Indirect Competition: Understanding your true rivals in a crowded marketplace
Your biggest competitor may not even be in your industry – and ignoring them could be costing you more than you realise.
The ‘What'
Harley-Davidson's biggest competitor isn't Yamaha; it's a conservatory.
When a prospective Harley customer walks out of one of their dealerships with the decision to buy a conservatory, the question that needs to be answered is ‘What are we truly competing with?’
In Harley's case, this wasn’t a fight with the likes of Yamaha and Honda for the best motorcycle; It was a fight for discretionary spending decisions.
When analysing competition, brands tend to concentrate on direct rivals that offer similar products or services. However, it can pay to broaden this perspective and acknowledge that competition can come beyond these familiar brands.
Your true competitors are not necessarily brands that look and sound like you, but anything that people might decide to buy instead of you. This can also be applied to the current state of social media. In the attention economy, brands aren’t just fighting for money, but also for views, likes and clicks - and they’re competing against everyone who wants their consumer’s attention.
It's also important to recognise that competition is not limited to brands or products; it can include non-brand solutions too. For example, while Uber Eats competes with Just Eat, it also competes with the decision to cook dinner at home. While cooking at home might not resemble a food delivery app, both options fulfil the same need: satisfying hunger. This is an example of indirect competition, where the alternatives serve the same need but don’t necessarily compete in the same category or look the same.
Customers make purchasing decisions based on motivations and values, which can shape their choices. By understanding the motivations and values that drive your audience, you can identify the needs your brand fulfils—often multiple needs across various segments. Once brands have a clear picture of their target consumers’ needs, they can position themselves more effectively and highlight their relative advantages compared to their direct and indirect competitors.
The ‘Why’
Broadens Your Understanding of the Competitive Landscape
Focusing solely on direct competition limits your thinking and leaves blind spots in your strategy. By acknowledging indirect competition, you can:
Identify alternative solutions that your audience considers.
Highlight your unique advantages relative to those indirect competitors.
For example, a budget airline like Ryanair competes with other airlines and non-airline options like long-distance bus services such as Stagecoach. Both meet the need for affordable travel, but their offerings are very different.
Deepens Customer Understanding
Identifying indirect competition helps you better understand your audience’s habits, values, and motivations. This can help you:
Strengthen customer relationships by addressing their broader needs.
Build a sense of community around shared values.
A strong community should act as a mirror, reflecting customers’ interests and needs. For example, a fitness app might recognise that its customers value accountability and convenience, enabling it to communicate the relative advantage they have over gym memberships or run clubs.
Identifies Hidden Threats
Overlooking indirect competitors can leave businesses open to disruption from alternative solutions outside their direct market. By mapping the broader landscape of alternatives, you can:
Anticipate shifts in customer preferences.
Respond proactively to new challenges.
For example, movie theatres that failed to recognise streaming services as competition struggled to adapt when audiences began prioritising at-home viewing over ticketed experiences.
The ‘HOW’
Understanding indirect competition is only valuable if you know how to apply it effectively. To stay ahead in a competitive landscape, brands must go beyond identifying who their rivals are. They need to look into why their audience might choose alternative solutions and what relative advantages they have over them. By analysing customer motivations and mapping their unique relative advantage, businesses can uncover hidden opportunities, anticipate challenges, and communicate their value in a way that resonates.
Identify Customer Motivations:
Segment your audience by their core needs and desires.
Ask: "What is the underlying problem they are trying to solve or the aspiration they want to fulfil?"
Map Alternatives:
List alternative products, services, or non-brand solutions that customers might choose instead of yours.
Consider options/different solutions in relation to the needs that your brand/product/service meets.
Evaluate Relative Advantages:
Compare your product or service to indirect competitors on key attributes and then highlight the unique advantage or superior value your brand offers.
Craft Key Messaging and Content:
Develop messaging that highlights your brand’s unique advantages and resonates with your audience’s motivations.
How does this affect what Brands do on social media?
A deep understanding of indirect competition influences your overall strategy and directly impacts how you approach social media. Whether through organic content or paid campaigns, identifying and addressing the broader needs of your audience is one of the key ways to stay relevant and hold a clear point of differentiation with your customers.
Highlight Audience Needs
Use your content to showcase how your brand meets the broader needs of your audience within that indirect market. By creating content that also speaks to the indirect motivations and values of your audience, you attract attention, generate awareness and allow for deeper connections by providing a solution to their need.
Emphasise Unique Positioning
Social media is an excellent platform for educating your audience on the relative advantages that your brand offers compared to direct and indirect competitors. The key is to create engaging content that communicates how your brand helps solve their problem or need in a way that is superior to your competition.
Shape Perceptions as Reality
As stated in Al Ries and Jack Trout’s classic book, The 22 Immutable Laws of Marketing: "Marketing is not a battle of products; it's a battle of perceptions." Social media allows you to influence these perceptions consistently by showcasing why your brand is the best fit for your audience's needs. In doing so, you position your offering as the obvious solution – even in indirect markets.
Indirect competition goes beyond brands that look like yours – it includes any alternative option that meets your audience’s needs. By understanding customer motivations, mapping alternatives, and highlighting your unique relative advantages, you can position your brand as the best solution in both direct and indirect markets. This approach not only helps you stay ahead of hidden competitors but also deepens customer connections and drives long-term growth.
At Bumbl we specialise in turning strategy into reality. Contact us to find out more about how Bumbl can support your commercial goals.
