This is one of several blogs in our latest series, “Delivering Bad News to Good People,” where we explore different types of bad news we’ve had to deliver and how these discoveries help companies create meaningful impact within their organizations.
Marketers often have their own preconceived notions about a competitor’s success or failure in the marketplace based on anecdotal stories they’ve heard in the industry. A competitive landscape analysis can confirm many of these assumptions. However, it may also disrupt some of these beliefs by revealing unexpected challenges.
Research that reveals unpleasant news like this can feel like a setback. It will force you to acknowledge some marketplace truths that are not in your company’s favor. Yet understanding the facts as they stand allows you to proactively pivot your marketing strategy to keep your company competitive in the long term.
At Cascade Insights, we are often in the position of delivering bad news to clients about their competition. Below are five examples of the kind of bad news that we’ve had to communicate to clients after a competitive landscape analysis. Here’s how they were able to use that information to respond to threats, plug feature gaps, adapt their messaging, and stay ahead.
Bad News #1: Your Competitor Doesn’t Suck
The context: A client of ours asked us to research the threat level of one of their competitors. Based on stories they heard from their own customers, this client believed that their competitor’s sales engagement platform was not fully meeting customers’ needs. They wanted to conduct a competitive analysis to confirm that hypothesis.
Unfortunately for our client, our research revealed that their competitors’ customers were generally satisfied with the product. They were pleased with its breadth of integration. They thought the interface was user-friendly and intuitive. Their customer service was timely and effective. Overall, the anecdotal stories the client had heard from their own customers were not a good reflection of the competitors’ full customer base.
Key takeaway: Be wary of forming a complete opinion about your competitor’s products based on a few informal stories that you’ve heard in passing. The best way to get a true view of customer perceptions is to talk to a range of customers who use your competitor’s solution on a daily basis. Only then will you get a true sense of whether they like the solution, hate it, or are simply just willing to live with its flaws.
Our clients were able to use this research to pinpoint specifically what features worked well for their competitor’s customers and which weren’t as effective. Then, they tailored their messaging to highlight the areas that they knew would be most effective.
Bad News #2: A Competitor Who Moved Up-Market
The context: One client of ours that specialized in workflow and integration automation asked us to research a smaller competitor of theirs. This competitor focused mainly on SMBs, while our client primarily targeted enterprise accounts.
We found that our client’s competitor was expanding. They were developing new features that seemed to be targeted toward the enterprise market. Since the competitor was already stealing market share from our client’s SMB accounts, this news was particularly threatening.
Learning of their competitor’s future plans allowed them to equip their sales teams with the information they would need to stay competitive. This included strong counterpoints to each of their competitor’s common claims, tailored particularly to focus on their competitor’s weaknesses and inexperience in the enterprise market.
Key takeaway: Your competitors rarely remain stagnant. In fact, they’re probably making plans to take market share away from you. Ignoring them or pretending they’ll stay in their vertical or market segment forever would be a mistake.
In our client’s case, learning of their competitor’s plans to expand allowed them to proactively develop a strategy that would prevent them from stealing enterprise accounts.
Bad News #3: The Market Doesn’t Need What You’re Selling
The context: A client of ours was selling a product that could track environmental dangers around physical locations. They wanted to conduct research that would help them find who would be most likely to purchase their product. Specifically, they were interested in learning if they should be focusing more on selling their product to businesses vs. individual consumers.
Our research found that businesses were not currently facing a compelling need for a solution like this. The regions that our client was selling into weren’t facing any increased legal or compliance concerns to report data on their environmental impact. As a result, businesses just did not feel the need for a product like our client’s at this time.
Key takeaway: You can’t sell what the market isn’t interested in buying. In this case, knowing customer needs prior to attempting to sell to a particular segment allowed our client to proactively pivot their go-to-market strategy. They decided to allocate their resources to be spent primarily on selling to their general consumer base instead of expanding to businesses.
Bad News #4: The Ankle Biter Becomes a Giant
The context: A software company client of ours wanted us to conduct a competitive landscape analysis to determine how big of a threat two established competitors actually were. They also decided to investigate a new startup that had been getting some buzz in the market.
We found that this new startup was actually much more of a threat than our client initially thought. After speaking with customers, we discovered the startup’s product had a ton of functionality and was easier to use than our client’s. With all the market momentum, this small startup threatened to beat out the old guard with their superior product.
Key takeaway: Yes, it’s important to keep tabs on your established competitors. But don’t forget to keep an eye out for new competition that’s emerging.
In this case, discovering this new company was a threat early on allowed our client to establish a strategy that would combat their influence before it became too strong. They were able to address their own product’s functionality and ease of use before it became a reason for their customers to leave them for the startup.
Bad News #5: Money Down the Drain
The context: A software company client of ours had recently purchased an online travel company. They wanted to get a better understanding of companies that offered similar services. This would help them to determine the steps they would have to take to become competitive.
Research uncovered that they would need to invest more money in developing new features for their product than initially thought. Ultimately, they decided the best business decision would be to wind down their new acquisition rather than invest more capital on an already over-saturated market.
Key takeaway: When looking to enter a new market, your potential competitors can provide you with valuable insights into the features that customers value the most. These can give you a more realistic idea of what it would actually cost for your company to develop the features necessary to compete in the current market.
Bad Competitive Landscape News Leads to Good Outcomes
Bill Gates once said “Sometimes I think my most important job is to listen for bad news. If you don’t act on it, your people will eventually stop bringing bad news to your attention. And that is the beginning of the end.”
Good marketers know they need to listen for any bad news. Understanding the truth of where they stand in their industry is the first step toward building marketing initiatives that will resonate with buyers.
If you want to take the first step toward actively listening to marketplace truths, give us a call. We can help you figure out where you truly stand among your competitors – and what you can do about it.
This blog post is brought to you by Cascade Insights. We provide market research marketing services exclusively to organizations with B2B tech sector initiatives. Learn more about how a competitive landscape analysis can help better prepare your organization for both threats and opportunities.
Special thanks to Tyler Honsinger, Director of Research, and Sean Campbell, CEO, for advising on this piece.
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