Competitive research can be a huge time-saver — especially when new products are being launched.
The time and effort spent spend building and marketing a product could take months or even years. That is why investing in a few hours of competitive research could yield huge long-term rewards for product managers and their organizations — if they can confirm early on how their product adds value. After all, they need to know what makes their product stand out in market. The best way to do that is to research and assess everyone else in the market with them.
Competitive research involves capturing information on competitors' metrics that matter most to your own business. Product managers should begin by identifying who and what the product is up against in market. This gives them a strong understanding of how unique their idea truly is. This is also an important first step towards understanding whether their idea warrants more of their valuable time and effort.
Competitive research can help answer these core questions:
To answer these questions, product managers must differentiate between direct and indirect competitors:
A direct competitor is a company that offers (more or less) the same good or service within the same market. For example, Coke and Pepsi are direct competitors with each other.
An indirect competitor is a company that offers a different type of product to serve the same need. For example, Sprite and Pepsi are indirect competitors with each other. And water is an indirect competitor to both Sprite and Pepsi.
Product managers should be sure to research both direct and indirect competitors, since both types of analysis are immensely valuable. Understanding the pain points of their competitors' customers can help product leaders discover problems that are theirs to solve. This can offer them a huge market advantage to use in their pitch.
Product managers must prove they are building critical components that matter to their business and potential customers. After all, products should never be built in a vacuum — they should solve specific needs for the business and customer. As the product's CEO, they must define these two things before motivating the product team to build, market, sell, and support the solution.
Product managers need quantifiable metrics to:
Product managers may understand why competitive research matters, but not know what to look for during their research. They should look for certain core information to start making a meaningful competitive research plan. An example from Aha! is included below. PowerPoint and Excel are also popular ways to capture this information.
Product managers should determine their competitors' end goals for their products — their visions for where these products are headed and what they aim to achieve in market. To achieve this, they should spend time on competitors' websites to assess how they present themselves to customers and prospects. They should ask: "Why do these products exist?" "Which problems do they purport to solve?" Most importantly, they should ask if there are any problems that these products do not seem to solve. Those are potential market gaps to fill.
Product managers should try to understand what drives their competitors to do what they do. Many products are built out of deep, personal passion and necessity. It is smart for product managers to spend time researching the founders' backgrounds on LinkedIn, company websites, and other online profiles. Then, they should ask: "What does the competition excel at? What insight and experience do the founders bring to the table?"
What do competitors' users struggle with? Which aspects of these products are lacking? To answer these questions, product managers should invest time in taking competitors' product tours to understand all aspects of their offerings. Then, they can search for relevant online forums to read reviews and insights on these products. Quora, Product Hunt, and LinkedIn are three potential platforms that offer unbiased opinions on what customers and prospects think.
All great products have relevant personas — profiles of that product's ideal customer demographics. These personas are fictional, but should reflect real customer groups. While researching competitors, product managers should ask who these products are intended for, and revisit customer reviews to look for patterns. They can infer which personas competitors are targeting by noticing similarities between titles, industries, year of experience, etc.
How do competitors market their products? What language do they use to describe what they offer in market? Which core problems do these products solve? Product managers should review their competitors' marketing messages — on their company websites as well as external websites. This helps them assess where they see their own role within this shared market.
It is essential to define the market landscape when conducting competitive research. A thorough market analysis confirms customer needs, industry changes, and fiscal opportunity. To understand competitors, product managers must also know where they fit within the broader market they share.
Product managers should collect this information for each direct and indirect competitor, and then store it in a central place accessible to their team. This helps them analyze all competitors at a high level. Once they see where their competitors excel and fall short, they can find ways for their product to stand out.
Throughout each stage of the competitive analysis, product managers should check in with themselves to benchmark their progress. They should ask if this process is helping them understand their core market — and how their product or feature will solve a specific problem. Ultimately, they want to answer this question:
"What's your single biggest advantage that you can offer customers in your target market?"
The first step towards finding out this answer is conducting competitive research.