Competitive Analysis
Knowing your competition is a crucial factor in making a winning pitch for a customer's business. Unless the cost of what you sell is trivial you can be sure that many of the people you try to sell to will have looked at the alternatives so you need to be as well or better informed than they are about your competitors.
Direct and indirect competition
Direct competition is products that are the same as your offering, one washing machine instead of another. Indirect is more difficult to quantify; if you sell to consumers then you have to figure out what else they might choose to spend the money on that they would otherwise buy your product with. Someone fancying a packet of crisps might be tempted by a chocolate bar instead or they might go for a healthier option if they see it advertised in the right way.
Only you can figure out the indirect competitors for the budget you want people to spend with you and you need to do it so that you can tailor your own advertising to convince them that yours is the best use of their funds.
Analysis
The first thing you need to do is step away from your product or service and figure out what it is the customer is looking for. The customer will have a range of needs that can be met by your product or a competitors you mission is to define that list of needs. If you have existing customers then go and ask them, it will not be quite that easy but work at it and you will come away with a useful list of needs.
These customer needs are the basis of your competitive analysis because you will use them in preference to any list of features you may have worked on.
For each need you now:
- Rank it against the other need so you have them in order of importance
- Write about how your product will meet that need
- Write about how your competitor will meet that need
- Highlight the ways in which you have a better solution than your competitor
- Highlight the areas where you are weaker than your competitor - add these to your product plan to make them go away!
- Pick out you unique selling propositions, those that are going to make you stand out against the competition
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