There is an open house tomorrow at Forrester being hosted by Tom Grant of the Heretech fame.

It starts at 5:30pm, and is happening in order to host lively discussion on, what else, product management and product marketing issues. Specifically for this first session, there will be a focus on how social media is changing product roles within all types and sizes of organizations.

If you are in the bay area, be sure to stop by and say hi to Tom!

I found this fascinating quote today:

If you look at our portfolio, you’ll see quite a few startups created by young visionaries and quite a few startups created by serial entrepreneurs who are swinging for the fences. There isn’t much else to be honest.avc.com, A VC, Oct 2009

You should read the whole article.

The last component I’ll discuss of the competitive analysis process is culling marketing and sales collateral from your list of identified competitors.

Why do this?

You want to be acquainted with what they are putting out there. It should give you a sense of how their products are being positioned (however poorly or not). In turn, that should give you a sense of a) how strong your own positioning is and b) positioning around that competitor as a result.

These materials can also be used as a quick way to give others in your organization an idea of the lay of the land. It’s better for your sales guys to go in to a discussion about why your product is better as prepared as they can be, instead of not really knowing how the competitor’s wares are being sold. By sharing these materials cross-functionally, you setup the chance everyone knows what a prospect has already hard and/or read so points can be more easily communicated and/or refuted if need be.

So sure, it’s a study in MarCom. But all in all, that’s not a bad thing, due to the core messaging via those materials.

The process doesn’t require a lot of explanation – collect what you can, study it, decide what is important and why, and discard the rest.

One of the regular questions I (and I’m sure others) face when it comes to competitive analysis is, “what are they charging?”

This is an especially tricky question to answer accurately.

I’ve gone about this in a couple of different ways – obviously, when you are dealing with B2C companies that publicize their prices, it’s simple. But before getting in to potential methods for gathering this data, I wanted to bring up a point as to why this is important information to acquire.

The first is sales. When you are assisting your sales team, it’s beneficial to have information (that you probably don’t want them presenting to prospects) regarding prices. It helps to know whether you are seriously undercutting a deal or coming in way too high.

The second is to assist you with value-based pricing. I’ve written about pricing before from a different approach (cost-plus), with regards to a specific scenario. But value-based becomes critical the further your product proceeds through its lifecycle.

But, I digress.

Now, I’m certainly not advocating being unethical here. You have to make the choice as to whether gathering pricing data is worth going through this process for your organization.

It comes down to engaging your identified competitors in a brief conversation – typically with one of their sales reps. You don’t want to take up a lot of their time and resources with this. Get the pricing, maybe some information regarding how they are positioning to early-stage prospects, and move on.

I feel like I’m exposing some secret here, perhaps foolishly. Maybe not. Chances are, if you aren’t doing this with your competitors, they are probably doing it with your sales reps. I seem to recall (maybe incorrectly) that Rich Mironov had a great chapter on an effective process for gathering this information in his book The Art of Product Management. I would verify that, but can’t quickly find the book for some reason.

Your next question might be, “OK once I have a competitor on the line, what do I ask?” The trick is to keep it short and simple. Of course, you’re going to need to tell them you are calling from Some Company A and are interested in buying their product and/or service. Really, it’s that straightforward. I don’t like doing it, but I feel that the data is valuable information to have. And again, some product manager from that company is probably calling in to my business to achieve the same result.

Of course the conversation will take some turns and you can glean further data. But once you have what you need, just tell them you aren’t interested so the conversation can close out and you don’t show up in their pipelines and sales reports. Not for any reason other than, it’s just a drain on their time and resources, which you don’t want.

How I missed this one yesterday I don’t know. But whatever you do, be sure to read through Fred Wilson’s post Ten Characteristics of Great Companies. Awesome stuff, and well worth the time to check out.

One of the key take-aways from a competitive analysis exercise is how you end-up positioning your product (and your organization) against those competitors. Especially early on in a product’s lifecycle, this is crucial. When you have executives out there talking up what you’re doing, the last thing you want is for them to blurt out something about “oh, company so-and-so? Yeah, compared to us they are just horrible. We are SO much better.”

Better to be prepared for those situations.

I’ve done this a couple of different ways – typically in the form of a quick reference sheet just listing the competitors you are researching and the providing some basic points about how you and your offering are different. Of course, you are communicating how you are in fact better – but you don’t want to come out and specifically say that. If you did, it wouldn’t be competitive positioning.

Let’s look at some examples.

Example – Gaming Consoles

I play video games pretty regularly and I have an XBox 360, PS-3 and PSP. So for the sake of this exercise, let’s say you are competitively positioning the XBox 360 against the PS3.

Point 1 – The PS3 supports Blu-ray technology.

XBox 360 – Potential Positioning

While the 360 does not have this functionality yet, it’s something we are very actively pursuing. We recognize the quality of blu-ray discs is unmatched in the market, however we wanted to ensure we kept pace with the overwhelming market trends for consumers and gamers alike.

We’ve found that while they are picking up in popularity, the vast majority of our customers continue to purchase for DVDs.

Point 2 – The PlayStation Network and Store are extremely user friendly and offers games on-demand.

XBox 360 – Potential Positioning

We agree that the PlayStation Network and store offering are solid and well thought out.

XBox Live has all of the same functionality, and actually strives to provide a deeper engagement with a customer’s lifestyle by providing a robust experience that includes tight integration with MSN Messenger, social networking capabilities, complete games on-demand (new and older titles), custom community-created games, as well as our extremely popular XBox Live Arcade.

Point 3 – Sony offers a superior development platform for game developers to leverage.

XBox 360 – Potential Positioning

While the PlayStation has excellent hardware at its disposal, Microsoft has a long-standing reputation of working hard (and really well) with the development community. With our depth of expertise, we are confident the tools and SDKs we provide to our partners ensure a smooth development process.

In doing so, we help them to get their games on the shelves as fast as possible, while still maintaining the necessary rigor with game testing and development to guarantee quality.

I hope that provides a good idea of what you are looking to accomplish by positioning against competitors.

One of the keys is acknowledge what the competitor DOES have without going overboard and making it sound like it’s the best. Of course Sony has a fantastic piece of hardware. It’s well-built, has top-of-the-line components and the Sony brand backing it up. So it would actually hurt MSFT to sit there and think, “gee Sony just totally sucks. They have nothing to offer – how could anyone possibly even entertain the idea of buying such an expensive and poorly put together piece of plastic?”

Acknowledge what the competitor does and then immediately shift back to how your organization and your product are better – and why. Doing this kind of thing really opens up the fluff gates. Again, MSFT could start throwing around terms and phrases that make no sense but sound really, really shiny. For example, “…the 360 is a robust tool for lifestyle convergence.” Stick to what it is – a DVD player, a gaming console, with some other really cool things added that are loved and adored by certain segments of the market.

It’s crucial to keep it on a track that everyone can understand what it is and why it’s great. Another helpful resource may in fact be your sales group – they very well may be able to shine some light on what the competitors are saying to win deals (i.e., how are they positioning their product against yours). This can certainly help when coming up with ways to position around the competitors.

However, all of this at the end of the day is simply wordsmithing – you as the product manager must be able to separate fact from fiction and control fluff that may be getting put out there in a sales cycle, or in marketing collateral. Always, always base how you are positioning in fact, not “what sounds good today.” You’ll get in to far less trouble that way, and engineering will probably end-up thanking you for it at some point down the line.

Many things have been written about SWOTs, so I won’t take up a lot of space here. However, I will always do them for each identified competitor while executing a competitive analysis.

There are great, more detailed, descriptions about SWOTs over at QuickMBA and Wikipedia you can check out – both are really good.

Running this analysis for each of your identified competitors usually yields some excellent, and thoughtful, details. Even discussing the outcomes with your management team or peers can be helpful – you may discover (or think of something) your competition will probably look to do, which can certainly contribute to you making the best, and most appropriate, product decisions.

Of course, all questions are welcome and I hope folks find this helpful. I’m happy to answer any questions anyone may have about how to properly fill in a SWOT, so drop me a line!

I’ve put together a some pretty simple templates to help get you started – both in a document format and presentation / slide format. You can also download both in a ZIP file.

One of the hardest aspects of competitive analysis is to perform a detailed feature-by-feature breakdown of each of your identified competitors. This is much easier to do within a B2C space than B2B – simply because within B2B, you (more often than not) don’t have access to the products themselves to do the feature analysis.

With B2C products, you can either a) get access to them to analyze for free or b) pay a fee to get a license to analyze them. On the B2B side, you are probably going to have to deal with sales calls, trials, demos, and other avenues in order to get the data you require.

I’ve put together a simple Google spreadsheet you can use as a guide / template to get started.

First off, try to group the features as best you can – and really, you are looking for features that you have and competitors don’t and vice versa. Knowing what competitors have that your product doesn’t (and keeping up-to-date on it) can help you make some of your prioritization decisions.

Each feature can be categorized in the following ways:

• Yes – this means the company has the feature
• No – this means the company does not have the feature
• On Roadmap – this means the company has the feature on their roadmap
• In Development – this means the company is working on the feature
• N/A – sometimes, certain features are just not applicable to the company

Again, this level of detail is going to be very hard to get for B2B companies. However, during your travels (and when your sales reps come up against competitors) it will start to get filled in.

That’s really about it – no need to make this more complicated or anything – it really needs to be a simple, current spreadsheet of features showing how your product stacks up against the competition.

This shouldn’t be a singular tool to drive your decision-making and/or prioritization efforts; but it’s certainly a contributor. However, putting too much weight in the data this exercise yields may drive you to commoditize features for no real market reasons, so use your common sense.

I wrote an article for the latest issue of the Pragmatic Marketing monthly magazine on industry immersion – essentially, how to learn a new industry when you step in to manage a product within it. And then of course, keeping up to date with that industry and all of the data available to you.

Check it out and let me know what you think!

I did an interview with Tom Grant over on the Heretech podcast.

Go and check it out and let me know what you think!