Competition
We compete for our customer’s attention, and their budget. Anything that either distracts them from buying from us, or that causes them to buy somewhere else is competition. We distinguish two kinds of competition based on this perspective: we call them direct and indirect competition. The difference is important, because we address them in different ways. The two types are as follows:
- Direct competition refers to products that are in the same category as yours. If you are selling a car, other cars of similar size, price and format are direct competition.
- Indirect competition refers to other ways in which the customer’s need could be met. If you are selling a car, a bicycle, public transport, and a private jet might represent indirect competition.
Direct competition is the kind we are most used to, and it’s the kind of competition that often leads to product feature comparisons and benchmarks. All the personal computer magazines use this strategy to evaluate products. It’s often possible to do an “apples to apples” comparison with direct competition.
Indirect competition is more interesting. If your customer is considering a different kind of solution—for example a bicycle when you’re selling a car—it’s not enough to extol the virtues of your car. You must also persuade the customer that a car is a fundamentally better answer than a bicycle. The feature comparison makes no sense at all: comparing wheel sizes, brake types, number of seats and so on.
It’s a mistake to fixate on competition. Customers are much more interested in what you can do for them. The key to this aspect of our knowledge base is to build a good picture of our customers – the target market for our products and services.
On to customers:
