“Keeping up with the Joneses” is more than an old-fashioned suburban idiom; it’s a solid business strategy.

By following what your competition does—successful campaigns, marketing strategies, etc.—you can put together your own roadmap to success and find ways to be distinctive.

The obvious approach is to follow your direct competitors. You’re competing with them for market share, addressing the same audience, and essentially putting out the same products. 

But if you’re looking to stand out, you should watch your indirect competitors, too.

What Is Direct and Indirect Competition? 

Direct and indirect competition make up two halves of your intelligence reporting. They paint a complete picture of your market landscape by showing you the seen and unseen motivations of your customers.

Direct Competition

A direct competitor is a business that offers similar products or services as you within the same market. For example, Nike and Adidas are classic direct competitors. They serve the same market. When a buyer is looking for an athletic shoe, they will choose between one of these two companies. 

They also offer products at similar price points and of similar quality. A price increase by one may drive consumers to the other, and any market trends may affect both of them.

Direct competitors are easy to track, and you usually know exactly who they are. You may follow their press releases, and social media channels, and frequent their online and physical stores. 

You can learn a lot about your market by following your competitors, including:

• What kinds of features and products are in demand?
• Is a consolidation happening? Are competitors merging or acquiring companies?
• How are customers interacting with companies and brands?

But if you want a wide-view lens of the market, you also need to check out your indirect competitors.

Indirect Competition

Indirect competitors provide offers and products to similar markets as yours but do not compete directly for market share. 

Continuing with the shoe example, an indirect competitor to Nike would be Jimmy Choo or Steve Madden. They all sell shoes to people who need footwear, but the customer demographics are different. 

Indirect competitors sell the same solution as you do, but differently.

Examples of Indirect Competitors  

To make sure you understand who your indirect competitors are—and how to find your own indirect competitors—here are a few more scenarios. In each case, the products may be very different, but they satisfy a similar need or target a similar audience

Getting Fit

Your local gym and that app on your phone are indirect competitors. Both help people achieve fitness goals, but while the gym offers equipment and in-person classes, the app might offer on-demand video classes, diet tracking, or online fitness challenges. People may in fact use one or more apps AND go to the gym.

Satisfying That Sweet Tooth

Right outside the local movie theater, you’ll find a chocolate shop and an ice cream shop. They are indirect competitors because they both service buyers who need a sweet treat. 

If the chocolate shop raises their prices or has a supplier issue, it probably won’t affect the ice cream shop. 

People may choose ice cream over chocolate as a simple matter of personal preference. But each business should do all they can to make their storefront and products look more appealing than the other. 

Staying Dry

It’s a rainy day and you’re heading out the door. Do you pick up your umbrella, a hat, or your raincoat? While all very different, there are many ways to meet your current need to stay dry. If you sell hats while someone else sells raincoats and umbrellas, your accessories store is suddenly in indirect competition with the department store down the block.  

Reading a Good Book

Bookstores and e-readers like Amazon’s Kindle may offer the very same books to eager readers. But the brick-and-mortar store caters to those who like to browse the shelves and then hold a book in their hands, drinking in that sweet, new-book smell. E-readers serve those who prefer a digital experience they have in their pockets at all times. 

What Can You Learn from Indirect Competitors?

Indirect competitors push you to think outside the box and take a look at the entire market, not just the segment you serve. 

Here are a few benefits you can gain from tracking indirect competition:

• Find inspiration. Look at the messaging, keywords, backlinking strategy, reviews (and keywords used by their customers) for your indirect competitors. There’s a wealth of ideas you can pull from to expand your product reach. For example, they may have a more active social media presence than you or your direct competitors. Why is it successful, and can you recreate what’s working for them?
• Create differentiation. If you can incorporate one or several ideas discovered during your indirect competitor analysis, you’ll differentiate yourself from your direct competitors. Suddenly, you’re not just keeping up; you’re innovating and improving to create something completely new. 
• Mitigate risks. Indirect competitors can become direct competitors while you’re not paying attention! Early awareness allows you to prepare and adapt.
• Collaboration and partnership opportunities. You know that saying, “Keep your friends close, and your enemies closer”? Sometimes, indirect competitors can turn into partners. By understanding their products, values, and customer base, you might identify opportunities to collaborate.
• Regulatory and compliance awareness. Keeping an eye on how indirect competitors navigate legal and compliance issues can offer insights and best practices you can use.

How To Track Indirect Competitors

Tracking your competitors often means watching their social media pages and updates, website changes, press releases, hiring trends, and more (read about the best sources to start with). You have a few options for gathering info:

• Manually. You could personally do the research, scanning a competitor’s online presence regularly. You can also implement some simple automations with Google Alerts and PR Newswire alerts for your industry. This is time-consuming, and the manual nature of the collection can make it a challenge to share insights with your teams.
• Using competitive intelligence automation. Kompyte scans hundreds of millions of data sources daily, looking for updates to your competitors’ online properties. It then filters out the noise, making it easy for you to find just what you need to keep on top of all your competitors (direct and indirect) in about an hour per week. 

Next Steps for Analyzing and Tracking Your Indirect Competitors

By now, the value of expanding your competitive analysis to include indirect competition is clear.  Widening your peripheral vision can inspire and empower you to make data-driven business and marketing decisions. 

So, if you’re ready to track your indirect competitors, what should you do next?

1. Identify your indirect competitors
   Do a keyword search using keywords related to the common need you fulfill. Remember, you’re looking for companies with an alternative solution to the consumer problem you’re also solving, even if the solution is very different from yours. The amount of time you have to analyze and track competitors will influence how many you ultimately choose to watch.

2. Determine what you’ll track

What you track depends on what you want to learn! If you’re mainly interested in product updates, track those pages. If investor and financial information is important, track that. Unlike with your direct competitors, you probably won’t want to track everything. Still, when you are in the “analysis” stage, look more broadly at their online properties to see what you can learn. Then narrow down your data sources for ongoing tracking.

Whether you use a simple spreadsheet or employ competitive intelligence automation, you’ll want to establish the following:

• • • Who'll perform the initial analysis
    • Where you’ll keep competitor insights
    • Who's responsible for updating and distributing findings
    • How often you’ll update insights and reports
    • How you'll share them with the relevant teams

Kompyte has a built-in Collect Feed feature that gathers news updates and even web changes of all your competitors. Simply enter which companies you want to keep an eye on and Kompyte will do the rest. You can even designate certain competitors as “indirect” and filter them out of the default view, only reviewing their updates when it’s time.

Unlock the full potential of your competitive intelligence by streamlining your tracking and analysis. Schedule a demonstration of Kompyte today to turn your peripheral vision into your newest superpower.