“Can’t we just do what [competitor] is doing?"
It’s a question that strikes fear in the heart of many strategists and designers. It often comes from stakeholders or other well-meaning folks. They see something they like and naturally want it for themselves. It feels like a shortcut: borrow what the other team’s doing, make some tweaks, and voila! Instant strategy. Unfortunately, it’s not quite that simple.
There are a number of good reasons for performing a competitive analysis. When developing a strategy, it’s important to know what your rivals are up to. But it’s not so you can match them feature for feature. In fact, this is one of the worst things you can do. Instead, by making your competitive scan focus on customers and their needs, you can use it to uncover new opportunities for your product or solution.
Resist the lure of the same old same old
Remember: the essence of strategy is differentiation. I can’t put it any better than Michael Porter. Strategy, he tells us, creates competitive advantage by “deliberately choosing a different set of activities to deliver unique value” to customers (emphasis mine).
Performing a competitive analysis to try to match features is a losing game. As C. Todd Lombardo, Bruce McCarthy, Evan Ryan, and Michael Connors say in Product Roadmaps Relaunched, “the quickest way to reduce the value of your product is to get into a tit-for-tat feature war with your competition.” You’re doing nothing more than contributing to a commodity market for your solution. You might be able to compensate by delivering it at a lower cost (in dollar and cents, but also user friction). But even then, your position is tenuous. You’re not creating a compelling case for customers to switch or stay with your product instead of similar options.
What’s the backstory?
What’s more, if you base your assessment just on what you can see—like the the feature in the app—you’re missing a big part of the story. We rarely, if ever, get a glimpse into the context of how a competitor’s feature got built.
For instance, you might not understand your competitor’s big picture strategy. The might be pursuing a completely different goal than yours. That goal might actually run counter to your own. In that case, pursuing a similar feature could actually do harm. In the very least, you may be diverting resources away from your own strategic aims, slowing your progress toward what really counts for your organization.
What’s more, the tactic they’ve implemented may not even be particularly effective. It could be a spectacular failure, or a casebook example of the sunk cost fallacy. You also probably won’t have the full story behind where the feature came from. It could be the pet of a particularly vocal customer—the only one who will ever use it. Or, a noisy (but ill-informed) senior stakeholder. The feature could be the result of a design-by-committee process that left nobody satisfied. Or, it might have been a rush job that was thrown together hastily to meet some arbitrary deadline. You never know for sure.
A misapplied competitive scan comes with other risks, as well. A competitive scan will sometimes be used in the solution space. When a feature request or other problem comes through, the team will start their design work by looking at how others have handled it, looking for inspiration.
This is not inherently a bad thing. In fact, it’s a good practice to build your own library of snippets and modules of work—your own and others— that you can draw form to fuel your own creativity.
Just be mindful of the risks. For one thing, you may be unconsciously biasing yourself toward something that hews closely with your competitors’ solution. We’re all subject to a cognitive bias called the “anchoring effect.” When making a decision, we put more emphasis on information that was first presented to us. If you start your solution design with a competitive scan, you might tie yourself down to the existing known solutions instead of coming up with a more creative—and perhaps more effective—solution of your own.
This is made all the more troublesome by our human tendency to prefer more concrete solutions to abstract ones, as described by Stanford professor Justin M. Berg. If our own ideas are not yet fully formed, we (or our stakeholders) may dismiss some of the best ones simply because they’re not as tangible just yet. The competitive scan sets expectations for yourself and your team as to what the solution could and should look like, limiting your capacity for divergent thinking.
Start with the customer
Instead of trying to keep up with your competitors, use the competitive scan to find gaps in the market that you can fill.
To do this, you need to begin with your customers. Grow your understanding of the customer’s needs. Keep in mind that what the customer doesn’t need is your product, or even your company. They have some goal or task in mind. They want a way to solve a problem, or solve their problem more efficiently. As Jim Kalbach says, “Companies do not compete against other companies and their products. They are competing for the customers, and their one goal is to create value for them. And there is only one way to do that: by offering a product or service that is better than any other at helping them get their job done.”
When developing your of comparators, cast a broad net. Don’t just line up the usual suspects—that is, your direct competitors. Customers may employ creative solutions to their problems. You need to go and talk to them about it, and understand how your solution will stack up. What will compel a customer to choose you over something else—something they might already be comfortable with? What differentiating strengths could you offer?
Focus on filling the gaps
The real value of a competitive scan is to help understand how your customers are meeting their need without you. From there, you can review the available solutions and evaluate their relative strengths and weaknesses. That’s where a competitive scan is most valuable. Your opportunity lies in the white space that isn’t yet being filled by an alternative solution. It shouldn’t be about trying to achieve feature parity.
That’s where your strategy starts to develop. “When we pay more attention to our customer than our competition,” Jay Acunzo writes, “the customer pays more attention to us.”