Indirect Competitors: Why They Matter and How to Analyze Them to Grow Your Business
The marketing world can be exciting. That is, until it’s not anymore.
Often, that happens when you are stuck in the Red Ocean with way too much competition. Maybe you’re even beginning to drown, and you can’t put your head above the water. Sounds familiar? Trust us — you’re not alone in this.
That’s exactly why we are creating this series on indirect and direct competitors to help you find your way through. A good business should be able to not just survive but also thrive even in crowded, oversaturated environments.
In this particular guide, we help break down everything you need to know about indirect competitors. That includes what they are and how to discover them. Besides, we’ll look into why they’re important and the best ways to handle them.
Contents
- What are indirect competitors?
- Indirect vs. direct competitors
- Indirect competitors examples
- How to identify indirect competitors?
- #1 Use Google (but go beyond your service/product)
- #2 Get the customers' help
- #3 Monitor what people are saying online
- #4 SEO competitor analysis tools help
- #5 Networking works wonders
- 4 best practices for analyzing your indirect competition
- #1 Study where the audience overlaps
- #2 Use automation where possible
- #3 Choose a reliable method for analyzing the data
- #4 Learn (but don’t copy blindly)
- Conclusion
What are indirect competitors?
The indirect competitors’ definition is pretty straightforward. Anyone who is fighting with you for the same customers while selling something different is an indirect competitor.
For example, you can consider LinkedIn vs. Indeed. Of course, LinkedIn is also about networking and communication. But a big part of this social media platform is recruiting. That’s why Indeed is one of their indirect competitors.
Source: LinkedIn
As you can see, indirect competition might not be as obvious as your direct one. But it isn't any less important. In fact, it could be a potential “hidden threat” for your business. Why so?
Well, even though they don’t sell the same stuff you do, they are still offering an alternative solution to the same needs your product/service covers.
And some of those “solutions” might knock you out of business at some point down the line. This is only true if their offering is much more progressive, innovative, and useful.
Even if that’s not the case, they’re still steadily chipping away at your customer base.
If you thought your competition would always be in your face, think again. Sometimes, in the business world, it’s the sneaky ones you have to worry about. But of course, it isn’t just about the sneakiness. In fact, it’s far from that.
Your indirect competition can become a true goldmine for growth — whether it’s increasing your popularity online or boosting sales volume. That’s exactly what we’ll address later on in this guide.
Are indirect competitors important?
Simple answer? Yes, indirect competitors are pretty much a natural part of the business landscape. Knowing exactly who they are and why they’re such a big deal is essential if you want to go far.
Here’s why they’re so important:
- They bring a richer understanding of the market that can help you come up with new strategies.
- They can signal changing market trends or changes in customer behavior that you would have missed otherwise.
- They have the ability to shape the market, especially if they’re introducing something groundbreaking and innovative.
- They can eventually corner your market entirely and replace you with something absolutely new. Sounds too dramatic? Check out what happened with Blockbuster and Netflix.
Clearly, it’s not all gloom and doom. It’s better to look at it from both sides. Apart from worries and potential threats, indirect competitors can also bring interesting opportunities. It’s all about how you choose to look at them and analyze their activity.
A little spoiler alert: Yes, today, we’ll show you how to make the most of your indirect competitors. They might seem like a threat only until you face them and learn from them.
Indirect vs. direct competitors
It isn’t too complicated to differentiate between indirect and direct competitors. Typically, the former isn’t so obvious and could gain a lot of ground before you even notice them (that’s why we have a whole guide about them).
The latter, on the other hand, is usually easily spotted and easier to plan for. Most likely, you know them without any research whatsoever. That’s because they sell the same products or offer the same services to the same customers you are targeting.
A popular example of direct competition is Burger King and McDonald’s. Both of them are big names in the fast-food industry. What’s more? They both have similar offerings that cater to a similar audience.
Source: Startuptalky
Indirect competitors examples
Now is a great time to look at some indirect competitors' examples and see how the idea actually works in real life. Let’s start with the most obvious brands and work our way from there.
Starbucks vs. Jamba (aka Jamba Juice)
At first glance, these two shouldn’t have anything in common, right? Wrong. While they may not be selling the same stuff, they’re both still targeted towards the same customer demographic.
And, even though they’re different drinks, they’re both still filling the same “grab-and-go refreshments” need.
Initially, Jamba offered healthier substitutes like smoothies and juices. On the other hand, Starbucks revolved around coffee-based drinks.
Today, both of them have expanded their menus to include other options. And oh, Jamba now offers coffee, while Starbucks has some smoothies on its menu. See what happens when an indirect competitor eventually goes mainstream? They can morph into a direct competitor!
Sometimes, this kind of competition can build a strong brand reputation that eventually dwarfs yours. It happens even faster when they have a good budget to back up their marketing efforts.
Fighting back, in this case, would require you to be really good at SEO. You would need to invest a lot in guest posting, increase your ad spend, collaborate with some famous people, etc.
Wondering what other Starbucks indirect competitors are out there? The answer is a ton. From local sandwich shops to brands like Folgers that sell packaged coffee. Energy drinks companies like Red Bull, Monster Drinks, etc., could also be a part of this group.
On the other hand, Starbucks is one of Coca-Cola's indirect competitors. Funny how that works, right? Basically, both coffee places and beer or wine companies are all offering alternatives to Coca-Cola.
Electric bicycles vs. electric cars
Source: This bike life
Wondering if there are more examples of indirect competitors? Don’t worry — we've got you covered. Both bicycles and cars are designed to get people from point A to point B.
Yes, the car may be faster. But the humble bicycle offers a more economical and eco-friendly substitute that some people might not be able to resist.
That’s exactly why, when it comes to electric cars vs. e-bicycles, they enter the indirect competition zone. Of course, the price point is normally different, and many will choose based on the price.
But then, there are e-bikes like the guy below at $80,000.
Source: Bless This Stuff
Could it be Tesla’s indirect competitor? Well, seems like that — no matter how crazy that sounds.
Source: Google
Smartphones vs. PCs
Source: Oluboba
Another example of indirect competitors is the smartphone vs. PC. Some people (Hey there, Generation Alpha!) might not believe this, but for a while, the only way to access the internet was through a personal computer.
Not even one of those slim, sleek ones. Nope. Those came later. We are talking about larger, clunky desktops and laptops. Now, it turns into an age test — just one last meme, and then we can continue (sorry, not sorry).
Source: Reddit
Anyway, then came smartphones. They offered a quick and convenient way to do almost everything you could do on a computer. Except now you didn’t have to be tied down to one place in your office or at home.
This accessibility soon became a major appeal. Today, even though the computer is still around, there are more people who simply use their smartphones.
So, if you want a real-life example, pretty much any Samsung laptop can be Apple's indirect competitor if we consider the iPhone. Yet, if we consider a MacBook, it will turn into a direct competitor. See how that works?
How to identify indirect competitors?
Okay, we’ve answered the question “What are indirect competitors?” and even looked at several examples. So, now we are going to check how you can find them and tell when you are looking at one.
#1 Use Google (but go beyond your service/product)
Google has not earned the reputation for being the king of search engines for nothing. This makes the perfect place to start your search. After all, that’s probably where your target audience would be looking, too.
If you were searching for direct competitors, you could simply use your target keywords + “location” (if you’re a local business).
But in this case, you are looking for your indirect competitors. So, try something different. Search for the need your product or service meets instead.
This means that instead of searching for “shoe stores Arizona,” you could try “best running shoes.” You could also go for “how to stay fit by running” and see what pops up.
Source: Google
You might get a few shoe shops around the area, some protein powder stores, athletic wear, fitness routine blogs, etc.
Note: If these broader searches don’t show you location-specific results, you can change your search location on Google.
#2 Get the customers' help
If you have seen us mention this before, you might be exasperated, but it works. Look, we are not the only ones who think so.
Source: Reddit
Convinced yet? Alright, let’s get to it. The best way to get your clients’ opinions is to pop a casual survey or online poll (with a text box, most likely). Maybe even a 1-1 chat every now and then.
The idea is to do this while you are gathering customer satisfaction data. You know, one of those cases when you’re trying to judge how effective your strategies have been.
And then, somewhere in there, you can pop a question about where else they would look for answers. Exactly — there is no need to ask directly to name your competitors. Simply find out what other options your clients considered, for example.
You might be surprised by the responses you get.
#3 Monitor what people are saying online
The next best thing to know after the definition of indirect competitors is how to track what people are saying online about your brand. This is a useful practice known as social listening.
But this time, you are going to do more than just monitor what people say about your brand and campaigns. You want to see if they are also listing any alternatives, preferences, or even other services/products/features that you don’t have yet.
Somewhere in the middle of those discussions, you can find some serious indirect competition.
One more thing: you have to expand your search as wide as possible. That means checking as many social media platforms and forums as you can. Use your hashtags and keywords that describe the needs your clients have.
Don’t just limit yourself to popular platforms like X, TikTok, Facebook, and Instagram. Include online forums, subreddits, Quora, Discord, and wherever your target audience likes to hang out.
This can be quite an eye-opening experience. You know, people are creative, and you might just find an unexpected competition from a brand that never crossed your radar.
#4 SEO competitor analysis tools help
There are tons of SEO competitor analysis tools out there that can help you with this process.
Think about Semrush, for instance. It can actually flag other websites that share overlapping keywords with yours. Yep, even if these pages are not offering the same products or services.
So, good SEO software can actually make your googling around (see point #1 above) much easier.
Source: Semrush
When you discover those businesses, be sure to check their reviews. Maybe some customers mentioned other substitutes that can clue you into even more competitors.
Bonus points: You can then check out which keywords they are ranking for. You never know what can spark your imagination and inspire your next SEO strategy. Not sure how to spot those promising keywords? Check out this guide here.
#5 Networking works wonders
If you are in a niche where people like to hold events, you are going to love this one. Okay, it does require you to actually attend those gatherings and meet up with people. But hey, a little socializing won’t hurt. All you have to do is go to as many of these meetings as you can.
You get to see what other people are doing and what they are hyping. You can also understand the scope of who’s just entering the industry and what everyone else is up to.
Do you see how this helps you? Now, you can spot both your competitors' strong points and weaknesses. Next, you can use this information as you wish.
The best part of this is that while getting the scope of your competitors, you are building relationships in your niche.
4 best practices for analyzing your indirect competition
With us so far? Great. Now, you are probably itching to wrap things up and get to the action part. Same here. But there is just one more thing you need — our best tips for analyzing your indirect competition. They work for both small brands and big businesses.
#1 Study where the audience overlaps
When you notice a website pulling in the same demographic as you, you want to get a bit closer. Chances are those could have been your potential customers, and so you are already losing ground.
By mapping where the audience overlaps, you will discover new places to fish for potential clients. Say one of your biggest indirect competitors as a gym is this new home workout app.
Source: Apple App Store
You notice that most of the people raving about it are busy moms who love their 7-minute routines. This might be your cue to introduce a new online class for busy moms and professionals.
Yours might center around a 10-minute daily full-body workout for weight loss or toning.
Wondering if this will work? Well, there are tons of searches like these on YouTube, and many of them have been getting millions of views for years now.
Source: YouTube
Plus, you might just learn something new for your SEO strategy. For example, if you find that a specific type of blog post gets the most love, then you want to consider blogging, too.
#2 Use automation where possible
Truth be told, doing any sort of competitor analysis is going to take a lot of time and skills. Plus, you are not going to have all the required experience all the time.
Sometimes, you’re simply not going to have enough time on your hands. At least not enough to spy on everyone else while still paying enough attention to your day-to-day business activities. This is where automation comes in to save the day.
You might be thinking, “But I already use SEO competitor analysis tools, and it does cut down a lot of the hassle and save time.” That’s cool and all. But what if you could take it a step further?
Automation lets you set the analysis process and forget it. With everything running on autopilot, you can use your time more productively. So, where do you begin?
With most software incorporating AI, you can use APIs to connect a lot of different tools together and pull all your data in one place.
For example, Semrush, Moz, etc., allow you to use API. This makes it easy for you to monitor your industry keywords. You can also easily track rankings and much more.
Source: Semrush
Plus, keep in mind that your data is only as good as what you do with it. So, it’s probably a great idea to combine your automation with the SWOT methodology (more on this later).
This helps you accurately judge how your brand is doing compared to your competitors. As a result, it becomes easier to see gaps where you can improve your own marketing strategy.
Seer Interactive has a cool post about this, where they used APIs to pull competitor analysis data from Semrush. Then, they moved that data into PowerBI to create a visually appealing graphic. This way, it’s easy to see lots of useful information at a glance.
Source: Seer Interactive
#3 Choose a reliable method for analyzing the data
For most people, when they ask for indirect competitors' meaning, they are not yet thinking of the analysis stage. But in reality, knowing how to analyze your competition properly is much more important than simply covering the theory.
Because you will need a process that can help you get accurate data — for many marketers, this would be the SWOT methodology.
What makes it popular is that it allows you to assess your competitors from different perspectives. This includes their strengths, weaknesses, opportunities, and threats. Here is a handy graphic that categorizes the kind of information you get from the SWOT analysis.
Source: BiteSize Learning
This way, you will be able to see in which areas they are better than you. You will also learn what they do differently and what they are not doing right. This is what lets you figure out how much of a threat they really are to your own business.
This information comes in handy when you are creating your own marketing strategy. Just make sure to take notes of the most interesting and relevant insights. Then, apply what you learn in your decision-making process.
This way, you can become stronger and avoid making the same mistakes as your competitors. As a result, it’ll be easier for you to outrank them and improve your organic SEO.
#4 Learn (but don’t copy blindly)
You may have heard people say that imitation is the best form of flattery. But here’s the thing — it does not apply in the business world.
In the digital marketing space, it’s more like imitation is the best way to land a copyright strike or tarnish your brand reputation. At least in most cases.
Now, really think about it — say you are doing a guest posting campaign to get backlinks. Would you copy their writing style 100%? Of course not. But would you reach out to some of the guest blogging sites that link to them? Sure, why not?
The same applies to your competitor's research and analysis. Take a look at what works great for them: keywords, sales channels, platforms, formats, etc. But choose only what seems logical for you and add your own voice to that.
After all, there is nothing wrong with getting some inspiration from others. But only if you put your own stamp on it to make it unique and truly yours.
Conclusion
So, why does indirect competition matter? We bet you have a much more detailed answer to this question by now, especially after all the indirect competitors' examples we’ve seen today.
Just like with any competition, the more you know about them, the better. Still, the most important thing is to always listen to your audience and put yourself in their shoes. This will definitely help you build a stronger brand reputation.
Once you build that reputation for consistently delivering the best experience, you won’t have many problems, no matter how fierce your competition is.
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