“Competition makes you better, always makes you better, even if the competitor wins.” – Carlos Slim

Not every business sets out to dominate. Maybe being consistently busy and profitable is enough.

But every business will still need to compete. And to realistically contend in your market, understanding competitors is fundamental for whatever level of success you set to achieve.

There are two main categories of competitor to consider: direct and secondary. We’ll address a third later.

In dissecting those categories, you’ll develop an inclusive picture of the competitive landscape and thus, create more effective business and marketing strategies.

Head-to-Head

Establishing direct competitors is easy. These are companies that offer very similar products or services. Generally, they’ll target the same customer base in the same market.

Think of any number of business-to-business professional service categories, for example, such as general accountancies, project management, IT services, and general legal counsel. Within their areas, they directly compete for a slice of the same client pie.

Begin by analyzing their strengths and weaknesses, including products/services, marketing campaigns, brand image, and customer service.

By examining web sites, digital advertising, and social media presence for announcements, product launches, and marketing efforts, you’ll quickly generate insights into how and to whom they market. Those assets will help you understand their size, market share, and potential – and appetite – for growth.

Secondary

Secondary competitors might seem less obvious, but they can still significantly impact your business. These companies cater to the same needs or goals of your target B2B customers, but their solutions and approach can differ significantly.

For example, a cloud-based accounting service could be a secondary competitor to an on-site accounting software solution. Both address the need for business accounting, but the delivery method is different. The difference in assessing the viability of one over the other could be the number of users each solution provides for based on cost and features.

The threat of a secondary competitor is always lurking to grab the prospects’ attention. You can ward off aggressive encroachment by emphasizing the unique benefits your solution or service brings that secondary competitors might lack.

The Other

Be aware of the “substitute”, businesses that offer entirely different products or services but can ultimately achieve a similar result for the customer. They might not seem like a threat, but they can still divert attention and resources and appeal to customers who might be looking for a completely different approach.

For example, traditional public relations agencies, which carved out a distinct space within marketing and communications, saw advertising agencies, marketing companies, and big consultancies encroach on their space during the advent of web-based communications e.g. social media, digital advertising, and data-driven marketing.

Relative to any competitive threat, data and information can help you make informed strategic decisions. In addition to the many online assets, there are various paid tools and techniques to research and analyze your competitors, such as market research reports and competitive intelligence tools that assess competitive data and news.

By understanding direct, secondary, and alternative competitors, you can develop a well-rounded understanding of the competitive landscape. This empowers you to make informed decisions about your product development, marketing strategies, and overall business direction.