The time and effort spent building and marketing a product could take months or even years. That is why investing in a few hours of competitor research could yield huge long-term rewards for product managers and their organizations.
The goal of competitor research is for product managers to confirm early on how their products add value.
After all, product managers need to know what makes their product stand out in market. And the best way to do that is to research and assess everyone else who is in the market with them.
Here are the two best questions to ask before you begin your own competitor research:
What is competitor research?
Competitor research involves capturing information on competitors' metrics that matters most to your own business. Product managers should begin by identifying who and what their products are up against in market.
This process gives them a strong understanding of how unique their ideas truly are. It is also an important first step towards understanding whether their ideas warrant more of their valuable time and effort.
Competitor research can help answer these core questions:
- "Are there other companies doing exactly what I (want to) do?"
- "Are my potential customers getting a product or service at the level that they want or need?"
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 pitches.
Why does it matter?
Product managers must prove they are building critical components that matter to their businesses and potential customers. After all, products should never be built in a vacuum -- they should solve specific needs.
As the product's CEO, a product manager must define these two things before motivating the product team to build, market, sell, and support the solution. They need quantifiable metrics to:
- Compare their work to the competition
- See where they can fill gaps in customer competition
Competitor research can be a huge time-saver -- especially when new products are being launched. But it can be daunting to review what your competitors are doing. What if your brilliant idea is already in market?
Even if that is the case, there is no need to panic. Your product does not have to be first to market in order to win -- it has to be the most lovable. And making a product that customers love starts with assessing a holistic view of your product's market.