Guide 17 · Strategy & Customers

Who Is Your Real Competitor?

Your practical competitor is an alternative the customer can use to achieve the relevant outcome. It may be another supplier, internal work, a spreadsheet or deciding not to act. Start with the customer's decision, not only a list of companies in your category.

By How Businesses Win · Published · 4 min read

Two products can look similar and serve different jobs. Two very different solutions can compete for the same budget, time or result.

Follow one fictional buying decision

A small manufacturer wants managers to understand weekly defects before Monday's meeting. A vendor offers a reporting service. The customer can also ask an employee to prepare the report, export data into a spreadsheet, buy software or keep using the incomplete report it already has.

Alternative Potential attraction Cost or trade-off to investigate
External reporting service Less internal preparation Price, data access and coordination
Internal employee Business context and control Staff time and competing work
Software tool Repeatable processing Setup, learning and data quality
Existing spreadsheet Familiar and inexpensive to begin Manual effort and error handling
Do nothing No new implementation Continued uncertainty in the meeting

The table is a fictional hypothesis map. It does not establish which alternative actually wins or how much each is worth.

Ask what changes at the moment of choice

A manager may not care about owning a reporting tool. They may care about getting reliable information before a deadline. If so, the comparison should include preparation time, completeness, timeliness and the effort needed to resolve exceptions.

Ask recent buyers what they seriously considered. Ask people who declined what they did instead. A sales team's favorite rival is not necessarily the customer's actual alternative. Keep the interviewer's preferred answer out of the question.

Include the work of changing

A new solution may require data cleanup, staff training, procurement and an internal owner. Those tasks can make an apparently superior product unattractive for a particular customer at a particular time.

Describe switching work concretely. “They are locked in” is less informative than “they must migrate three years of records and retrain two teams.” The size of that work can change as tools, integrations and the customer's priorities change.

Compare a defined segment

A five-person company may have a different alternative from a large organization with an internal analytics team. Segment by the customer's job, constraints and available resources rather than assuming all companies with the same industry label behave alike.

Write the segment and its likely next-best alternative next to the customer promise. Then check whether your activity choices can deliver a meaningful difference using the five-box map.

Turn the comparison into evidence

Pick one claim your offer makes better: less preparation work, fewer errors or an earlier reliable answer. Decide how it will be observed. Run a bounded comparison where practical and record what changed outside the offer.

For price questions, use the price-test guide. For a new route to buyers, read the distribution-channel guide. The alternative may change across channels as well as customer groups.

Keep a useful competitor record

For each alternative, list the job it serves, the evidence of buyer consideration, the cost of using it and the cost of switching. Mark assumptions separately from observed customer behavior. Update the record when buyers reveal an alternative you missed.

Sources and limits

The SBA's market-research and competitive-analysis guide provides broader research context. The manufacturer, reporting alternatives and investigation steps are original fictional HBW analysis. No market-share, preference or competitor-performance claim is asserted.