Using data to understand competitive and market dynamics

Product managers know that understanding their market and competition inside and out is vital to the success of their products. Comprehensive market knowledge tells you what problems your customers are trying to solve, what they want, and ultimately what new features or products to build. Knowing the competitive landscape helps to set your business apart, allows you to create a strategy to deal with new competitive developments, and helps to arm your sales team to win against the competition. 

To gain this essential knowledge, product managers use a variety of data sources, metrics, and tools. Everything from quarterly reports to competitor websites to Google Alerts is used to get a comprehensive picture of the market and competition. The product manager becomes a bit of a detective, gathering clues from many different places that turn into a signal into what is happening and what is to come.

Because this information is so important yet the analysis may not be straightforward, validating the analysis results is extremely important. Results should be double-checked against multiple sources and ultimately verified with customer interviews and surveys. The context of the market and each competitor should also be taken into account. Things such as culture, politics, and economic forces can affect what the data is telling you.

For an expanded insight into how to best analyze competitors and the market, we talked with the following product managers who are experts in this area:

• Tolu Arogunmati (Product Manager at Meta)
• Francesco Corti (Senior Product Manager at Spotify)
• Anjana Kambhampati (Sr. Product Manager – Growth and Strategy (XaaS) at Cisco)
• Alvaro Mattos (Principal Product Manager at Eventbrite)
• Paolo Villacarlos (Product Manager at Cashrewards, ex- Klarna)

We asked each of them the following questions:

• What type of data is useful for understanding competition and the market?
• Which tools do you use for digging deeper on competitors and the market?
• How do you validate your findings on competitors and the market?
• What are some examples of understanding the competition and market that have led to positive changes for your product?

Many thanks to these product managers for sharing their invaluable knowledge with us.

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Q: What types of data are useful for understanding competition and the market?

There are many different types of data sources and metrics that can be used to understand your competition and the overall market. While there may be some clear-cut data available, generally product managers must get creative and dig through different sources to get a clear picture. Company data, app usage data, customer feedback, and win/loss data all bring different angles to understanding both the market and competitors. 

Additionally, don’t forget about adjacent players. These are not your actual competitors, but your customers may buy these products to help augment the functionality of your product. Knowing how to leverage these adjacent players against your competitors is beneficial; keeping an eye on adjacent players to make sure they’re not starting to enter your market is just as important.
Data can only give part of the picture. Product managers must also be aware of outside forces that are shaping the data, such as political, economic, healthcare, and cultural systems. Being aware of these interconnected systems can help product managers interpret the data they’ve collected and also make projections about the market’s or a competitor’s likely next direction.

The table below suggests both good sources of data to investigate and suggested data points to track from the data. Of course this list is not exhaustive, but it is a great place to start. Note that the same data point may be found in more than one data source. It’s useful to compare what you find from different sources to determine accuracy and also how different factors may affect the data.

Alvaro Mattos (Principal Product Manager at Eventbrite)

Understanding competitors and the market can be a very daunting task. But there are some sources of useful information:

• Market reports that come from companies such as Gartner, Forrester or IDC. These companies provide a really good overview about industries and trends, but lack insights to create a robust product strategy.
• Letters to investors that publicly traded companies post on their websites. Letters have great detail on how companies performed against their goals, changes in the market, and areas of interest. It can be a very dense read but it packs much more information and insights than market reports. 
• Websites of your competitors. They always pay off. I learned a lot from the Netflix tech blog when I worked in the Cloud Streaming industry. I used the information I found there to identify areas of opportunity and benchmark my product performance.
• Customer feedback. Customers are always unsatisfied. Their feedback can help to find areas that you can leverage to create competitive advantage. I usually partner with research specialists to conduct moderated interviews about specific topics.
• Your company databases which can help you quantify opportunities within your customer base, or your customer support contacts.

Paolo Villacarlos (Product Manager at Cashrewards, ex- Klarna)

Qualitative data

Collect customer sentiments about your product versus competitors through user surveys where customers are asked how they feel about using each of the products. Great qualitative feedback can also be sourced from customer support channels and publicly posted reviews across the Apple App Store, Google Play store, and consumer review sites such as TrustPilot. Even forums like Reddit can highlight where your product or the competition is failing to live up to customers’ expectations. 

Another easy way to stay on top of competitor and market news is to set up Google Alerts for your market category, as well as your 2-3 biggest competitors, configuring the alert to populate to an RSS feed. If you use Slack, the RSS app can be used to push that feed right into a slack channel of your choosing (a dedicated channel works best). This ensures you’ll never miss the latest developments in your space.

Quantitative data 

For consumer-facing products, app usage, downloads, retention, and engagement metrics are useful. Starting from app stores, you can get a sense of adoption based on the number of reviews an app has. The distribution of reviews helps identify competitively who is doing a great job at meeting their customers’ needs and may be worth keeping an eye on. 

Another easy quantitative way to identify and rank competition is Google Trends. You can use this to compare trends in your market. Whether you’re looking for new technology, a service, or even competitors, the trending data gives a good idea of where the heat is.

Tolu Arogunmati (Product Manager at Meta)

All kinds of data can be used. It’s really down to creativity and what you are trying to measure and understand. It can work like this: 

1. Choose a framework or a lens that you’ll use so that whatever data you are reading makes sense. In most cases, you need the data itself, a baseline of some kind, and a scale you use to compare data points.
   
2. Perform a micro to macro analysis or vice versa. Essentially, start from a single competitor to understand the market as a group of competitors. Typically, you start with business metrics. These are revenue, profits, customer/user base, employee base, market cap, and changes over time. These are standard data points so you understand the business or market size and basic financials. Since product managers aren’t typically looking to make investment decisions, we can pay less attention to balance sheet numbers like current assets, liabilities, and taxes. It does help to be aware of those however.
   
3. Isolate products and their metrics to understand the ecosystem. This is where a product manager needs some creativity and broad thinking. The data we are looking to unpack is how a group of products contribute to business metrics. For example, the iPhone as a product contributes immensely to Apple as a business. iMessage as a product contributes too but revenue cannot be used as a metric as it can work across iPhones, iPads, and MacBooks. We know that iMessage is an expected ecosystem experience. Instead of revenue, iMessage could use data points like messages sent per user per day to signal Apple’s total reach.
   
4. Consider the systems and adjacent forces where these products, businesses, and markets are situated. Markets, products, and businesses are interconnected with other systems such as political, financial, healthcare, and in many cases culture. Korea favors their chaebols, Canada is essentially led by its top five banks and financial services, the US favors capitalism, Ireland is a European-friendly tax haven, and China intends to lead the world in electric vehicles.
   
5. Know when the data is enough. You can keep going down the rabbit hole of data. There can be too little, there can be too much, but there is no clear “enough.” At some point, you’ll combine what you have and move on. 

Francesco Corti (Senior Product Manager at Spotify)

First we need to identify the competitors against the adjacent players. Adjacent players are complementary and help our product to address gaps with the “real” competitors. Ideally, for each competitor, we should know:

• The market revenue (at least estimated).
• The market penetration (how many customers they have and the growth of the customer base in time).
• Win/loss numbers and reasons (clusters of reasons for success/failure in each deal won or lost against each competitor).

Anjana Kambhampati (Sr. Product Manager – Growth and Strategy (XaaS) at Cisco)

Your competition might vary depending on the offers, customers’ needs, and the market. At a high level the following information is very helpful:

• Market segment and target audience (for example consumer, SMB, government organization, enterprise, etc.)
• Preferred consumption or licensing by the target audience (for example postpaid, prepaid, annual)
• Product feature set
• Geography
• Pricing
• Product reviews 
• Company’s financials (if public)
• Customer feedback
• Win/loss analysis

Q: Which tools do you use for digging deeper on competitors and the market?

After the basics are covered, product managers still need to dig deeper to really understand what’s going on in their markets. While things like basic business data and competitive websites provide a good foundation, when there are specific questions or more nuance needed, product managers need more sophisticated tools.

When the experts we spoke with want a more thorough understanding of their market and competitors, there are roughly three types of tools they use: websites, purchased data, and app/SEO tools. Put together, these tools provide powerful insights to give product managers the bigger market picture. Some of our experts’ favorite tools are listed below.

Websites

• Andreessen Horowitz
• BCG
• Canalys
• McKinsey
• TechCrunch

Purchased data

• Enterprise Technology Research (ETR)
• Nielsen

App/SEO tools

• Ahrefs
• Apple App Store
• Data.ai
• SEMrush
• Sensor Tower

Alvaro Mattos (Principal Product Manager at Eventbrite)

I usually default to market reports and specific websites to understand trends on the market. McKinsey is a great source of general information for customer behavior and established companies. TechCrunch and Andreessen Horowitz cover startup and disruptive companies in depth. Finally I keep up-to-date with the latest announcements from most of my competitors via social networks. I also like to visit competitors’ websites and read their investment relationships so I can have a grasp on their objectives and performance. 

Anjana Kambhampati (Sr. Product Manager – Growth and Strategy (XaaS) at Cisco)

Typically we rely on analyst data (e.g. reports from Gartner, Forrester, Canalys, etc.). In case we do not have market information we hire consulting groups like BCG and McKinsey to interview target audiences and gather data. We source data from companies like Canalys for SMB, while we use Gartner and Forrestor for enterprise and service provider segments. Cisco also sponsors studies for large internal projects to get an unbiased view of competition and markets. We also buy data from firms like Enterprise Technology Research (ETR).

Tolu Arogunmati (Product Manager at Meta)

As with most product things, it depends. Processed data helps. If you’re looking at a mature industry, there are analysts with regularly updated analysis for reports and data. For example Gartner or Forrester. You can typically subscribe or purchase their reports. Usually they are published annually, quarterly or monthly.

Raw data is readily available too. You can purchase marketing research data if you’re looking to perform your own analysis. The Nielsen company is based entirely on providing data on a lot of things. 

Data.ai is a tool for digital data especially concerning apps. There are a bunch of these companies focused on providing data. Even the Apple App Store tells you the top performing apps on the iPhone in multiple categories. You can use it as a proxy in the markets they correlate with. Sports apps for example are usually along the same performance for sports broadcasts. Google Alerts can tell you interest or demand for whatever you want to measure too. Also you can use good old journalism from newsrooms and media houses.

Paolo Villacarlos (Product Manager at Cashrewards, ex- Klarna)

• Data.ai (formerly App Annie) is great for gathering app usage analytics. You can build a list of competitors along with your own app for easy comparisons over time. Just create a group of apps that includes your app and any relevant competitors, then feast on the multitude of acquisition, engagement, and retention data they have available. Sensor Tower is another vendor that provides some great mobile app store analytics.
  
• A great way to gather industry/market news is Google Alerts with RSS Slack integration that feeds into a dedicated Slack channel for competitor news. I have been alerted to the press releases of more than a handful of new features and other competitor milestones quickly through this aggregator. With a feed that tracks your market, e.g. BNPL (Buy Now Pay Later), you will get a sense for how your space is evolving over time.

SEO tools like SEMrush and Ahrefs are another useful way to get insights about you versus competitors. You can use their keyword analysis tools to get a sense of how your competitors are structuring their websites to communicate value to their target market. You may even be able to get an idea for what specific pages on a competitor’s site are the most engaging, and you can use this to ensure that your product is able to address those customer concerns as well.

Q: How do you validate your findings on competitors and the market?

Once the data is analyzed, product managers need to make sure the results are valid and will lead the product down the right path. Using a variety of data sources and comparing the results is one way to ensure results are correct. Analyst reports from firms like Forrester, Gartner, and IDC can also help to confirm the findings.

After data sources are compared, product managers may need to create some data of their own. Performing product research to get user feedback is a powerful way to not only validate results, but also get deeper insights. Working with product research or UX teams, running surveys, and holding user interviews are good ways to do this. Be clear about the results to be validated and how you define success because the best course of action from the results will depend on the organization.

One important aspect to note as you confirm your findings is to make sure there is diversity in audiences, consulting companies, and analyst organizations. If you are only speaking to one segment, you may miss out on important trends and factors that can help your product to succeed.

Alvaro Mattos (Principal Product Manager at Eventbrite)

I always work with the product research and UX designer teams to validate our findings through quick feedback loops. For market trends we always run surveys or interviews with the objective of gauging the importance of the trend. Ideally you want to walk out of this process with a clear timeline on when to start investing in the trend. 

Francesco Corti (Senior Product Manager at Spotify)

I usually try to see if there are discrepancies or contradictions in the data, asking for evidence or justifications from the creators of the research. Something that I have done is to interview some of the customers in my network to confirm the findings. For example I may interview someone about the reasons for choosing our product compared with the competition. I think that failing fast on the assumptions based on the data is better than spending too much time proving that data is good.

Anjana Kambhampati (Sr. Product Manager – Growth and Strategy (XaaS) at Cisco)

When we review analyst reports (e.g. Gartner, Forrester, Canalys, etc.) we like to get the data sets to compare and understand if the trends and conclusions from the data are similar. We then validate by running our own survey with similar parameters.

In Cisco-owned surveys we take a similar approach. By identifying diverse audiences and sometimes diverse consulting organizations we make sure that we are not being misled. As we are very close to our customers and partners, we understand the pulse of the industry. It is very easy to spot data sets which do not pass the sniff test.

Tolu Arogunmati (Product Manager at Meta)

Each data point represents something, someone, or a pulse on performance. You can review how the data was collected. You can challenge what the data tells you. You can change your perspective on what the data isn’t telling you. You can also put in a countermeasure for your data point.

In sports you can see what the data tells you about a player and a team. You can watch the same team without the data and see what your eyes tell you. It really depends on what you are looking to understand and ensuring that you know how the data is collected and what it means. So I say, do your data tests then run whatever eye test or sanity check.

If we bring this back to the product, is iMessage the best messaging platform for iPhone users because it is on every Apple device? Is WhatsApp the best since it is the most popular in the world? The definition of best in your framework will guide you. 

Paolo Villacarlos (Product Manager at Cashrewards, ex- Klarna)

Formulate a hypothesis based on your own analysis of the competitive experience. Structure a user test or battery of interviews with users, segmenting for users of the product, the competitor product, and users of both. Be amazed at the insights! 

For example, when a recent new entrant to the affiliate marketing space emerged, we saw through App Annie (now data.ai) very high installation numbers in their first month, despite not seeing a strong marketing push. After mapping out all of the screens of their onboarding flow, we had a few hypotheses about what might be powering the adoption and engagement around referrals. We structured a set of user interviews using that product, our own, and another competitor as three options for interviewees to examine and evaluate, sharing with us what resonated about each product for them. From that, we found that the competitor’s branding and usability were strengths in the consumers’ eyes.

To validate broader market-wide insights, I like to conduct surveys and interviews with segmentation based on users vs. non-users. This helps me understand the needs of folks that are warm to the space and have a more nuanced view of the various product offerings. But thanks to the Google Alerts updates I get regularly, I know that outside of the core user base exists a larger market of folks that are not yet adopters of BNPL (buy now, pay later) as part of their shopping behaviour. Their needs differ greatly, which presents a great opportunity to grow in new markets. One thing that comes up often in the media, and is corroborated by user interviews, are concerns about security. People want to know that their sensitive information will be safe, and they aren’t sure if they can trust new entrants in the payment space. This insight helps drive future product discovery around ways to increase feeling of security while using the product.

Q: What are some examples of understanding the competition and market that have led to positive changes for your product?

Our experts have had compelling experiences that have occurred because they understood competition and the market. It’s important to understand the context of how customers use your product. Seeing for yourself a customer using your product and your competitors’ in their own environment can show you areas for innovation you may otherwise miss. 

Deeply understanding competitive pricing in a given market can also lead to positive updates to your product. If your competitors’ prices are way less, they have more pricing options to fit a wide variety of customers, or their pricing model fits better with how your customers want to buy, knowing this information can help your product improve its pricing model to better compete. In one example below, addressing customer requests to be able to try the product before buying led to an entirely new version of the product that opened up an untapped SMB market.

Being on top of trends lets you capitalize on them. If you know that customers are unhappy with a competitor’s product, and the reasons why, you can take advantage of this situation. Consider marketing campaigns that highlight your product’s strengths against competitors’ weaknesses as well as easy migration paths so customers can move effortlessly from a competitor’s product to yours. 

Alvaro Mattos (Principal Product Manager at Eventbrite)

I always look for qualitative and quantitative data, but anecdotes can help find differentiation with your competitors. In my first role as a product manager I was in charge of the development of a telephony solution for fishing vessels. Two of the key data points that made fishermen choose our solution were its robustness and dimensions that made it very easy to fit in any vessel. If I hadn’t visited any vessel I wouldn’t have realized the lack of space in fishing vessels.

Anjana Kambhampati (Sr. Product Manager – Growth and Strategy (XaaS) at Cisco)

For one of our security portfolio products we have been struggling in SMB space. Though the product had better features than our competition, it was hard to make inroads into the SMB segment due to pricing. We looked at competitive pricing and then ran multiple interviews with partners and customers to understand how to change the pricing and packaging of the product to be SMB friendly. We had to run several trials and get iterative feedback to make the product successful in the SMB space.

Tolu Arogunmati (Product Manager at Meta)

At a point in my time at IBM, I was working on a FPA (Financial Planning and Analysis) solution we had. We had analyst reports on all the competitors including us in the space. A comment across the reports talked about the opportunity to try before buying for small to mid-market enterprise customers. This was something we lacked in our offering for decades as the buying process had typically been a custom demo by partners and IBM sales. Trials are not as common as you’d find in retail or consumer software. It’s also not in line with how we were set up as an organization either. So we started the initiative to explore and ultimately build out a condensed cloud based version of the solution available to try at no cost for 30 days. It is still available today for anyone to try.

Interestingly, it led us down the path of introducing a lightweight product that could also serve customers who did not need the lift to the full scale enterprise product. Next thing we know, we had a low cost, quick to start, self-service, compelling cloud offering that could serve an entirely new base we had previously ignored. 

Francesco Corti (Senior product manager at Spotify)

I remember when data was showing a significant churn rate of the market leader in favor of the most modern solutions in the market (at that time we were positioned as the most growing and modern product in the market). This was the origin of an initiative to create easier migration paths to our product as well as a dedicated marketing campaign to consider our product as a valid alternative to the leader.

Paolo Villacarlos (Product Manager at Cashrewards, ex- Klarna)

One thing I like to do is familiarize myself with the full product experience of our competitors by building a map of all the interactions. By comparing the key flows of each of our competitors against our own key flows, it becomes much easier to spot the UX patterns. More importantly, it becomes easy to see where our product may fall short of consumer expectations. Here’s a hypothetical example. If other players in the market onboard customer information in a particular format, say first, middle, last name and our product uses a different format, it might be worth investigating whether this design decision is impacting our signup rates relative to our competitors. We might find that something so seemingly innocuous as a set of name fields might introduce a non-obvious usability gap for our users. The visual map paired with data and insights has helped prioritise numerous product improvements!

We’d like to thank Stephanie Walter for incredible help in creating this article.