Know thy neighbour: A primer on competitor analysis
In this post, we dive deep into something that all Enterprise PMs spend inordinate amounts of time on. As always, we write articles that we think would have helped us when we were beginning our PM careers. We hope that this short article helps you understand enough about competitor analysis to get started!
Do not fret if you cannot read the whole article though; the image below should give you a quick summary!
What is competitor analysis?
TL;DR: Understanding what your competitors are doing and the motivation behind them.
Fundamentally, competitor analysis involves getting a better understanding of who your competitors sell to, and what they offer. As a product manager, understanding the business landscape and knowing your product’s shortcomings and strengths in the landscape are crucial to introduce features and better position your product.
Why should I do it?
TL;DR: You need to know how you stack up against your competition. Do not do this to mimic a competitor.
Understand where your product stands in the industry, which will in turn inform your strategy. For example, if you are up against large incumbents with mature products, competing on the sheer breadth of features you offer will not make sense. Here, you may want to focus on solving a smaller set of problems well. If you figure out that you are competing in a smaller niche, moving to adjacent niches that your competitors are not already in is a great way to grow. Either way, you will need to know who your competitors are and what they are offering in order to take these decisions.
In Enterprise companies, your customers are likely to ask, “How are you different from X?”. You must arm your sales team with enough ammo to answer this question. Knowing about your competitors also helps you to clearly articulate key differentiators of your product.
Knowing who your competitors’ customers are, helps you make a better decision on how to position your product and also the customer segment that you should target. For example, if you find out that a large competitor is aggressively pushing to expand to the financial services market, you can consider focusing on a different sector instead. If your competitor is positioning themselves as a product for large enterprises, you can explore tapping the small and medium businesses. As a PM, this exercise also allows you to spot trends and latest shifts in the market.
What do I need to know?
TL;DR: You must know about your competitors’ customers, features and pricing.
How is your competitor adding value to the customer and which features are enabling them?
Who does your competitor primarily target? Do they focus on large enterprises, or do they go after smaller businesses? Do they focus on certain verticals (e.g. financial services, eCommerce)?
How do they position their product? The Mattermost v/s Slack page is a great example of positioning. Although both of them offer similar products, Mattermost has positioned themselves to be focused on providing customers full control over their data because it is self-hosted. This definitely required an acute level of understanding of their competitors before they could bet the farm on this.
In what areas are they better than you? And why? Do they have deep industry expertise in this area? Are their products more user friendly than yours?
In what areas are you better than them? And why?
Is the price right? PMs are typically not directly involved in pricing a product. However, the features that they prioritise influence the value delivered to customers. And the value informs the price. Pricing and positioning of similar features by competitors help in this decision making.
Why is this hard for Enterprise products?
TL;DR: It is harder to get access to Enterprise products, and you will have to talk to salespeople to get more information.
You need to talk to a salesperson before getting to a demo for most Enterprise products. They are not likely to allow access to competitors.
Quick trials are not possible with a large portion of Enterprise products. They may need a lot of configuration effort and will only be relevant for larger deployments.
Only a few key features are advertised prominently by Enterprise companies. This is especially frustrating when you are trying to build a detailed feature comparison list.
There are fewer people analysing and writing about Enterprise companies’ strategy and customer base, publicly. There is great information asymmetry when it comes to understanding what your competitors are doing, for Enterprise products.
How do I do it?
TL;DR: YouTube videos, competitor websites and data sheets, tech blogs, webinars and analyst reports, mostly.
YouTube is a GREAT source to not only understand more about their product, but to also visually see how the product works. Companies upload their product demo videos on their official channels (e.g. an Automation Anywhere showcase). People also upload tutorials on using the product effectively (e.g. a UIPath tutorial series).
Companies regularly organise webinars where they not only show their latest features, but also help give you insights into how they position and market their products. Sometimes, they even talk about how they think they stack up against their competitors (which may include you), which is great information to have. But your ride may not be smooth here always. @jenniferpinto92 recounted an incident when she was repeatedly kicked out of a competitor’s webinar. She then realised that she was signed in from her work ID and they were booting competitor IDs from their webinar! Pro tip: Use a temporary ID (like Temp Mail) to sign up for webinars.
If your company has access to analyst reports (like Gartner, Forrester or Everest), that should give you a quick overview of your competitor. Most of these reports have brief descriptions of prominent players in a space, their strengths, weaknesses. We have found that some reports (specifically Gartner), also talk about major use cases that they support as well as their target customers.
Product data sheets provide brief information of features and the different license editions that they are offered in. This is particularly useful during the pricing and license exercise to market and position the product better.
Competitor websites and tech blogs are a rich source of information. Ultimately, competitors are also trying to market their product and put out content to educate and inform users about new releases and product updates.
Finally, go ahead and get in touch with their salespeople. If you handle the conversation well, you can get them to help you understand their product better! It will also give you an insight into how they position their product before customers.
PS: Following a standard framework to categorize your competitors’ Strengths, Weakness, Opportunities, Threats (SWOT) (Yes, it is a 2 x 2 matrix), or Gartner’s Magic Quadrant will help bring structure to your analysis. Do not reinvent the wheel here!
When do I do this?
TL;DR: Once a quarter. You do not need to do this too often.
We have found that doing this once every quarter is a good frequency. A higher frequency means that you are focusing way too much on competitors. A lower frequency will mean that you have outdated information about your competitors.
What do I do with this info?
TL;DR: Externally, use it to tell your customers how you are different. Internally, use it to refine positioning and strategy.
The sales teams can be armed with comparative analyses of your product against that of competitors’. This comparison can be published publicly too, for potential customers: https://docs.yugabyte.com/latest/comparisons/.
You can understand if you need to position your product better or differently.
You can also use this information to revise the customer segments that you are targeting.
Competitor analysis can also serve as an input into your roadmap, but must not be its main driver.
We hope that this helps new or would-be B2B/Enterprise product managers understand how to go about doing a competitor analysis. We have a lot more topics that we will dive deeper into, so stay tuned!
PS: If you have any suggestions on the format or topics to cover tweet to us at @pallavi_sreeram and @shreyas94!
PPS: Connect with us on LinkedIn at Pallavi Sreerama and Shreyas Karanth
Icons in the summary were made by Flat Icons and Freepik from www.flaticon.com.
