Indirect Competition

March 2nd, 2009 by | Print



Indirect competitors can be a silent killer or a new avenue to revenue during a down market. When you researched your market, how much time did you take to review your indirect competition?


An indirect competitor is a business that provides an alternative solution to the same market. For example, let’s say that you own a residential carpet cleaning business. You solve the problem of cleaning dirty carpets. Your direct competitors are obviously other carpet cleaning businesses. Your indirect competitors include supermarkets and retail centers that sell and rent carpet cleaning equipment or maid services that will clean carpets as a part of their service.


You may have some customers that are elderly or disabled and can’t clean their own carpets. How much of your business does this represent? What solutions are you going to create to keep the remaining percentage of customers that can clean their carpets? Educate yourself on their alternative solutions.


So what can you do to identify your indirect competitors?


Don’t look at your business as the products and services that you provide, but the problems that you solve and the wants that you satisfy. Break the problems and the wants down to their most basic form. Once you have that basic bottom line problem or want, identify how they can be satisfied and by whom.


Once you have identified your indirect competitors, you need to perform the same research as you would a direct competitor. You need to know their products and services, their price points, their unique selling propositions – and then you need to see if there is room for you to take advantage of their weaknesses to create a new market for yourself.


Keeping with the carpet cleaning scenario, you may identify a number of cleaning companies that focus solely on the commercial market. Do you have what it takes to provide a similar solution to the small to medium size business to compliment your residential base? If so, you can get to work on research and planning for this new market. Realize that you may not be able go in with the same pitch. The needs for the commercial market may differ. If you want to capture them as customers, you need to know their demands and how you provide an advantage over their current dealer.


Down markets require creative solutions and force customers to take a look at the alternatives. Take the time today to start learning about your indirect competitors. If you don’t, they may just get the jump on you and steal away your base before you realize it.


All The Best,

Doug Dolan
The Solopreneur’s Guide


2 Responses to “Indirect Competition”

  1. Paul Says:

    Gives me something to think about, thanks for the article.

  2. Lucia Says:

    Great insight, thanks for sharing

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