You’ve probably heard of conducting a competitive analysis for a business idea, but did you know you can do the same thing for product features? This process is called a competitive feature market analysis, and it can be a powerful strategic tool in Product Managers’ neverending quest to prioritize. Whether you’re creating an MVP or scaling a more complex product, you can use a competitive feature market analysis to know which features to focus on.
What is a Competitive Feature Market Analysis?
In short: conducting a competitive feature market analysis means checking out what features your competitors’ products have and how they market the product overall. This analysis helps you build your own product by helping you find clarity on which features will or won’t work, new opportunities that your competitors don’t cover, and baseline features that you must have.
In a competitive feature market analysis, you first identify and then analyze features of products that compete with yours to 1) determine the value of your competition’s features and 2) find opportunities for differentiation.
Why Conduct a Competitive Feature Market Analysis?
If you compete in a space without conducting a feature market analysis, you’re more likely to make easily avoidable mistakes or even create a product that’s the same as a competitor’s. And, why do the work from scratch of researching customer needs and validating your product idea when your competitor has already created the perfect case study to look at?
Knowing the why behind a feature will help your product at every step. Not only will it keep you grounded during development, but your sales and marketing team will find it easier to promote a product backed with market research and a clear differentiating feature. Whatever features you introduce, understand the rationale behind including it, and how it compares to that of your competitors.
And a bonus: identifying your strengths and weaknesses before you build your product will not only make your product stronger, but it will also make for more effective sales and marketing messaging.
When considering how to differentiate your product, consider that differentiation can mean anything from improving upon baseline features that exist within your competitors’ products to coming up with a new feature that meets underserved needs.
And not all features have to differentiate! Doing a competitive analysis can also help you establish a baseline (e.g. to be successful with this kind of project, we need to include X, Y, and Z features). If you can improve upon or tweak these features to differentiate yourself, great! But some features may very well fall into the “if it isn’t broken, don’t fix it” classification. These baseline features can instead serve as a solid foundation of the product so you can focus your energies on other differentiating features.
An example of a strong differentiating feature is the case of Google Local Guides vs Yelp. They both have a “request a review feature,” where they send a push notification to encourages users to leave a business review. Although the calls to action from Google and Yelp are the same, Google wins this feature battle in a landslide. Why? Because Google provides a more seamless user experience.
The Yelp push notification is triggered by an active action—the user has to “check-in” on the Yelp app, and this action triggers the “How was business X?” prompt. Google’s push notification, on the other hand, is triggered by a passive action because it’s based on GPS coordinates. If Google sees that you’ve searched a business, and your GPS activity subsequently shows you’ve been at that location, it automatically sends a “How was business X” prompt.
Removing the added “check-in” step is Google’s competitive advantage, and one that is hard to replicate. In this instance, Google Local Guides got its feature competitive advantage from an overall competitive advantage of its company. This is a good lesson as well: you don’t always have to start from zero when building differentiated features. Look at what already sets you apart as a company and see if there’s any way to integrate that pre-existing differentiation into new features.
How to do a competitive feature market analysis
To do a competitive feature market analysis, start by making a list of 3-5 direct competitors. Choose companies that already offer a similar product for a similar target user.
The information you pay attention to will differ depending on the product and the market, so make sure to keep user needs, market feasibility, and business goals in mind when establishing comparative categories.
You can do two types of analyses: an overall feature analysis, or an individual feature analysis. In the overall feature analysis, you’re trying to get a feel of marketing strategies, what features are included or not, and how they work. In an individual feature analysis, you’re doing a deep dive into a feature you know you want to develop, and figuring out the minutiae of how you’re going to do that based on what your competitors have done.
Overall Feature Analysis
As an example, let’s imagine you’re a Product Manager for a navigation/mapping platform.
Step 1: Identify your 3-5 competitors. When developing a navigation/mapping platform, your list of main competitors might include Google Maps (which is now owned by Google), Waze, and Apple Maps.
Step 2: Test your competitor’s features. Download or sign up for a free trial of your competitor’s product.
Step 3: Create a matrix with the competitors across the first row and the comparative factors you’re examining in the first column.
Step 4: Next, examine their marketing strategy. What’s their message? What do they think their competitive advantage is? Who is their target audience based on their tone of voice, medium, and imagery? Enter your findings into the matrix.
Step 5: And of course, look at the features. How do your features compare? In which areas do you have the advantage or disadvantage? Is there something your feature is missing that’s important or delightful that you can add in? Enter these observations into the matrix as well.
Marketing can give clues as to what features your competitors value in their own products. Even though Google owns both Google Maps and Waze, it markets them differently. It markets Google Maps with phrases like “discover the world,” promising not just a product, but an experience, and promotes features that let you visualize the map in exciting new ways.
In contrast, Waze marketing highlights that the app is “community-based” and highlights the collaborative features. Though the functionality of the apps is similar, the target customer is different. Based on this knowledge, you can design and market your product to cover a different target customer, or find gaps in their features that you can fill.
A final tip is to set up a Google alert on your competitors. Keeping tabs on their product launches, acquisitions, funding, and overall news, will keep you updated on what they’re developing and how the market for your product might change in the future.
Individual Feature Analysis
Let’s take a look at a single feature to demonstrate how you can break down competitor products feature by feature. For the navigation/mapping platform example, let’s focus on the feature that allows users to submit incidents on the road (road closures, accidents, police, etc.)
Step 1: Test your competitor’s feature. Download or sign up for a free trial of your competitor’s product.
Step 2: Use the feature and notice how it operates. For incident reporting, this includes how you display the incident to the user, the options of incidents that can be reported, and the mechanisms of how users submit incidents they encounter.
Step 3 (optional): Create a screen recording of how you test the feature and append it to your analysis for future reference.
Step 4: Create a matrix to compare and contrast the functionalities of this feature amongst your competitors.
Step 5 (optional): Give the feature a rating out of 5 to assess how useful it will be to end-users
Now let’s imagine you start analyzing a proposed feature and you notice your competitors don’t have it. If you have a proposed feature your competitors haven’t included in their products, pay attention. You may have just stumbled upon an untapped segment of the market! Alternatively, your competitors may have found a workaround solution that allows them to accomplish the same task.
And in the worst-case scenario, your competitors may have considered this feature initially, just like you, but stayed away from it because their research showed low customer demand or unsustainable ROI. Ask yourself: Is it a necessary or value-adding feature? Is the workaround my competitors use more effective? Which new or underserved customer segment will I be targeting with this feature?
What insights can you extract from a competitive market analysis?
Now that you’ve done the analysis, it’s time to put your findings to good use.
For the product team:
Start with product. Share your analysis with your team and from there decide which feature components to build. Not every feature that your competitors have will be necessary for your product, so resist the temptation to include a feature just because a competitor product has it. Anchor everything in the needs of your users, and remember that those may vary from the needs of your competitors’ users.
If during the analysis you identified a feature that will serve as the key selling point or differentiator of your product, put your focus there. Building out and investing in that feature will make your differentiation that much stronger.
For sales and marketing:
Once you understand which features you’re prioritizing and why, communicate this to your sales and marketing team. Let them know how your product is different from the competitor’s and give them a short sales document elaborating the findings of your analysis.
Especially make sure to communicate the weak links in your competitors’ products, as well as your products’ strengths, so your sales team can have an informed conversation with customers who are choosing between your product and a competitors’.
Share your findings regarding marketing communications with your marketing team. Equip them with knowledge about the competitor strategies so their message is clear and as differentiated from the competitors’ as your product is. Let them know how your offering is different on both the feature and the product level, so they can communicate the advantages of your product overall and on a granular level.
Where Can You Find It?
You’re ready to get down to business and find out what your competitors are up to in their product features. Scroll down to see our templates on competitive feature market analysis.
On Google Drive
This one is for the Product Managers who want something straightforward and easy to use. Observe your competitors’ products and enter your findings into Google Sheets.
Notion is an all-in-one workspace where you can create anything from a to-do list, to a product roadmap, to a Competitive Feature Market Analysis.
Use Coda to build docs for teams that bring together words and data. It’s a different way to organize and collaborate. Try it out!
MURAL’s collaborative online whiteboards are a great way to visualize your Feature Market Analysis.
Need More Templates?
Still looking for some great templates? Check out our collection:
Product Templates: Feature ROI Calculator
Product Templates: Porter’s Value Chain
Product Templates: Business Model Canvas
Product Templates: Product Comparison