It’s an interesting question. After all, our customers see us both and make their decisions accordingly. But where do you stop? How much information is enough, and how much is too much? It’s quite easy to get a bit obsessive about competitors. If a competitor has a feature, you need it too. If the competitor enters a new market, you need to be there too. If they re-brand, we need to re-brand. If they drop their price, so should we.
Of course it is important to understand your competitors. After all, customers see you in this context and make their choices accordingly. You can’t position your brand or solution in a vacuum; you position your brand in relative terms to others.
On the other hand, there are some real risks in putting too much focus on it.
Time – you have only a limited amount of time which needs to be divvied up between a broad range of marketing/business activity. If you spend most of it analysing others, you won’t get much done.
Focus – you could end up following your competitors instead of leading the market, becoming a me-too provider and loosing the reason why people chose you in the first place.
Confidence – your customers don’t just buy features, facts and figures. They buy on trust and you are an advisor to them. If your head is full of reasons why your competitors could be better, you’ll lack conviction and confidence and people will pick up on that.
So what’s the right balance?
That depends on how competitive your market is, but the first rule is to track and review with a purpose. If your purpose is to ensure your product/service development is in tune with market developments, do a quarterly review of your competitors offering and vital business stats.
If your purpose is to sell more effectively, focus on the information that is most important to your customers. Stuff that is either important to position your brand, or make to the sale. For your main competitors, write down the key reasons why your customers choose you over them, so you have a clear picture how you are positioned against each one. Equally, write down three arguments they use against you, and have a solid response. Not having to think about it when a customer asks you is in itself a pretty powerful statement.
In the end, competitors will always have features you don’t have, but how often is that feature making or breaking the sale?
And how many brands do you know (and use) with products and services that may not be the best or the most complete, but you choose them anyway?