Competitive analysis requires hard, cold honesty

A relatively tangential line of one of Maureen’s posts last week caught my eye:

There’s also an interesting rundown on their picks of the best brands for 2007. Lots of overlap with the best marketers - and some interesting choices: is Blackberry really a stronger brand than Apple, or is it that Apple is considered a consumer brand, not B2B? The commentary does address this, noting that iPhone is a competitive threat, which they see as sex appeal vs. reliability.

If that kind of thinking is going on among mobile phone manufacturers, it’s very good news for Apple! Yes, there is a big sex appeal component to the iPhone’s success. But that’s fleeting; already everybody’s talking about hot new phones from other manufacturers. If I were a product manager for a competing product, this is what I’d be paying attention to:

• iPhone users tend to be rapturously happy about the web browsing experience on the device.

• Apple’s recent release of the software development kit for the phone is a bit of catch-up, but their model for distributing apps - in which they host everything for a cut of the revenue and make everything available through the iTunes store or an application on the phone - is potentially revolutionary. I’m quite good at this stuff, and I found installing apps onto my old Windows Mobile device at best clumsy and at worst an exercise in frustration. This distribution model could disrupt things in a way that’s very good for Apple and the iPhone.

• They’re aggressively adding enterprise features like Exchange support and centralized security administration for business users.

Does this mean that the game’s over and Apple will win? Of course not. RIM and Windows Mobile have considerable advantages of their own. But if anybody is sitting around saying, “Oh, the iPhone, that’s just a cultish Apple thing that people buy because it’s pretty,” they should be preparing to have their lunch eaten.

Is there a similar story in your market? It’s human nature to focus on how we’re better than the competition; after all, we all root for our own team, we’ve put our own passion and work into our own products, and we can see how it’s just so obvious that we’re great.

The hardest thing about competitive analysis is tossing all of that aside and really, really understanding why there are customers who look at our products, and say, “No thank you.” Or, “Nice, but the other one fits our needs better.” I don’t mean the “they just don’t understand!” analysis, but really getting it.

Here’s a little exercise: get excited about your competitor’s product. Figure out what their product team is hyped up about. Figure out why they are excited to come into work and think of ways to beat you. And believe it. Be able to explain it so well that your coworkers are looking at you in horror and wondering if you’ve just accepted a job offer up the street.

It’s very, very rare that one product is really hands-down better than another; certainly it is for some users, but almost never for everyone. Get a deep understanding of that and a real conviction about the ways that your competitor really does outdo you… and you’ll have taken the first step to success.

That success might come in the form of changing your product. It might mean identifying the right segments where you are the best choice and focusing there, instead of beating your head against the wall trying to win customers who’d really be happier without you.

You can’t do it, though, if you’re doing competitive analysis that makes you feel good about your business while a more focused competitor is busy taking it away from you.

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