When I was Head of Product at eBay, over 10 years ago, I had the opportunity to listen to Heather Gordon Friedland, then the VP of Product for Consumer Selling at eBay, talk about our competition. 

When I work with the product leaders of the companies I mentor on their competitive analysis, they usually come up with a comparison table for each competitor, that includes mostly features.

If you think about online consumer selling – when you have something you don’t need and you want to sell it – you can immediately list eBay’s direct competitors like Craigslist. Heather’s presentation could have been about Craiglist’s features, the ones we are lacking, the ones we have and they don’t, but that’s not what she talked about.

Instead, Heather said that despite what you might think, eBay’s largest competitor in this space isn’t Craigslist and the likes of it. It is Facebook. When you think about it, it makes perfect sense: if you have something you don’t need and you want to sell it online, the easiest way to do so is to post about it on Facebook and ask your friends to share it with anyone who might be interested. In some cases, there would be dedicated Facebook groups for certain types of products. I know I bought and sold a few things like that. It was before Facebook had a dedicated marketplace platform, but it still worked really well.

As the presentation continued, Heather didn’t talk about Facebook’s features either. Instead, she showed some numbers to see the impact that the competition had on us and shared general plans regarding what eBay is going to do about it. She wasn’t trying to shy away from the fact that Facebook was a threat to eBay, and she also didn’t run into the most common pitfall of a plain feature comparison.

She could have done that. She could have talked about features, and how we are so much better than Craigslist, but had she done that I probably wouldn’t have been writing about it today. The fact that our largest competitor was Facebook is something I remember more than ten years later.

When you need to prepare a competitive analysis, on top of the facts that you need to gather, you need to tell a story. Here is a structure that will help you talk about what really matters, and help people remember it after you leave the room.

The Type of Competition We Are Facing

When you talk about the competition it is tempting to dive right into specific competitors and talk about them. In some cases, your manager would ask you about specific competitors. Don’t worry – we will get to talk about specific companies – but in context. 

To begin your competitive presentation, you should explain the type of competition that you are facing. You can start by going one type after the other and ask yourself if you see competition in that category. It will help you broaden your thinking to see if you missed types of competition that weren’t the usual suspects.

Then, just to make sure you didn’t miss anything, map the companies you have in mind in each category and see if anything is missing. You can also look for additional competitors in each category – it’s an easier search now that you know what you are looking for.

This map should be part of your presentation, first in order to help people understand how you define each category, and second, because you want to list the names early on so that your audience doesn’t think that you are not going to address specific competitors. But it’s a teaser, not an in-depth analysis of each just yet.

Note that you will most likely see more than one type of competition, and even quite a few. That’s normal and makes perfect sense, as not all customers want the same thing. 

Which Customers Pick Each Type

Now that you have described the types of competitors that you see, it’s time to dive in. But wait! 

You need to dive into the category level, not (yet) to the specific competitor level. There is usually much to say about the category itself, and these insights are typically more important strategically than one competitor or another.

One insight that I find with almost every company I work with, is that specific customer profiles choose specific types of competitors. Analyze your deals to find these correlations. This requires some additional work on your side, but the insights you will get are invaluable. 

As you do the work, remember that you are looking for big-picture tendencies, not 100% accuracy. For example, it’s okay to say that generally smaller companies tend to choose a certain category, even if occasionally you see a different case.

This analysis sometimes leads to deeper insights. For example, if the customer profiles don’t vary by size, what do they vary by? Maybe your industry has a maturity model that you can formalize. Customers need to be ready for you, and perhaps some have a long way to go.

You need to be able to tell a coherent story for this part, one that makes sense and explains why certain customers pick certain types of categories. There is a reason for almost everything, this is your opportunity to find it and say it out loud.

How We Are Doing in Each Category

Now that we understand what the outside world looks like, it’s time to shift the focus back to ourselves. Before we compare ourselves to specific competitors, we can analyze how we are doing in the category in general.

You should talk at the business level and results, again not features:

Start with the list of the main players in this category – you have it already from earlier on. What do potential and existing customers think about each player here? If you had to define it in just one sentence, what would people say about each?

Thinking about it allows you to explain how you are positioned in the category. Are you perceived as the leader, and it’s yours to take if only you don’t mess up? Are you the new kid on the block who has a lot of potential but requires your customers to take a leap of faith to believe that you will realize it soon? 

Now it’s time to add some data into the mix:

• What is your win/loss ratio in the category?
• At which phase of the funnel are you failing?
• What causes you to win?
• What causes you to lose?

Now, finally, it’s time to dive into specific competitors, if relevant. If you have a single major competitor, let’s compare ourselves to them and understand what are the main challenges we see.

Note that the answers should be broader than the features. It could be about your positioning, the price, the business model, customer maturity, and of course your product – but it’s just part of the story.

How We Are Going to Win

Now that we understand in depth each category, its challenges, and our performance in it, it’s time to talk about what’s next. I know, a competitive analysis is not a roadmap presentation, but what I’m talking about here is not related to features.

It’s about strategic choices that the company needs to make: are you even going to compete in all of these categories? Perhaps you realize that there is no benefit in chasing after competitors from a certain category because the customers who choose these competitors aren’t ready for you, and adding features won’t change that.

The same analysis might lead you to a different conclusion – that you must compete there because otherwise when they are ready for you they will have a high switching cost and you will have a problem. But the solution in this case is probably a different product or offering that suits customers who want something simpler or smaller.

For categories that it’s clear that you want to compete in, you should explain at a high level how you are going to win. Again, it’s not about features. It’s about your strategy: we need to work on our awareness since once they try us out they will never want to leave. We are climbing the ladder and need to be perceived as a more mature company so large corporations feel they can rely on us. We must adapt to this new trend so that we are not left behind. 

Each such direction has much more than product features, even if it does involve a ton of development. Make sure you keep everyone relevant in the loop.

A Word About Features

I said time and again that you shouldn’t talk about features in your competitive analysis. Well, you should, when relevant.

You can include a general list of features to make a point about a certain type of competitor. For example, they give an end-to-end solution so they have features like X, Y, and Z. It helps people understand you better, and adds to your credibility. It shouldn’t be the full comparison table, stick to what you want to say, but you can include it as an appendix if you want.

In some very specific situations, it is about the features. If you are going head to head with one competitor, and the products and all other considerations like the price, the company, and the focus, are really on par with each other, it might be the little details that make the difference. 

It happened to me when I was a product lead at Imperva 15 years ago. Our largest competitor was really good, and so were we. We were both Israeli companies, more or less at the same stage, they only had one product line and we had two – which led to some benefit as part of the synergy but also to less focus of the salesforce on the product I led. The competitor we had was playing strongly, going all in against us. And so I needed to make sure our salespeople knew how to win them over. 

The competitive situation was really about features, but sending a flat comparison table wouldn’t have helped anyone. Instead, I prepared a presentation for the annual Sales Kick-Off meeting. I chose the 10 most important things that I wanted our salespeople to know about this specific competitor and explained in detail how to win against each argument they might raise.

It made the whole difference, and like in Heather’s case, people still talk to me about that presentation even after many years. When you conduct your competitive analysis, make sure you tell a story that people can understand and remember.