The difference between direct and indirect competition
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Let me tell you about my favourite radio ad.
It opens with the "rrrrrrrrrrrrrrrrgnh" of a chainsaw. Then silence. Then a voice comes in, asking "do you want this to be the last thing you hear?"
The ad is for an arborist company. The message is pretty clear: don't chop down trees yourself like an amateur. It's dangerous work. Outsource it to a professional.
I like it because it's such a great example of positioning against indirect competition: the alternatives that people could use to solve the problem your product solves, without using your product or a product in your space.
Rather than talk about how much better/cheaper/faster than other arborists they are, this outfit talks about the benefits of hiring an arborist in general - rather than doing it yourself.
The arborist radio ad is notable because it's so rare. When I take on a new client, I'll ask about direct and indirect competition. I'll usually get long responses, backed up by lots of documentation, about direct competition. But when it comes to indirect competition - nothing.
Here's why indirect competition matters - and why you should be thinking about it.
It's an enormous market
You can roughly divide people who have problem trees into two groups: people who hire arborists, and people who have (or hire) chainsaws.
That second group is way bigger than the first one. What's more, people in the habit of hiring aborists are probably pretty happy with the arborist they use. It's going to be hard work to convince them without competing on price.
But the chainsaw-wielding homeowners are a much larger group. And that large group represents opportunity.
The same goes for any other product or service. The group of people who would benefit from working with you, but don't currently work with anyone in your category, is almost always much larger than the group of people who do work with companies in your category.
That's a huge advantage of positioning yourself against indirect competition. It's often a much larger pool of potential customers.
You can compete on different dimensions
Going head-to-head against a not-very-different competitor for the same pool of customers is hard. You can compete on price, but that turns into a race to the bottom. You can compete on features, but features can be copied pretty easily. You can just brute force your way into being top of mind (ever get a Monday.com ad on a Youtube video?), but that costs an arm and a leg.
Positioning yourself against indirect competitors avoids these problems because it starts a different conversation. The advantage of software company A compared to software company B may be marginal at best - but the advantages of compared to spreadsheets can be huge.
When you do this, you may be able to get people across the line without having them look at your direct competitors at all.
If they have a painful problem, which you articulate and provide a solution for, then it's a no-brainer to just work with you to solve it.
This is compounded by the fact that the market is so much bigger - like we talked about in the last section.
But it comes with some big tradeoffs
There's a big tradeoff here though: you need to really nail your pitch to these people, and this can be tricky because they're not the same as the people choosing between you and your competitors.
People who are using a direct competitor are already in market. They have the problem you solve, and they've already made the decision to use a product like yours to solve it. They're also familiar with the basics of your industry - after all, they've been using a product very similar to yours for awhile.
People using indirect competitors have none of these foundations. They need to be educated about the fact that a solution exists. You need to explain how it works. You need to justify the expense against often-hard-to-quantify expenses of using an indirect competitor.
Not only can this be tricky, it can also take way longer than selling to someone who is actively looking to work with you or one of your competitors.
But if you get it right, there are huge upsides. You just have to be patient, and have a deep understanding of what types of problems your customers need to solve - and how your solution stacks up against whatever it is they're using at the moment.
Have a look at your own website. Is there room for a landing page comparing your solution to indirect competitors? Whip one up and drive some traffic to it - let me know how you get on.
Have a great week.
Sam
PS: As usual - home page reviews going for $799. Book yours now. I can have feedback for you in 7 days.
PPS: Have putting together a cold email system lately. Same way I do anything - brute-force trial and error. Have been writing a few Linkedin posts on the topic along the way if you're interested. Here's one on the evolution of the template I'm using, one with thoughts on how many emails I can do a day (not many) and another crowing about the software I discovered that lets me get through way more, faster.
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