For most people, when they think about competition in the marketplace, they think about the other companies that offer the same service they do. If you are a marketing strategist, you look at other people who provide marketing strategies. If you are a financial coach, you look at other financial coaches. If you are a graphic designer, you look to other freelancers or agencies who design the same things you do.
What is often missed in a competitive analysis is the competition that doesn’t directly do the same thing as you, but could replace what you are doing in a different way.
Think about a personal financial coach. Someone who helps you plan your budget, get out of debt and create a long-term savings account (emergency fund FTW). They are likely to look to other financial coaches to see who the competition is. (If they’ve ever heard me talk about picking a target market, they’ll focus on a specific niche and know that the only true competition is those who focus on the same niche. But that’s another post.)
What they might not consider when it comes to competition are things like Dave Ramsey’s Financial Peace University, which a lot of churches offer for free, or you can buy from Dave’s website for $129. That’s a lot cheaper than a personal financial coach who might charge hundreds of dollars a month.
The difference, obviously, is the personal attention and the accountability. But someone could still choose FPU over a financial coach.
Another competitor financial coaches might not consider is a technology solution like Mint. It can be hard to put a financial coach in the same bucket as a free online software, but if someone just wants to get a better handle on tracking the money coming in and out of their accounts, Mint will do that for them. It is a technology solution to at least part of the problem a financial coach solves.
These kinds of competitors—Dave Ramsey’s FPU and Mint—are considered indirect competitors. Indirect competitors serve the same target market with a similar (albeit different) service that targets at least a part of the same problem.
Don’t miss out on the indirect competitors in your industry. You have to address why someone should choose you over both your direct and indirect competitors. If you don’t address the indirect competition at all, you are missing an opportunity to show your target market why you outshine everyone. No matter their price point or ultimate solution.
If you want to figure out where all of your competition stands—and start to get a glimpse of how you stand out above the rest—download my FREE competition analysis worksheet.