Every tech provider (despite the protests I hear regularly from clients that “we don’t have any competitors”), competes with somebody or some thing. If you have no competition, then you likely have no real market. The most basic form of competition is status quo–the way people do things without your product.
While you can’t choose who customers actually compare you to (that is their choice, not yours), you can identify what you want people to think of as the alternatives to your product or service. This decision is one of the most important ones you can make in positioing your product or company (and talked about in my Research Note Positioning Revisited–subscription required).
When defining your competition, be sure that you do so with an eye towards a three things:
- Recognition – A competitor, or approach, that is well known helps your prospects get an immediate frame of reference to start evaluating you
- Differentiation – From that frame of reference, you want a competitor that is not strong in your key areas of differentiation, allowing you to establish a clear separation for your company and the value you can deliver.
- Value/Impact – Choose a competitor that has an impact/value footprint that is as large as yours, or larger. This will help you reinforce your price/value and reduce the number of dicussions you have to have about price concessions because “your competitors are cheaper”
When I was at Adobe, working on the enterprise team to build our presence in the Customer Experience Management marketplace, we explicitly decided to frame our competition as IBM and Oracle. We wanted to go after large enterprise deals that would produce multi-million dollars revenue streams in product and services. We weren’t always going to be able to drive that level of revenue, but our competitive framing put us in a better position to do so. If we had framed our competition as Web Content Management vendors or other smaller companies, we would have been more challenged on the big deals. The choice also gave us competitors that were widely recognized and where we could amplify the impact of our differentiation.
For emerging vendors, the choice of competitors is amplified in importance. Without much brand awareness, choosing the right competitor to attack, probably indirectly, will help you gain traction as you establish your presence in the market.
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