Competitive Positioning (Glossary Definition)

What does it mean for your company to be competitively positioned?

The reality is most companies have an idea of how they stack up against their competition. However, the problem is that idea may not be one-hundred percent or even fifty percent of the reality.

We break down competition into three different categories:

• Direct Competition
• Indirect Competition
• Non-Business Model Competition

Direct Competition

Direct competitors are the obvious competitors that you run into all the time at the tail end of the buyer's journey -- at the tail end of your sales cycle. When you send out a proposal and you're going back and forth with the client, these are the competitors who you're being lined up with like you're in a dog and pony show.

This is inherently who's clobbering your margins. Because your company's not well differentiated, you didn't intercept the client early enough. The client just sees you as substitutable, interchangeable commodities. Those are your direct competitors.

Indirect Competition

Indirect competitors do similar things to what you do. They sell similar products and services to your company.

The differences with indirect competitors is they’re either a lot larger than your company, they’re perhaps a lot smaller than your company, or they’re not quite as graphically relevant as your company. This means that if you sell a product or service where you know the majority of your clients like to purchase locally, someone that's across the country -- a few hundred miles or a few thousand miles away -- is not a direct competitor if you know you're buyer’s preferences are very strongly aligned with local.

Along the same lines, say that your company is doing $5 million a year in revenue. Is a company that’s doing $5 billion in revenue that is a thousand times bigger than your company really a direct competitor? You might see them as a competitor, but chances are, they don't even know you exist. They would be an indirect competitor.

Geography and size a lot of times are big determinants of whether someone is a direct competitor versus an indirect competitor.

Non-Business Model Competition

Non-business model competition is a completely different animal that people very rarely think about -- and that’s a big mistake. And I’ll tell you why. Non-business model competitors refer to the companies that are creating educational, thought leadership content on a regular basis about the products and services and the problems that they solve.

For example, let's say you own an IT company and one of the things that your IT company does is provide cybersecurity audits. You're not just up against other IT companies that are in your market that are similarly sized and provide similar services, you’re up against all of the other companies and organizations that create content about your topics.

These could be a local newspaper, a local business journal, a local association or chamber of commerce, or a software or hardware vendor with that you could potentially be a channel partner. It could be a competing product or something that you're already a channel partner for.

These are companies and organizations that have a vested interest in creating content about topics that are relevant to your future, potential clients but who are not in any way, shape, or form in your business model competing with you.

The Bottom Line

Think about those three broad categories. Because most of the time, when we ask people about competitive positioning, they're obsessed with direct competition -- the obvious competitors that they bump into. Many times they think way too much about indirect competition with companies that are way too big or way too small to be relevant to their ideal buyer personas that they’re looking to attract. Maybe they're not even in the same geographic region or in the same market.

But what usually catches people completely off-guard are non-business model competitors. Those are the ones that you're going to have to elbow out of the way to convince search engines that you have one of the ten best pieces of advice on a particular topic.

In terms of competitive positioning, don’t just think about what happens at the absolute end of the buyer’s journey -- in the last twenty or thirty percent when somebody is coming down the home stretch and ready to make a decision. We need to intercept them as early on as possible. In order to do that, our educational content has to rock our way to the top of the search results from a competitive positioning standpoint.

How do you define competitive positioning for your business? Share your thoughts in the section for comments below.  

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