Product managers want their products to be successful. One big challenge that we all face is that the world is filled with competitors – companies that offer a product that solves the same customer problem that our product development definition solves. In order for our product to be successful, we’re going to have to find a way to deal with all of this competition.
Step #1: Analyze Your Competition
Before a product manager is ready to deal with the competitive threat to his or her product, you must first take the time to analyze your competition. This is a critical step that should be on everyone’s product manager resume because it is what will allow you to create an effective strategy for dealing with them.
There are three different aspects of each of your competitors that you are going to want to look into:
- Objectives: The company that you find yourself competing against is there for a reason. You need to take the time to uncover why. Have they created this product in order to boost their bottom line, capture a larger market share, or introduce customers to their company so that they will buy other products?
- Strengths: : Every company is good at doing something. You need to measure your competition against both your company and the other competitors out there. What do they do better than anyone else? For that matter, what don’t they do better than anyone else? How much of the market do they own right now?
- Reactions: : When you start to react to your competition, how are they going to respond? Their choices range from doing nothing at all, only responding to certain competitors, or coming after you with both guns blazing. Make sure that you know the answer to this question before you take any actions.
Step #2: Collect Information On Your Competition
Getting information on your competition is a tricky thing to do. You can cross a legal or ethical boundary if you are not careful here. Make sure that you use only publically available sources and stay away from the shady ones.
Your competition’s web site is a great place to start. Talk with your sales teams to learn what they know. Trade associations and common suppliers can also have a great deal of useful information. Your firm may have former employees working for you and as long as you keep it legal, they can provide you with some great insights.
Step #3: Attack!
Once you’ve done your homework, it’s time to put on your product manager battle gear and go into battle. You can’t just let a competitor show up and take market share away from you. You’re going to have to meet them head on and let them know that you’ll both defend the customers that you already have and that you are willing to fight them for new customers. Here are 9 attack strategies that you can use:
- Boost Ads and Promotions: : when a new competitor shows up it’s time to remind your customer base that you still exist and why your product is the best product in town. Just make sure that your product really is better!
- Cut Your Price: I’m a little hesitant on this one, but in certain circumstances it may make sense. If your competition’s main feature is their low price, then by lowering your price you can reduce the attractiveness of their product. Just make sure that this is really going to influence customer buying behavior before you do it.
- Create Cheaper Products: : If your flagship product can’t have its price discounted to compete with the new competitor, then you may have to create a new product that has been built specifically to be offered at a lower price in order to compete with the competition.
- Create More Expensive Products: : Depending on your customers and your market, creating a high end product that is clearly better than your competition is one way to draw attention away from them and highlight the shortcomings of their product.
- Increase Product Variety: : If your competition is only offering a few types of products, look into creating many more types or configurations of the product that allow the customer to get exactly what they need. If possible, you can always take this one step further and allow customers to customize the product to meet their specific needs.
- Innovate: : Add features or functionality to your product that your competition does not have in order to set your product apart from them. The best things to add are things that you know that your completion will have difficulty adding to their product.
- Reduce Your Costs: : Look for ways to reduce the cost of creating, marketing, shipping, and supporting your product. Any funding that you can free up here can be used in other ways to make your product even more successful.
- Boost Customer Service: : Customers will only buy your product once, but they may interact with your customer service team multiple times. Taking the time to invest in a well-trained and efficient customer service operation can make your product stand out from the competition.
- Change Distribution: : After the customer has decided to purchase your product, you need to get it into their hands. Look at how you do this and determine if you can do it faster, cheaper, or improve it some other way that your competition can’t match.
What All Of This Means For You
Competition is a fact of life for product managers. How to deal with it should be a part of every product manager job description. This means that we need to understand how to deal with competition when it shows up. Most importantly we need to know how to strike back in order to defend both our market share and our existing and future customers.
The first thing that a product manager needs to do when a new competitor shows up is to analyze them. You need to determine what their objectives, strengths, and reactions are going to be. Next you need to collect information on them. Make sure that you do this in an ethical fashion. Finally you need to strike back. There are many different ways to do this and you’ll have to pick the right way for your market and your product.
Dealing with competition is a fact of life for product managers. The good news is that we don’t have to stand passively by while a competitor takes our market share and our customers. Instead, we can intelligently evaluate the situation and then we can strike back. Good luck defeating your product’s competition!
Question For You: If a competitor is much bigger than you are, what should your competitive strategy be?
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What We’ll Be Talking About Next Time
By now, everyone should know what Twitter is: the very popular Internet service that allows users to send messages that can be up 140 characters in length. Combine this with the ability to follow interesting people, resend what has been sent, and use #hashtags to identify interesting content and all of a sudden you have another one of those wildly successful Internet businesses. However, take a closer look at how Twitter operates and there just might be some lessons in all of this for product managers to learn from…