Does competitive analysis matter?
One of the questions I get most often is how a company is doing versus its competitors. People want every manner of competitive analysis, from social media to SEO to insider business information. The question I have in return is, does any of that actually matter?
The short answer is yes, competitive analysis does matter, but only secondarily. It’s not the most important thing you should be focusing on as a marketer or a business.
Our first priority is, and always should be, making sure that we are improving ourselves to the greatest extent practical. If you have an extra dollar to spend, 95 cents of it should be on R&D, staff, or service, and maybe 5 cents on competitor watching. In the long run, making yourself better always delivers more value.
It does not matter what our competitors are doing if our product is terrible or service is an unpleasant experience.
It does not matter what our competitors are doing if our employees hate working for us.
It does not matter what our competitors are doing if we are unprofitable.
For almost every business there is, the most broken thing is not a competitor’s focus. The most broken thing is something internal, and that deserves our focus.
So what good is competitive analysis?
Ultimately, competitive analysis is good for helping you find easy wins. For example, if you know the audience that your competitor has acquired, going after the audience may be an easy marketing win because you don’t have to convince anybody of the value of your industry or niche, just your company. Your competitor has done the hard work of convincing them that they need what you have to sell.
A very simple example of this is for you to follow all the people that follow your competitors’ Twitter accounts. You know they’re at least marginally interested in the space if they’re following more than one other competitor.
(For the record, I don’t consider CC or Chris competitors in any sense, I just needed an example not under NDA!)
Competitive analysis is also good for helping you understand what product features or service features you should have in your product that your competitors have. Be very careful with this, as it can be an incredibly dangerous trap! Your customers may loudly demand a feature, but then never use it, not derive any value from it, and cost you a lot of R&D money for no return.
For example, at one company I worked at in the past, customers demanded that the product have an A/B testing feature. I heard that feature request on every channel imaginable. Prospects said it in sales meetings. Sales opportunities were lost because decision makers said all of the competitors had it. Customers said it through their reps. People shouted, we want A/B testing!
When the product finally got A/B testing, and a very good, very robust solution at that, guess what percentage of the customer base used it? That’s right, about 1%.
This is the danger of competitive analysis for product and service features. You can end up chasing things that don’t matter. If you’re just getting started with competitive analysis, go after audience acquisition first.
Remember this above all else: competitive analysis is good and important but is always secondary to improving yourself. Make that your primary focus, invest the most time and resources into fixing what is most broken with you, and competitors will largely take care of themselves.
You might also enjoy:
- Best Practices for Public Speaking Pages
- How to Set Your Public Speaking Fee
- How To Set Your Consulting Billing Rates and Fees
Want to read more like this from Christopher Penn? Get updates here:
Get your copy of AI For Marketers