Competitive analysis is not about analyzing the competition
Companies conduct competitive analysis to make sure their products and services are better than those offered by competitors. But reacting to feature-to-feature comparisons is no guarantee of success. Competitive analysis, when seen through a jobs-to-be-done lens, is not about head-to-head comparisons. Instead, it’s about assessing how much better or worse a product is at helping the customer get a job done.
Myths that mislead
Traditional competitive analysis almost always involves a technical comparison of product specifications and features, yet the analysis is conducted without knowing how customers measure value or how much value competing features deliver to the customer. This is the problem, and the myth that misleads: companies are not competing against other companies or their products. They are competing for the customers, and their one goal is to create value for them. And there is only one way to do that: by offering a product or service that is better than any other at helping them get their jobs done.
To gain such an advantage, a company must know exactly what customer needs are unmet (where customers struggle to get a job done), construct solutions that address them, and refine the processes required to deliver those solutions. And they must do that continuously, so their competitors can’t catch up.
Why compare products?
To conduct competitive analysis effectively, all the customers’ needs must be known. After all, customers measure how well they’re getting their jobs done by how well those needs are met. But in nearly all companies, managers can’t agree on what a customer need even is. If they don’t know what those needs are, then there’s no way they can assess how much better or worse a product is at helping customers get their jobs done. And this is why companies compare product features instead. Unfortunately, this merely leads to feature wars, even when the features are irrelevant. That shouldn’t be the outcome of competitive analysis. Rather, competitive analysis should provide the information to beat competitors through developing products and services that help customers get a job done better.
Conducting competitive analysis
Our approach to competitive analysis works because it is built around a solid definition of what a customer need is. We have discovered that customers consider between 50 and 150 metrics when assessing how well a product or service enables them to successfully execute any job. These metrics (or desired outcomes) are the customer’s needs and the power behind our innovation process, Outcome-Driven Innovation (ODI).
To conduct an effective competitive analysis, we first uncover all 50 to 150 of the customers’ needs. Then we use quantitative research methods that reveal just how satisfied the customers are with their ability to address each of the metrics when using company and competitor’s products. Using this approach, we can see just where the products (and the competitors’ products) are weak and strong at helping customers get the job done, and where to invest to help customers get the job done better. This is the ultimate in competitive analysis because the insights come directly from the customers, and the assessment is based on the actionable metrics the customers use to measure value.