3 tips to doing a competitor analysis as a Product Manager
July 19, 2018
July 19, 2018
In today’s age, the reality is most ideas have been done before and product managers are challenged with finding a new way efficiency, cost savings or automation around an existing tool to create a new business. In order to be effective, product managers need to complete very detailed competitor analysis so they can understand the existing world that they will be competing in and ensure that what they end up creating as a product adds value to an end user more than the existing options that are out there in some way creates a differentiator for end users to select your product over the existing options.
When working on competitor analysis there are a number of takeaways that a product manager needs to ensure they fully grasp to be effective. Here are three tips on doing competitor analysis in order to be an effective product manager:
1. You are not alone: As much as every tech founder or product manager wants to think that they have come up with a completely new idea that no one has ever thought of before, the reality is that there is already competitors doing what you do. You may have added efficiencies, enhanced the interface, added integrations, and other cool ways to make your product more useful but if your potential end user segment is already able to complete their tasks today, then that is your competition. Take Social Media products. Before social media products were launched, how did end users communicate with friends and family? Did they email more often? Call and Text each other more? Were they using different sites to share photos and make comments? You may not have a direct competitor in the way you are thinking about competition but again if your end user segment is doing the work or process today, however they are doing it, then that is your competition and you need to ensure your product makes it easier to do the task within your product more than the way they are doing it today. The hardest part is loosing the ego and realizing, you are not alone and that competitors already exist. You need to become an expert in your competition.
2. Focus on Strengths and Weaknesses: For every competitor you identify, create a competitor analysis document and track who the competitor is, what is it that they do best and promote within their marketing as their main value added to end users and then look for what they are not marketing on their marketing that you plan to add to your product. What are they not marketing that they can do as a feature? For the strengths and the features they promote the hardest, lay out all of the specifics they offer. Take a look at your product, what is it they do that you can not? This is an opportunity to create new ideas for your product. Again, you are not an island and chances are what you are building is already done but just done differently. Do not be shy about looking at competitors and taking ideas from what they are doing and making it yours within your product. Do not try to reinvent the wheel if a competitor nailed a feature try to recreate the same within your product as much as possible. Create a feature list needed to complete in order to at least offer the same amount of features as each competitor and identify which features you already offer that they do not. Always be able to offer potential users a competitor comparison between your product and competitors to highlight what you are doing better and that you offer the same critical features as they do.
3. Monitor Competitor Analysis: Just as you are doing competitor analysis, so are they. As soon as you release a feature, they may choose to add your feature to their product so competitor analysis should be completed once a month or on a normal basis to ensure you still have a differentiator. Product managers may get too focused on their product roadmap to stop and ensure they are building the key features the industry is offering. You need to ensure your product roadmap consists of what your end users need to be successful, what your product strategy is dictating and the features needed to remain competitive with key features offered up in the space you serve. Competitor analysis is often done at the on start of a business but then not maintained. This is a gap as a product manager you can get some great ideas for features by becoming an expert on what other products are offering and mirror the same. Think about your own weakness as a product and look at how that is being solved elsewhere. Do you struggle with on boarding users to your product? Go into trial with 10 competitors and experience setup wizard. Take away ideas and features for your product.
Competitor Analysis and understanding your competition is critical to a product manager so they can understand the general direction of the space they serve and ensure the product roadmap they are building keeps them at the same pace and beyond that of the competitors to keep building the business with additional users. At the end of the day, if competitors offer your features and more, and worse at a lower price, why would anyone use your product? Always keep an eye on competition and ensure your product stays above the best.