Imagine you're running a race. There's all the fancy stuff: the starter pistol, the ribbon at the end, a cheering audience.
It's exciting. The rewards to winning are fabulous. (A long weekend with ex-WWE superstar The Undertaker, where he shares insider secrets—you know you want to know if John Cena is nice for-real).
You're ready.
You start running. Fast.
But the track is a bit worn out. You're moving forward, you can still see the ribbon in the distance—but is this the shortest path to your goal? Are energy drinks being handed out? Is there a wagon you can jump on for a boost?
One way to find out: see what the other racers are doing.
Only, you can't see your competitors.
You know they're there. But you see nothing. You don't know what they're doing, you don't know if they're ahead of you or behind—if they're strategizing, collaborating, taking a shortcut—nothing.
This is your SaaS business without competitor research.
Information on other racers will not make your legs run faster. It won't change anything inside you—it won't change your supporters and what they feel about you.
But it will tell you where you stand.
It will tell you about your position—and what you need to do to get ahead.
Competitor research can't, and shouldn't, be the reason you add new features or change your product.
Your product should be the outcome of thorough market research, customer feedback and prospect interviews. It should be based on what your ideal customers need, not what your competitors are building.
For all you know, their ideas could be tanking.
Where competitor research can really help you is with understanding your positioning.
It can make you stand out as the best solution available, and help you understand what you have that others don't. It can show you why your audience is frustrated with other solutions, so you know which features to boast about the most.
So how do we improve our positioning with competitor research? How do we emerge as a market leader and crush the competition? What do I need to know about them, and how will it help me?
Here's what you need to dig up:
Who are your competitors REALLY?
We're talking honest competitors. We're talking unlikely villains. We're talking wolves in sheep's clothing.
We're talking about all solutions that come to mind when you ask yourself: What would people use if my product didn't exist?
If you want to show your customers the true advantage of your product over alternatives, then your messaging needs to be strong and robust enough to combat all three types of competitors. Let's check out how we can do that.
⚔️ Type 1: The competitors solving the same problem for the same customers but in a different way
Let's take the example of workplace communication. The problem is lack of transparency, gaps in communication, complicated never-ending messages, lost information: basically, a crowded inbox.
Slack solves this problem by using chat to organize messages into different channels with different team members.
Gmelius solves it by organizing emails into shared labels and channels, with assigned team members.
The outcomes of both these tools are better communication across teams and organized messages. They have a common enemy: Gmail.
But the technology they use to solve the problem is very different. They might not be clubbed into the same category, but they have the same customer pool.
You have competitors who don't do exactly what you do, but give your customers the same outcomes. Often, your competitors might not even be specific tools—they could just be Excel or Google Docs.
With the website copy, you need to show your audience why all the OTHER tools and technologies suck—and then, show why you're better.
This especially works if the products your customers have been using are older, with outdated features and less-than-modern technology.
Then you can just go:
How to position against type 1 competitors:
- Talk about why the other ways don't solve the problem as well as your product does.
Eg. Show why email organization is just not as efficient as a separate chat tool like Slack. How people are still going through folders of endless email threads.
Something like this video from Slack:
- Attack the other ways of solving the problem.
Show all the baggage that other methods come with, for example: privacy concerns, wastage of time, added expenses, etc.
- Show why your way of solving is better.
Talk about why your tool gets to the outcomes faster, with lesser effort. This is your time to brag—lord all the benefits of your method over other methods.
⚔️ Type 2: The competitors solving the same problem in the same way but for different customers
The game changes here—you make a deliberate choice to differentiate yourself from your competitors by choosing a segment of customers that's radically different.
The classic example for this is Drift and Intercom.
Intercom was an all-encompassing application for conversations with customers, helping support teams, sales teams, product teams: anyone and everyone on the team who needed to speak with customers.
It marketed to everyone.
When Drift came in, they knew they had to specialize.
Drift was directed to marketing and sales teams: it did one job, and it did it well. Their messaging was focused on their advantage over other apps for just one type of customer.
Once they had established their brand, they started expanding to other personas and use-cases.
Drift, then vs now.
Every time you niche down and target a specific audience, that audience listens in rapt attention. You automatically qualify yourself as the best solution for that audience because now, you're the expert.
Pay attention to the audience segment your competitors are targeting: the size, the region, the industry, the position they hold in companies, their needs. Choose a segment that your product can serve best, based on these criteria, and position yourself to fit their needs.
How to differentiate yourself from type 2 competitors:
- Talk about how other solutions won't meet their specific needs.
Generic competitors who are building for wider audiences or tools that don't exclusively cater to your audience have an inbuilt fatal flaw: they don’t address specific needs.
Show people all the things they're 'settling for' with tools that aren't specifically built for them.
Drift talks about integrations which are crucial to sales and marketing teams, that Intercom doesn't allow. They talk about how support chat is focused on minimizing conversations. They talk about strategic reports on conversion funnels that Intercom lacks.
All because Intercom is not built for sales and marketing teams.
Pointing out all the gaps in your competitor's features because they don't cater to your audience: a badass move that'll get you straight to the top.
Heck, build a whole page around it:
- Talk about how your product is customized to the needs of that specific audience.
Now that you've trash-talked your competitor, it's time to show your customers HOW you SPECIALIZE for them.
What feature have you added that supports their particular needs? How have to modified your product for this specific audience?
For example: Software businesses, e-commerce merchants, service providers—all are potential markets for chatbots. But all of these audiences have different needs and requirements.
Chatfuel chooses to cater primarily to e-commerce businesses, so their messaging talks about specific benefits that a generic chat-bot would not be able to address:
It talks about the challenges that are particular to e-commerce such as recovering abandoned carts or selling products through WhatsApp, and shows visuals relevant only to the e-commerce industry. It assures merchants that Chatfuel is Meta-approved, so they don’t have to worry about reliability.
Just answer the question: Why is your product best suited to the specific audience you're selling to?
⚔️ Type 3: The direct competitors solving the same problem for the same customers in the same way
These are competitors that can almost completely replace you and the only difference it'll make to your customers are the brand colors.
Here's the Jimmy Kimmel to replace your Jimmy Fallon. Here's the sexy lamp to replace Daisy in The Great Gatsby.
Take Mailchimp and Brevo (formerly Sendinblue) for example: both marketing tools using automation to help businesses run campaigns and send marketing communication.
At this point, there might be a few features here and there, but you know they're hitting close to home.
How to beat type 3 competitors
Prove that you understand your audience best.
The one sure-shot way to beat type 3 competition is to take it on headfirst.
Your audience will probably poke around before paying up: this is your chance to make a lasting impression on them.
Understand your audience—the problems they are facing, the reason they cannot solve the problem themselves, the cost of the problem to their business, the solution they are looking for and the outcomes they want to achieve.
And then, pour it all of it into your website and marketing.
Position yourself to fit their needs, dreams and desires perfectly.
When they see your ads or go through your website, they have to be thinking 'This is exactly what I need. These are my pains and this is precisely the solution I need!'
Other solutions will automatically be sidelined.
A small feature more or less won't make as much difference as truly speaking to your prospects, in the language they understand.
Positioning in an unsaturated market
If you're creating an AI that can read symptoms with a face scan, you won't be selling it the same way as an email marketing tool.
When you're selling in an unsaturated market:
- You can be aggressive and straightforward in your marketing. You can pitch your quality, announcing yourself as the leader of the market.
- The tricky bit in an unsaturated market is sparking demand. If the market is new, it means you have a lot of educating to do.
- You have to convince people your product is a game-changer and worth their time.
- You have to give people the resources to see the value in your product and in the solution you provide.
- You also have to educate people on HOW your product works and how they can incorporate it into their business.
- If the market is unsaturated and old, you might want to think about why there's not enough competition—who your audience is, and if the size is large enough to substantiate a product. You might want to think about the pain points and draw attention to the costs of not solving the problem.
- Differentiating yourself in an unsaturated market is easier because you're the 'only right fit' for the unique features you provide.
But let’s be real. A lot of us are steeped in saturated markets. We have at least one Intercom-sized meteor hurtling into our paths. We all have a gig at the bar right next to where Beyoncé is performing.
So how do we make our gig sound enticing? How do we compete in saturated markets?
There's generally two types of saturated markets.
Positioning in a saturated market #1: Going up against an old established competitor
Going against the top dog?
Find the gaps and needs in the market that established competitors don't see and fulfill.
No matter how wide the net, there's always holes: there's always needs of the audience that aren't being met by the big companies.
They might have a thousand features, but miss out on the one thing that realllly matters to (a section) of their audience.
And this one thing is all you need.
Let's take the example of SquareSpace.
When SquareSpace entered the market, WordPress was already reigning supreme. To give you context about how big WordPress is, here's a stat: It powers 35% of all the websites on the Internet.
And WordPress wasn't the only existing solution: there were Blogger and GeoCities too.
But these big solutions were missing something: beautiful design. In the words of SquareSpace founder Anthony Casalena:
All there was out there were these geeky, bargain-bin sort of services charging $2.99 a month for clunky experiences.
Now that's a burn if there was one.
SquareSpace found a problem with the way this industry giant was solving a problem, and they made it a selling-point for their software.
How the website looked was important for the customers—the design was part of their personal identity online, it was a reflection of their brand.
And this was the need WordPress or Blogger had not addressed sufficiently.
SquareSpace stood for beautiful websites. It was different because this value was embedded in their positioning and messaging from the get-go.
As a relatively newer business, you have the potential to capture customers that are dissatisfied with the established competitor because it doesn't cater to their specific needs.
Find the problem people find with the big product, and sell the solution on your website!
Positioning in a saturated market #2: Many head-on competitors
The second kind of saturated market is one that has way too many solutions, all of them sort of profitable.
You don't want to get down to a price-battle.
So highlight the teeny tiny things that make your product better.
Tackle the peskiest problems with competitors upfront.
Think of Postmark:
Their positioning uses their benefits over competitors to stand out.
Since this is a saturated space, users already know what bugs them about products. For emails, it is deliverability. So Postmark makes it a core element of the site:
Be bold with your copy, instead of sticking to safe! Use the high awareness of the audience to your advantage.
Take those things that you internally know make your product a superior—and put them on your site.
SavvyCal represents their way of doing calendars against the competitors visually:
They start with a broad comparison, and then zoom into feature-level benefits of their product:
In a market like this, me-too messaging that looks exactly like every other competitor will not cut it. You need unique sections that take risks, talk about problems, and take up space.
Don’t be afraid to talk to your visitors one-on-one. Add new layouts, address the elephant(s) in the room and get real with your audience.
The alternate way is to niche down. To find a different section of the audience or a different take on the problem.
Find your value proposition, make sure it connects with your audience and come out as a leader!
Researching your competitor’s customers
Let me explain this bit with an example.
Say you're making a movie. And it's releasing at the same time as... the OG Lion King.
Your best strategy against Lion King is to cater to a different section of the audience: like a drama for people who aren't looking for animated movies. Or if you're hellbent on creating an animated movie, perhaps something more Rick and Morty-esque than a Madagascar.
💡 When there's a well-loved, pre-existing competitor in the market, your value proposition has to be radically different from them. Your positioning has to show people what you have to offer is not a lower-grade version of Lion King, but is its own thing.
But think of your strategy when you're up against Morbius.
When you're up against Morbius, all you need to do is echo what the market feels about it, right from the trailer.
Simply point out the failings of the existing product and show how yours can help customers better!
Your competitor's reviews can show you exactly what you're up against, and which route you need to take to succeed in the market.
Here are some questions you need to keep in mind when researching your competitor's customers:
- Who are the customers? That is, what role do they hold in a company, what industry do they work in, and so on.
Knowing your competitors' audience will help you decide which audience you're going to target, and how to speak to them.
- What is the big problem the customers are looking to solve when purchasing the product? What are the outcomes they want to achieve?
Reviews will generally include what customers liked and did not like about your competitor. This will help you create your own messaging, based on what people need to hear to adopt your product.
- Who is typically happy with the product? Who is unhappy?
Is there a particular type of customer whose needs aren't being met? Is your competitor's product better suited for a certain section of the audience?
Scoping out your competitor’s positioning
How are they positioning themselves and how well does their positioning match their product?
Is your competitor proclaiming themselves as the 'cost-effective version of bookkeeping firms' or are they advertising themselves as 'accounting for entrepreneurs'?
What's their message to the audience? What do they stand for?
And how well does it resonate with the audience? Is the audience looking for a cost-effective way to do bookkeeping?
- Dig into the messaging that your competitors use on their website and in their marketing. Join Facebook groups run by your competitors. Read their articles.
- See how the audience responds to their positioning.
- Does your competitor have a product-market fit? Or is their messaging at odds with what the market values most?
Perhaps the audience isn't looking for a cheaper solution—in fact, they might be ready to pay more for accuracy, automation and speed.
The point is: you never know until you assess their positioning.
- Scan their reviews, case studies and content to understand their messaging and weigh it against what their customers say.
- Which features are your competitors talking about most? Are those features top priority based on your other research?
Use the competitor's product and check for yourself which features are a pleasant surprise, which areas need improvement and if the product does what the company says it does.
If your competitor's messaging is filled with 'automate your routine tasks', check if it does indeed automate routine tasks.
But remember: you're not here to destroy your competition. Did Scar destroy Mufasa?
Okay, bad example.
Use your competitor research to craft a rock-solid messaging for yourself—one that's built on your strengths and the values you stand for. Not on the holes in your competitor's story.
Competitor research helps you differentiate from other products in the market, but it is not a substitute for customer research.
Let your customer research have the final say.
In the end: don't get too caught up in competitor research. There's space enough in this world for two, heck, 20 email marketing tools. There's space enough for your security tool and all the others. You don't have to fight everything and everyone.
Your goal is to be a steady, successful company that doesn't run out of money and is loved by its customers.
And for that—start learning about your own customers first.
Key Takeaways:
- Identify the types of competitors you have to fight and use strategic messaging to take them down.
- For the competitors solving the same problem for the same customers but in a different way, eg. using automation software vs. hiring an intern for routine tasks, do this:
- Show why the other way of solving the problem is NOT as good
- Show the additional problems (like extra costs or middle-men) that come with the other solution
- Show how your way is better
- For the competitors solving the same problem in the same way but for different customers, eg. finance software for everyone vs. finance software for hospitals, do this:
- Show that the other solutions won’t be a perfect fit for your specific audience
- Show how you have purpose-built features for your audience
- For the competitors solving the same problem in the same way for the same customers, do this: Prove that you understand your audience’s problems, desires and needs the best
- To position in an unsaturated market, educate your audience on the problems, the value in your product and the impact it can have on their business.
- To fight an established leader in a saturated market, find the gaps and needs in the market that they don't see and fulfill.
- To tackle a saturated market with many similar solutions as yours, niche down, or show that you get your customers best.
- Research your competitors’ customers and use their reviews to understand who is happy and who can benefit from a switch.
- Understand your competitors’ positioning and how their audience responds to it. Find what resonates, how their messaging matches up with their reviews.
