An area of sales and marketing that often gets overlooked and underserved is developing a comprehensive competitive analysis. Most times we know who we compete against on a regular basis, but it’s typically high level. The fact is that most companies don’t invest nearly enough time and energy understanding their competition deeply enough. They also neglect to create a process for feedback needed to keep the information current. In a study by the CMO Council, only 9% of companies surveyed had extensively analyzed their competitors. To make things worse, a surprising number of businesses don’t make it a priority to understand how they won or lost deals by doing formal reviews after the fact.
“Know your enemy and know yourself and you can fight a hundred battles without disaster.”
Sun Tzu, The Art of War
Knowing your competition inside and out will help you: learn what others in your industry are doing; what prospects want; and how to position and differentiate your company with more impact. All of which eventually leads to more sales! If this makes so much sense, why don’t companies do enough of it? Why can’t they sustain it once they have started? Great questions and a few simple answers come immediately to mind:
- They have glossed through the exercise 5 years ago and feel they still have it covered
- They don’t make it a priority and it sits on a long to-do list somewhere
- There is no ownership or process to keep the information current
- They don’t know how to do it well or lack a disciplined process to execute on it
Competitive Analysis Framework
A thorough Competitive Analysis consists of three essential building blocks: Competitive Profiles; Product Face-Offs, and Win-Loss Analysis. The ultimate goals of gathering this information are to help you win more often, using less effort and with better margins. As you would suspect, sales and marketing will leverage competitive analysis the most. However, the data can also be used as valuable inputs into key decisions that impact your product development roadmap, overall business strategy and potentially M&A considerations.
#1 Competitive Profiles
The starting point for doing a competitive analysis is something I call competitive profiling. This process is the research conducted to get a complete view of who your competitors are, what they do, and their strengths and weaknesses. Think of this as your “pre-game preparation.” The output of this effort is a “Competitive Profile” – which is a detailed summary of each key competitor you face on a regular basis (usually a 2-page document, or small slide deck).
#2 Product Face-Offs
These usually involve creating tools such as feature-benefit checklists or side-by-side comparisons. Be sure to think about them from the buyer’s point of view since having product attributes that are not relevant from their perspective is a waste of time. It’s a good practice to think about your product comparisons in terms of:
- Table-Stakes: The features that are minimum requirements. and
- Differentiators: The features that add more value than competitive offerings
Other critical aspects of Product Face-Offs are quality, pricing, packaging and service and support levels. Going through this exercise will help you understand two important things:
- The direction your product development needs to take, and
- How to position more successfully against others with what you have today
#3 Win-Loss Analysis
Thoughtful forensic work on past sales opportunities will help you understand the reasons a buyer selected you, or your competitor. It provides key insights into the perceptions buyers have about your products, pricing, and approach. Even though we call it Win-Loss Analysis, people tend to focus much more on lost opportunities and often ignore the “win side” of the equation. Although it may have been a well run sales campaign (at least in the salesperson’s mind), there is still a great deal that can be learned when you ask people why they bought from you. For more information about the power of analyzing your “wins”, see Win Analysis: A Neglected Hero of Analytics.
How Much Detail is Enough?
Competitive Analysis can be as deep and detailed as you want. There is, of course, a rational balance between what you need to know versus the merely interesting. The level of depth you need for a Competitive Analysis and the types of information you gather, will be determined in large part by your industry and offering. For example, if you sell high-ticket products or services in multi-year contracts, or your products require a high degree of aftermarket support – then prospects will have more interest in factors such as the vendor’s stability, reputation, and service structure. In this scenario, your Competitive Profile will focus more heavily on those things. If the product is a one-time purchase with little post-sale interaction – an increased focus may be placed on factors such as the product specifications, pricing, return policies, etc. Before building a Competitive Profile template, you must decide what things will be most significant in your market.
Who Owns the Competitive Analysis Process?
Competitive Analysis is always a team effort, but typically Marketing drives the process and creates the frameworks and artifacts needed. If your organization is large enough to have a dedicated Product Marketing function, that group would normally be responsible. Sales will play the strongest supporting role in gathering the intelligence. After all, they are in the trenches day in and day out. Also, executives, customer support, service staff and anyone else who interacts with clients and prospects on a regular basis will be good sources of feedback. It’s important to make the process clearly understood and as simple as possible for those who contribute. A good practice it to use standardized templates and forms and make sure they get stored in a place that is easy to access – a folder on your company Intranet, or CRM as examples.
Using Competitive Analysis
Now that you have all this great information, how can it will it be used to help close more business? Marketing will use it for market positioning, messaging, and targeted competitive campaigns. Salespeople will rely on it to help them “position” and focus the prospect on the right factors in competitive sales cycles. The knowledge will also help your salespeople build credibility by showing they know their industry. It’s best to share Competitive Analysis through formal training sessions as new profiles are created. It’s also a good idea to make sharing competitive strategy and best-practices a formal and ongoing part of your sales meetings. There is some subtlety in leveraging competitive information. Sales must always be honest and tactful when contrasting with competitors, and they should never put a company, it’s product or people down! Those who blatantly “slam” competitors will seldom leave a good impression and at times it’s disastrous. Instead, sales should focus more on what’s most important to the prospect, how you positively differ from others, and how your offering will best satisfy the need.
Leads and opportunities are not easy or inexpensive to develop. The vast majority of sales cycles are tough battles fought against one or more adversaries. Competitive analysis will help you win more business if you invest the right amount of time, thought and energy into it. If you don’t have the bandwidth, resources or know-how, you may want to consider outsourcing. For a higher level view of industry analysis and competition, you may be interested in this good overview of Porter’s Five Forces Analysis.
I hope you have enjoyed this article and would love to hear your thoughts about Competitive Anaysis or any experiences you can share. Please follow us on your favorite social feed and Contact us if we can help in any way.
Randy Fougere | Founder and President I have helped companies grow faster for more than 25 years. With deep expertise in marketing, sales and leadership, I started Think2Grow to help mid-sized B2B clients accelerate sales with thoughtful, results-driven marketing services.