Just because you and your competitor are targeting the same market doesn’t mean you target the same customer.
Spend enough time in any company and you’ll find yourself in a meeting listening to someone say “Our competitor has XYZ features. We should add them, too.”
On the surface, this seems like sound logic. If you’re serving the same customer you should have the same features… right?
Not so fast! This kind of thinking is flawed in a few ways.
Why you shouldn’t define your roadmap based on your competitor’s product:
1: You can copy what you see. You can’t copy why it’s there.
When you look at a competing product, you see the results of their work. It might look fantastic and appear to work well. What you can’t see are the decisions that led to that product being built the way it is. You don’t know why they chose to make things look and work that way. You don’t know what research went into the decisions. You don’t know what business metric they are trying to influence (if any). You don’t know if your users would get any value from it.
Maybe they added that feature because a different competitor has it, in which case you’re all just chasing each other’s tails. Maybe it’s there because “the boss said so”. The truth is, you won’t know the rationale behind their decisions to evolve their products and following blindly puts your product at risk in the long term.
You could spend valuable time reverse engineering something that might not work for your customers. That time could be spent talking to your customers and understanding what they need and want, then building something you know will satisfy them.
2: You might be making the product harder to use.
The more features a product has the longer it takes for people to discover all those features. Adding more features adds more power to the product, and at the same time can add complexity that makes it harder for new users to get started, or for other users who don’t need that feature to begin with.
In a recent survey of enterprise software usage, it’s estimated that between 60% and 80% of features are rarely or never used. That’s a lot of wasted investment, especially when you consider that adding more buttons and options to a feature is likely to make tasks harder to complete, and increase user’s frustration.
3: You don’t know how to measure if it works.
By simply copying something from a competing product you overlook an important step: Tying product development to user and business goals. Without a specific goal in mind you have no way to know if this change is making the product better.
Which metric should move as a result of this change to the product? Does it increase satisfaction? Lower churn? Decrease support requests? The smartest product leaders are looking at product adoption and usage as the critical metrics to track.
4: You should be competing on value creation, not features.
Your customers probably want something different from your products and your company. Something you have that the competitor doesn’t offer, or that you do slightly differently. This is your differentiator. If you simply copy your competitor’s features, how will you be meaningfully different?
Some people just like doing business with certain brands. Not because of features, but because of brand affinity. Adding a feature won’t win those customers over because they align with the brand, not the features.
Think of the classic Ford vs Chevy debate. They both make cars and trucks with very similar specifications and features. However they use different positioning which builds brand affinity for one or the other.
Hilton, Marriott, and IHG are no different. They all provide a place to sleep, but they each do so in their own way. For example, different experiences and amenities create value for different types of people.
5: You’ll always be in 2nd place.
They say unless you’re the lead horse, the view never changes. Chasing and copying your competition instead of leading them or carving your own path isn’t what people aspire to. We’ve never worked with a company who wanted to be in second place, and customers typically don’t want to do business with the 2nd-best anything.
To win long-term customer loyalty and satisfaction you need to create something people want to use and a brand they want to do business with. To do that you need to understand their needs and build something that satisfies those needs. Copying someone else only gets you close to what they think their customers want, and will never completely align with your customers’ needs.
Why your product strategy can’t ignore your business model.
A simple example: Some companies don’t accept credit cards because the fees are more than their business model allows.
A major airline or hotel is unlikely to offer reviews of local restaurants on their website because their business is getting you there or offering accommodations, not providing, maintaining, and curating restaurant reviews. Instead, they might link to a partner website like Yelp or TripAdvisor for that.
Another example: The major hotel brand apps are starting to offer digital room keys so you can unlock your room from your phone. That might work at their scale because they have enough rooms to divide the infrastructure cost between AND they appeal to a more upscale customer who is likely to appreciate that service.
Meanwhile, a budget hotel brand with the same number of rooms might not offer this feature because their customers probably won’t want or be willing to pay for such a service.
These companies all serve people who want hotel rooms, but have different target customers and different business models.
Drawing the line.
Obviously some features are just table-stakes. Your product has to have them to be competitive in the first place. You simply can’t operate a business without the basic set of functionality needed for a user to complete the task at hand.
Assuming you already have the minimum features needed to be competitive, you also have to stay competitive. That means you need to decide which direction to take the product and what to add next. These decisions will determine your fate very quickly.
How to make product decisions that support your business model & add delight for your customers (enhancing your positioning and value)
Every product needs what Noriaki Kano calls the “Threshold Attributes”. These are the table-stakes features, the minimum you need to be functional to the customer. There’s no magic here, just stuff your product needs to be usable.
A key point of using the Kano model is that it assumes you know what will bring delight to your customers, or at the very least, what they find attractive. Unless you’ve done good user research you probably don’t know what will be exciting for your customers.
How user insights might influence your product roadmap:
(a completely fictitious example)
Let’s say a hotel which targets frequent business travelers is trying to decrease abandoned bookings at the property selection stage of the check-out flow.
We take a quick look at all the major hotel apps and discover they all show the property search results in a very similar way.
What would you copy to lower abandonment?
Would you make the images larger? Change the color of the price? Emphasize the brand logo?
We could try all these things in a series of A/B tests, but essentially we’d just be chasing our tails. We don’t know why competitor X decided to make the images that size or why they chose to emphasize the brand in that way. We don’t know what metrics (if any) were considered at that point of the design process, so we shouldn’t assume any of these cosmetic changes will help us meet our goals.
Instead, we should think about this problem a few ways:
- What is the mindset of our frequent business traveling customer at this point in the buyer journey?
- Do we know if they are comparison shopping on price, distance, amenities, or something else? If price, do we even want to differentiate based on price?
- Do enough customers have this problem to justify the investment needed to design and implement a solution?
- If we make this change, and assuming it works, what is the estimated impact on sales?
Doing some basic research with our customers, we discover that the majority of leisure travelers are comparison shopping on a combination of price and distance to their destination or an attraction, while frequent business travelers are primarily shopping by brand and distance to destination. This helps us prioritize the information we show our target audience.
Example: Business Traveler’s Priorities
- Brand (because they want a consistent experience)
- Price (within approved budget)
Now looking at the business model, we can see a long-term focus on being a premium brand and maintaining loyalty among frequent travelers, and our highest margins are on king rooms. Now we can make our product decisions in a way that supports the underlying business model.
We might decide to show the brand and location/distance with more prominence while keeping the price clear, but with less visual prominence. We might limit the number of search results to only those which show a statistically higher conversion rate.
There are a lot of product decisions that can come from these insights. While some of them might look similar to what a competitor is doing, you’ll have confidence you’re doing it for the right reasons, and you’ll have a way to measure whether they were successful.
Summary and Conclusion.
Again, just because you and your competitor are targeting the same market doesn’t mean that you target the exact same customer, that you understand your customers in the same way, or that you’re delivering the same value to them. Better user research, along with a solid understanding of where your users’ needs intersect with your business model will help you uncover new ways to create and capture value.
Bringing these questions and the insights they lead to into your design process will improve your planning, help you make better decisions, and give you confidence your product roadmap leads to success for your customers and your business.
How can we help your company use great design to achieve its business goals?
Whatever you’re building, our workshops and project engagements can help you do it better. Reach out to discuss your project or request a quote.