one else does?
- Are there certain features or benefits that make yours stand out from the rest?
Understanding these differences will help ensure that customers feel like they are making an informed decision when buying from you instead of simply choosing the same thing everyone else is offering. Once you identify the untapped opportunity, the next step is to find ways to provide exceptional value and exceed customer expectations.
For instance, Salesforce disrupted the traditional business software market by introducing cloud technology, which allowed users to access data and applications through a web browser. This was a stark contrast to their competitors who only offered access via physical servers. Salesforce's innovation provided customers with a more convenient and accessible solution, setting them apart from the competition.
The power of why
Instead of endlessly comparing your features to the competition’s, take a closer look at why they’re succeeding or struggling. Skip over reports and analysts that tell you what happened - go right to the source.
Collect first-hand accounts with win-loss analysis interviews from decision-makers; ask open-ended questions that probe deeper into their decision-making process; this’ll give you incredible insight if done correctly.
Netflix transformed the movie rental industry by recognizing how customers had grown frustrated with inflexible Blockbuster policies and punitive late return fees. Netflix tapped into this and created a simplified and better customer experience.
Make it actionable
Don’t just present the findings and make it a good-to-know presentation but aim higher. Dissect your competitor's strategy and out-think them by brainstorming ideas with your cross-functional partners and getting their buy-in on actionable next steps. This exercise is not only fun but can also provide invaluable insights on risk management - allowing you to make well-informed decisions that lead towards success.
At DoorDash, when my team and I worked on competitive analysis, we started by determining the purpose (why), audience (who), approach (how), and next steps (what) for the project. The goal was to inspire stakeholders and guide them in creating solid plans using the information to revamp our positioning, website, and product roadmap.
We expanded the audience to cover sales, strategy ops, product, growth, consumer insights, PR, and the rest of the marketing team. We presented the information with recommendations and followed it up with focused brainstorming sessions on how we can leverage what we know and got buy-in and commitments from them on the next steps.
This included the Product Marketing team as well. How can we innovate our messaging and content to differentiate? We conducted brown bag sessions to align the team and followed up on project commitments and timelines. This helped in not only providing the team with the information but converting this information into actionable initiatives that drove impact.
To sum up…
As product marketers, we often have to walk a tightrope between being customer-obsessed and competitor-focused. We all know what happened to Kodak, MySpace, Blackberry, Blockbuster, and many others.
Blockbuster had a golden opportunity to remain competitive and be the market leader, but their misguided belief in customers' loyalty prevented them from seizing it. Unlike Blockbuster, most businesses can't afford to make such costly mistakes; they must stay ahead of disruption or risk becoming irrelevant altogether.
Don't get swallowed up by analysis paralysis - it's crucial to draw inspiration from competitors while being laser-focused on solving your customers' most pressing issues. It’s advantageous to keep track of competitors, but it’s equally important not allowing them to dictate your decisions and actions.
So, go ahead - strike a balance between these two perspectives and get started!
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