In today's overly crowded marketplace, differentiation has never been so important yet so overlooked. Understanding your customer profiles and how to position your product in the broader market is crucial.
By conducting a competitive landscape analysis, you'll be able to identify the ones who will benefit the most from your solution. It is one of the reasons why you should take the time to perform such an analysis.
You might feel that you know why you're different, why your solution is fantastic and why everybody will essentially pay for it. And that's all we wish you. Unfortunately, suppose you don't take the time to understand how to position your product within your market. You'll either miss out on opportunities to generate revenue or might be entirely wrong on who will pay for your product.
So by conducting this analysis, you'll be able to understand who your direct competitors are and identify which features of your solution you should highlight the most to stand out.
We've compiled our methodology of creating a competitive landscape analysis which we use in our Launch Sprint, the start of any collaboration with our clients. You can download our complete template for free if you're ready to start your own positioning. You’ll find a copy of our spreadsheet or PDF version to execute the steps mentioned below.
So follow along!
Step 1: Identifying direct competitors only
The first step in positioning your product is identifying where it needs to be situated. At this stage, we're only interested in both your direct and indirect competitors. We need to understand who they are and what they are offering today that makes them so attractive, and that would be a challenge for you.
Identify at least 4 direct and indirect competitors to make the analysis relevant. There are three approaches for you to choose from to complete step 1:
- The personal one: Which companies do you compare yourself to the most?
- The data-focused one: Which companies are people looking for the most in search engine results (SERPs.)?
- The customer one: Which brands were mentioned during your customer research?
Step 2: Analysing your own solution & your competitors (as objectively as possible)
Have you got your list of the most relevant competitors? Perfect!
It's time to determine which key features you'll be comparing between your solution and theirs. It is important to remain as objective as possible in this comparison step.
We also recommend following a scoring system, from 0 to 10, 0 being the worst possible score and 10 being the best.
Finally, please don't go through this step alone. Take some time with a few team members to discuss and debate. There's no point in conducting this analysis if the only input available is yours, the creator of the solution. The more diverse the opinions are, the better questions will be raised throughout this conversation. Be prepared to be challenged.
Step 3: Pinpoint market specificities
Don't just stop at the scoring system. This is especially worth it if you did manage to bring together some people from your team so you can understand everyone's point of view.
Why did you all decide on these specific numbers?
Make notes along with them. This analysis will enable you to do a lot more than just compare product features. You'll be able to understand who your ideal customer profiles are and craft the most effective messaging according to these descriptions.
You'll refer back to this document again and again. In 6 months, you won't remember what anyone said.
Summary on competitive landscape analysis:
At the end of this analysis, what you should be left with is the understanding of:
- Current market gaps
- Your product's niche features
As we've previously mentioned, this analysis will be the basis for your following strategy projects, such as identifying your ideal customer profiles and the distribution of your growth strategy. If you're ready to move on to the next steps, we've created a free template.
We cannot emphasise enough the importance of taking the time to execute such projects before launching anything. Even though going to market calls for some experimentation and optimisations as you go, you still need a map to support you through this journey.
And voilà, here it is, the first part to build this map.