How to tackle different forms of competition

What if the real threat to your business isn’t your most obvious competitor, but the one you’re not watching? 

Indirect competitors may not look like much on the surface, but they’re still stealing your customers’ attention. To win, you need eyes on the full playing field.

In this article, we’ll break down:

• The difference between direct and indirect competition
• How to identify your direct and indirect competitors
• How to deal with your direct and indirect competitors

Let’s get into it.

Direct vs. indirect competition

Your competitors can be divided into two main categories: direct and indirect. You’ve probably heard these terms tossed around, but understanding the difference is crucial for shaping your strategy and ensuring you’re not wasting time or energy on the wrong rivals.

Direct competitors are the ones you’ll come up against most often in sales conversations. They sell a similar product or service, targeting the same customer segments as you. 

Customers are likely comparing your offerings side by side, so it’s not just about having a good product but also beating them in a way that resonates with your target audience. If you’re in this space, you’re in a constant battle to prove why your product is the best option available.

Indirect competitors aren’t necessarily in your lane, but they may still be eyeing the same customers. These companies offer different products or services but solve a similar problem or fulfill a similar need. 

They may not be direct rivals yet, but as their offerings evolve, they could easily start encroaching on your market share, so it’s important to keep an eye on them.

And let’s not forget, sometimes you’re working at a company so innovative that there’s no one quite like you on the market. In that case, your direct competition might be nonexistent, but indirect competitors are still playing a role in your customers’ decision-making process.

Direct competition in B2B: Example

Let’s imagine you work for the task management platform Asana. Your direct competitors would be platforms like Monday.com and Trello. 

Why? Because all of you are catering to teams looking to collaborate more efficiently, keep projects organized, and improve transparency. You're all in the productivity and collaboration space, solving the same problem in a similar way for similar customer segments.

When customers are comparing these platforms, it’s about which one meets their needs in the best, most efficient, or cost-effective way. 

This is where your competitive research should shine, focusing on feature sets, pricing, user experience, and customer feedback. It's all about positioning your product as the superior choice in this crowded space.

Direct competition in B2C: Example

Say you work for Adidas. Your direct competition? Nike. Both brands are household names in sportswear, offering athletic apparel, footwear, and gear at similar price points. You’re not just selling sneakers – you’re selling performance, style, and identity.

Consumers are constantly comparing quality, design, brand reputation, and even which athlete or celebrity is backing each product. It's a game of perception and positioning just as much as it is of product.

So, your competitive research should focus on more than materials and price tags. Think customer loyalty programs, influencer partnerships, cultural relevance, and brand storytelling. Because in B2C, winning often comes down to who tells the better story and delivers on it.

Indirect competition in B2B: Example

If we stick with the Asana example, Airtable is an indirect competitor. While Airtable also targets teams and can be used for task management, it’s not directly competing with Asana; it focuses more on data management and app-building, while Asana is primarily designed for collaboration and work management. 

The two are different beasts, but they still serve the same audience in terms of improving workflows and team productivity.

Then there’s Todoist. While Todoist is primarily aimed at individuals managing their personal or professional tasks, its features can be used for team projects, which puts it in the indirect competition category. Asana and Todoist may not go head-to-head on features, but they’re targeting similar themes in their content and marketing, like productivity, task management, and remote work.

While these indirect competitors aren’t as immediately threatening as direct ones, they still shape the playing field. Keeping an eye on their moves can help you anticipate shifts in customer expectations – and uncover new ways to stand out.

Indirect competition in B2C: Example

Let’s come back to Adidas. While your direct competitor is Nike, Lululemon is a classic case of indirect competition. It’s not built for elite athletes in the same way, but it attracts a similar audience – consumers who want stylish, high-quality activewear. Its focus on wellness, community, and lifestyle branding makes it appealing to customers who might otherwise shop Adidas.

Then there’s Apple. With products like the Apple Watch and its expanding ecosystem of health and fitness apps, Apple isn’t selling shoes – but it is shaping how people engage with exercise and fitness. That influence can pull customers toward a fitness experience led by Apple and away from platforms Adidas is trying to build around performance and tracking.

These kinds of indirect competitors might not be targeting the same buyer directly, but they still influence where customers spend their time, money, and attention. Tracking their evolution helps you stay culturally relevant – and keep your brand front of mind.

How to identify your direct competitors

Identifying your direct competitors might seem like a straightforward task – after all, you know who you’re up against, right? 

Well, it's a bit more nuanced than that. In reality, pinpointing your direct rivals requires a mix of research, intuition, and some strategic thinking. 

Let's break it down.

1. Understand who your customers are considering

First things first – customer feedback is key. Customers and prospects are the ones making the decisions, so listening to them can reveal a lot about who your real competitors are. Conduct customer interviews to uncover which other brands your prospects are considering when they’re deciding between you and the competition.

Win/loss analysis (a fancy way of saying, “Hey, why did you choose them over us?” or vice-versa) is incredibly useful here. So, if you don’t yet have a win/loss program, now’s the time to build one. 

And don’t forget about customer success (CS) teams – they’re often the first to know where churned customers are going.

Sales teams also play a crucial role. These reps face competitors in deals every single day. If they’re hearing the same names pop up repeatedly, those are your direct competitors. 

61.4% of competitive intelligence (CI) pros prioritize competitors based on how often they come up in deals, according to the 2024 State of Competitive Intelligence report. And for good reason – if your product is being put head-to-head with another in deals, that’s a sign you’re in direct competition.

2. Dig into their products and strategies

Once you've gathered some insights from your customers and sales teams, it’s time to dig deeper into the competition. Look at their websites, product documentation, and press releases to get a solid understanding of their offerings and strategies. What problems are they solving, and how do their solutions stack up against yours?

In your research, pay close attention to their product positioning. Are they targeting the same pain points? Are they focusing on the same customer needs? Understanding their positioning can give you valuable insights into how they’re approaching the market.

3. Harness the power of social listening

Social media isn’t just a place to post memes – it’s also a goldmine for competitive intelligence. By tracking mentions of your competitors across platforms, forums, and review sites, you can uncover what customers are saying about them. 

Tools like Google Alerts, social listening platforms, and even forums like Reddit can help you stay in the loop. 

4. Prioritize your top competitors 

Not all competitors are created equal, so once you’ve gathered your intel, prioritize them. If two products are very similar to yours in features and pricing, those should be high on your radar. In fact, 27.7% of CI professionals prioritize competitors whose products are most similar to theirs.

But don’t just focus on the obvious ones – look at the top 10 competitors in your space and see how they’re positioned. Are they carving out a niche? Creating an entirely new category? 

In the Competitive Intelligence Playbook, CI pro Andy McCotter-Bicknell recommends using the 3C framework to understand where each competitor stands in the market and identify any gaps that might be opportunities for you to differentiate.

“But what is the 3C method?” I hear you cry. So glad you asked.

“It’s [about] identifying your top ten competitors’ strategies by using the following brackets: 

Competing (for market share)

Carving (a niche)

Creating (a category). 

Once you finish this exercise, you’ll see where there are gaps in your landscape - untapped audiences, product potential, etc. (i.e. opportunities for you to invest in to differentiate).”

– Andy McCotter-Bicknell, AI Product Marketer at Apollo

How to identify your indirect competitors

Identifying indirect competitors can be a bit trickier because they’re not as obvious as your direct rivals. 

So, how do you find them? Let’s break it down.

1. Start with keyword research

Now’s the time to put SEO tools like Ahrefs and Semrush to good use. Start by tracking the keywords that your direct competitors are ranking for and expand your search to see who else is competing for those same search terms. This will help you uncover companies that might not offer identical products but are targeting similar customer needs.

Google Alerts is another easy tool you can use to keep tabs on indirect competitors. Set up alerts for keywords related to your industry, and you’ll get a stream of information about companies entering your space, even if they don’t seem like direct competitors at first glance.

2. Keep an ear to the ground on social media

Social listening tools are your friend here. Monitor social media and customer reviews to see what people are saying about alternatives to your product. It’s an easy way to spot companies that might be sneaking into your market without you even realizing it.

3. Watch out for macro trends

Shifting customer behavior can be a big indicator of indirect competition. Coming back to our Asana example, if your customers are increasingly adopting tools focused on automation, like chatbots or AI-driven task management apps, that could signal a rise in indirect competition. 

These tools aren’t directly competing with Asana, but they’re addressing the same need for increased team efficiency and productivity. As a result, they’re pulling some of your potential customers in a new direction.

How to deal with direct competitors

Dealing with direct competitors isn’t just about keeping your product in tip-top shape – though that’s definitely part of it. It’s about strategically positioning your product, gathering intel, and knowing how to respond to competitive threats. 

Ready to take on your competition? Here’s how you can do it.

1. Know them inside and out

First things first: understand your direct competitors. This isn’t just about knowing their product features (though that’s still important). It’s about diving deep into their positioning, customer base, and overall strategies. What problems are they solving, and how do their solutions compare to yours?

Check out their website, product documentation, blogs, press releases, and even hiring trends (yes, their job postings can reveal a lot). You’ll get insights into where they’re heading next and what new features or expansions might impact your market. 

This is an area that doesn’t always get the attention it deserves. According to the 2024 State of Competitive Intelligence report, only 19% of CI pros keep an eye on their competitors’ positioning.

2. Listen to your customers and sales reps

Your customers are one of your best sources of competitive intel. By talking to them, especially through win/loss analysis, you can uncover who they’re comparing your product to and why they made their decision. Getting direct feedback from customers about what they love or hate about your competitors’ products can provide actionable insights.

Your sales reps are also on the front lines of competition. They hear about competitors constantly, so make sure you’re tapping into their knowledge. Regularly check in with your reps to understand who else is being considered in deals. This helps you track the competitors that are most likely to affect your revenue and retention.

3. Dig into their marketing and customer success strategies

When gathering competitive intelligence, 15% of CI pros focus on their competitors’ marketing, and 14% focus on their sales and customer success strategies. 

Understanding how your competitors engage their customers – whether through content, social proof, or other channels – can reveal gaps or opportunities for you to outshine them.

4. Gather and validate specific intelligence

Here’s where the fun begins – it’s time to dig for more specific intel that may not be readily available. 

Use win/loss interviews to understand your competitors’ pricing, features, and what customers like or dislike about their offerings. You can take it a step further by analyzing competitors’ pricing models, especially through methods like “order of magnitude” questions in interviews.

Don’t just rely on publicly available data. Leverage tools like Gong and ZoomInfo to analyze sales conversations and customer interactions for insights into competitor strategies and pain points. 

You can also conduct targeted Google searches using filters like "competitor name pricing filetype:pdf" to find hidden gems in support docs and proposals, where pricing details or competitor information might be shared.

Make sure you validate your findings. One data point isn’t enough. Always cross-check information from various sources and get feedback from your customers, sales, and marketing teams to confirm what’s accurate.

5. Position yourself as the solution

With all the data in hand, it’s time to position your product as the clear choice. Focus on the benefits your product provides and how it meets your customers’ needs better than your competitors. Highlight where your product excels and where theirs falls short, positioning yourself as the “antidote” to their weaknesses.

Instead of just comparing features, emphasize emotional benefits – like superior customer support or a more intuitive user experience – that are harder for competitors to replicate. This is how you show your customers why your solution is the better fit for them.

6. Enable your teams with competitive content

Lastly, once you’ve got a clear understanding of your direct competitors, make sure your internal teams are aligned. 

You’ll want to create sales enablement content like battlecards and pitch decks that help your team confidently position your product against the competition. Update these resources regularly to reflect the latest competitor developments, so your teams stay ahead of the game.

How to deal with indirect competitors

While direct competitors take the spotlight in most competitive analyses, don’t sleep on your indirect competitors. They might not seem as threatening at first, but they can sneak up on you. Handling them requires a more subtle approach, but it’s just as important for your long-term strategy. Here's how to deal with them.

1. Keep tabs without overloading

Since indirect competitors don’t pose an immediate threat the way direct competitors do, you don’t need to dedicate the same amount of resources to tracking them. However, that doesn’t mean they should be ignored. Set up a regular cadence – think once a month – to check in on them. 

Use tools like Google Alerts or social listening platforms to monitor their moves without drowning yourself in data. This way, if they pivot and start encroaching on your territory, you’ll be ready.

2. Understand their positioning and approach

While indirect competitors might not sell the exact same product, they’re still solving similar problems. It’s critical to understand how they approach the market and the solutions they offer. This will give you insight into how they meet customer needs, and how you can better position your own product. 

For example, if your product is focused on team project management, and your indirect competitor is offering an innovative personal productivity tool, both are aiming at efficiency but from different angles.

Look at their marketing strategies, customer feedback, and the value proposition they communicate. The goal is to understand how they frame their solution and what makes them appealing to your target audience. 

3. Use their weaknesses to your advantage

While indirect competitors may not directly threaten your market share, you can still capitalize on their weaknesses. 

For example, let’s say you’re in the task management space and your indirect competitor is great for data-heavy project management. However, its complex interface can be a barrier for teams that need something more beginner-friendly.

In this case, you can emphasize how your platform offers easier onboarding, simpler workflows, and a more intuitive user experience for teams that want to get up and running quickly, without the steep learning curve your competitor’s product requires.

4. Maintain flexible competitive strategies

Unlike direct competitors, whose strategies are often easier to track and react to, indirect competitors require more flexible strategies. Don’t let your focus on direct competition blind you to the potential impact of these companies. Regularly review and adjust your approach to ensure you’re staying competitive across the board.

Time to take charge of the competition

Competition – whether direct or indirect – can be daunting, but it’s also an opportunity to fine-tune your strategy and stand out in your market. With the right intelligence and a focus on your product’s strengths, you can outmaneuver competitors and position yourself as the go-to solution.

Now’s your chance to take control and use these strategies to lead the pack.