Identifying competitors is not as simple as it seems.
As I introduced in last week’s post: there are many reasons why a prospect may choose not to buy, and each of these is a form of competition. Another product that does the exact same thing may seem to be the same as a replacement, but in fact there is a particular difference.
Understanding this difference is a key to understanding clients.
This is the most straightforward competitor category, and the one most people think about first (or at all) when considering competitors.
These are the other products or service providers who offer a like-for-like solution. Two estate planning attorneys, two mattress vendors, etc. A category that is straightforward for both the vendor and buyer.
Included in this category are products that have some differences but solve the same list of concerns or issues for the client. Think of a pear juice and an apricot juice, for example; though not equal, they are both addressing thirst, solved through a healthy fruit drink to avoid sodas, and with more flavor than water.
A strong value proposition and differentiating factors will help an offering stand up against Product Competitors.
A replacement is a complete substitution, rather than a choice between two similar alternatives.
A buyer has a life long before a purchase and long after a purchase. There are many parts to a buyer’s needs, and something may happen elsewhere in their lives which ends up eliminating the need for certain products or services.
Businesses must be aware of the options on the market that would remove a client’s pain point completely.
These are Replacement competitors. Identifying them requires broadening one’s understanding of client needs, pains, and options.
For example: Southwest Airlines decided from the outset that it wanted to attract clients who would normally not fly, providing an experience they could afford and enjoy. Southwest positioned itself as a competitor to cars, buses and trains, before other airlines.
Adaptability to new or surprise circumstances ensure a business can withstand a replacement competitor, allowing a quick and effective re-packaging to fit a changing need.
Are you struggling to identify different competition options your customers might be considering? Contact me to discuss how I can help build your Competitor Matrix.