Before understanding why you should pay attention to indirect competitors, you have to understand who they are. Indirect competitors exist within your industry, sell to your target audience, but don’t sell the same product or service that you do.

So, why do they matter? Let’s find out!

Why You Should Pay Attention to Indirect Competitors: Key Takeaways

  1. Audience Insights: Indirect competitors offer a unique lens through which you can view and understand your shared target audience’s needs, preferences, and concerns.
  2. Marketing Inspiration: Observing how indirect competitors reach out to the audience can spark innovative marketing ideas and channels for your brand.
  3. Potential Partnerships: Collaborating with indirect competitors can open up new promotional opportunities, attracting customers who might not have considered your product otherwise.
  4. New Market Discovery: Indirect competitors might be engaging with customer segments you haven’t considered, highlighting potential new markets for your business.
  5. Product Development: Understanding the broader needs of your shared audience can inspire new product developments or enhancements, ensuring your offerings remain relevant and desirable.

5 Reasons Why Indirect Competitors Matter

Understanding your indirect competitors—those who cater to your target audience but offer different products or services—is crucial in today’s competitive landscape.

While they might not be offering the same product or service as you, their strategies, audience engagement, and market approach can provide valuable insights.

Let’s explore the five reasons why paying close attention to the indirect competitors is not just beneficial but necessary for staying ahead in your industry.

1. They help you understand your udience

Because they sell a different product than you do, but to the same audience, looking at who your indirect competitors are will help you get a better understand of who your customers are.

For example: if you sell curling or straightening irons, you may want to look at indirect competitors who sell hair care products. Talk to your beauty supply distributor about these indirect competitors to determine what hair concerns your customer has.

Are they looking for moisturizing shampoos and conditioners? Products that will tame frizz? Whatever it is, this insight is valuable and will help your brand stay in touch with what customers want.

2. They can give you new marketing ideas

How are your indirect competitors marketing to your audience?

Perhaps they’re using social media influencers or another channel that your brand has not ventured into yet. Take a cue from these indirect competitors and try to reach your audience through these channels, too.

If the indirect competitor is a larger brand, they most likely have research that points them in the direction of whatever channel they’re choosing, so it should be a somewhat safe bet.

3. They may partner with you

Sometimes, indirect competitors make the best partners.

Take a look at the beauty example that was previously mentioned. If a hair care brand partners with a curling iron or straightening iron brand to offer joint discounts or promotions, they may be able to attract consumers who would otherwise not be interested.

Beauty supply distributors can merchandise these items together and create unique displays to attract customers and show the new partnership. Other marketing channels should also highlight the new venture.

Customers who only buy the hair care may be tempted to try out the straightening or curling iron and vice versa.

4. They can help you discover new markets

Although indirect competitors are selling to the same audience that you are, they may also be selling to other groups that don’t overlap with your customer base.

Maybe your straightening or curling iron business has focused solely on younger women, however you realize by looking at your indirect competitor that older women are a large, untapped market that you could target with a little repositioning.

It might be helpful to look at multiple indirect competitors and figure out what groups are buying from all of your competitors. These consumers will be more likely to invest in trying your product as well.

For example: a customer who is only buying shampoo and conditioner may be less likely to buy a curling iron than one who is purchasing shampoo, conditioner, hair spray, and mousse. Obviously, the latter customer is more invested in his or her hair care and willing to try new items.

5. Product development insights from indirect competitors

Understanding indirect competitors is a goldmine for product development.

These competitors, while not offering the same product or service, cater to the same audience and can reveal unmet needs or desires within your shared market.

By observing and analyzing the offerings of these indirect competitors, businesses can identify gaps in their own product lineup and uncover opportunities for innovation or improvement.

For instance, if you notice a trend among your indirect competitors towards eco-friendly or sustainable products, this could indicate a growing preference within your shared audience for more environmentally conscious options.

This insight allows you to consider how your product can be adapted or what new products can be developed to meet this emerging demand.

Moreover, indirect competitors can inspire features or benefits that you may not have considered.

If your product development has been focused on functionality, but indirect competitors are successfully marketing lifestyle benefits, this could signal an opportunity to explore how your products can enrich the lives of your customers beyond their primary function.

How do you stay on top of your indirect competitors? Tell us in the comments below!

Conclusion: Why You Should Pay Attention to Indirect Competitors

Monitoring indirect competitors is not just about keeping tabs on other businesses; it’s a strategic approach to understanding the market, discovering untapped opportunities, and enhancing your marketing and product development strategies.

By leveraging the insights gained from these competitors, you can better serve your existing audience, explore new markets, and even forge beneficial partnerships.

In the fast-paced business environment, those who look beyond direct competition and learn from the broader industry landscape position themselves for growth and continued relevance in their market.