Marketing: Finding and Facing the Real Competition
Where's the Competition?
In marketing, we need to understand our competition to get our share of the market. But the most common ideas about competition are all wrong, and so our marketing strategies fail. Learn about the real nature of competition to gain a winning edge.
Designing marketing solutions for small business, I have come to see that the real competition is not companies like us: It's the demands on our prospective customer's attention, time, and money.
Let's get inside our customer's heads and help them to decide to go along with us!
Two Views of Competition
The normal idea of business competition is those businesses that provide similar products and services as we do to the same target market. That idea is correct, but incomplete.
We also have to look at competition from the customer's point of view. We want the customer to:
- Focus on what we offer and make a decision.
- Spend time deciding to buy and use our product or service.
- Spend money buying our product or service.
If the customer loses focus and drifts away, spends time elsewhere, or spends money elsewhere, then we don't get the sale. So, from the perspective of our customer, our competition is anything else that takes away our customer's attention, time, or money.
Understanding how the customer thinks about competition is a crucial part of building your image of your target market. To learn more about how knowing your target market fits into overall marketing strategy, you can read Small Business Marketing Strategy - Do's and Don'ts.
The Burger Joint and the Weight Loss Center
Normally, we would think that one burger joint would compete against another: So Burger King, McDonalds, and Wendy's all compete against one another. And we would think that a weight loss center would compete with another weight loss center, so Jenny Craig® competes with Weight Watchers®. And that's true. But it isn't all.
A burger joint competes with a weight loss center, too. Look at it from the customer's perspective. The customer is thinking, "I need to lose 10 pounds before swimsuit season. Do I really care?" They see a burger joint, and, if the advertising works, the answer is "No!" or, at least, "Not today!" They see a weight loss center, and the advertising works and - oops! they're not eating burgers any more.
Burger joints and weight loss centers are competing for consumers pocketbooks and minds. That's competition from the customer's perspective.
Your real competition - in your customer's mind - is what gives you a smaller pie to share. Your direct business competition try to grab slices of that pie.
What Type of Attention Do You Need From Your Customer?
Obviously, if you're selling hot dogs, you need a different type of attention from your prospective customer than if you are selling college degrees. In deciding how you will compete for your prospect's attention, consider these elements:
- Is your item low-cost or high-cost? Low cost items are purchased with less attention.
- Will your client be urgent, or thoughtful?
- Are you giving your client a chance for fun, or a chance for self-improvement?
- Are you trying to entice your client to buy a gift for someone else?
- Does your item require additional time from the customer? If you're selling a novel, then they will need the time to read it, not just the time to buy it, and they know that.
- Do your prospective customers know they need what you offer? Or do you need to educate them about its value?
- Is your item controversial? Does our society already create conflicting messages like "ice cream is delicious" and "America is overweight"?
- Is your client expecting to see advertising? If not, if you are meeting them on Facebook for instance, then you need to engage and entertain them before you earn the right to present a product or service.
Address all these issues in designing your marketing program, marketing materials, and advertising campaign.
Getting the Customer's Attention
Back in 1970, Alvin Toffler published a book called Future Shock, predicting that everyone would end up in information overload. Guess what? It happened. We are overwhelmed with information and can't make good decisions any more.
The most convincing sales brochure is useless if the customer is too tired to read. The best salesman in the world can't compete with a phone call from a prospective client's daughter who is in a lock-down at her high school. So many things compete with us for the attention of our clients: the demands of day-to-day life; the all-too addictive distractions of old habits; avoidance and procrastination; and the temptation just to delay and avoid making a bad decision, or even a good one.
We need to recognize that our clients are already in information overload. What will we offer that gives them relief? Here are some solutions:
- Entertainment. This is the road of exciting, stimulating, or funny TV advertising. Get them aroused or laughing, so they will remember us.
- Safety. Give them a sense of confidence, a place to be that is relaxing and encouraging. This web site, HubPages, does that. It gives people a place they can come, read, and think for themselves.
- Education. If our clients are not totally fried, and are open to learning, we can educate them and hold their attention that way. But most people are not ready for this, they are just too overwhelmed.
- Quick decisions. If we design our marketing for the impulse purchase, then we can grab their wallet with minimal thinking on their part.
Which one will work for you? The one that works for your customers. So really get into the mind of your customers, and create the ideal environment for them to focus on what you have to offer and make a decision to buy.
Where Else Will the Customer Spend Time?
In looking at this issue, you need to ask: How much time will my customers spend deciding to buy my product or service? And: How much time will my customers spend using my product or service.
Here are some points to consider:
- Major purchase decisions take major time, while emergencies call for quick actions. For example, if you sell computers to small home businesses, expect them to take some time deciding what they need. On the other hand, if you repair computers for small home businesses, then expect them to make a quick decision to hire you when they have an emergency.
- What time slot do you fill? Dinner restaurants, movie theaters, and watching TV or a movie at home all compete for evening time for food, fun, relaxation, dating, and family time.
- What does this time take away from your client's life? If you sell a workout program or a training course, be aware of what the client will need to give up to use your services.
Honor your client's time. Don't feel you are entitled to it. Just the opposite: Let them know that you are honored by their interest. Treat your prospect like a king or queen, and you will get a new client.
Where Else Will the Customer Spend Money?
If your customer doesn't buy what you have to offer, what will he or she do with the money? For example, when my wife and I decide what to do for diner, we consider: shopping, cooking, and eating in; ordering for delivery; ordering for pickup; and eating out. Since we're not going to go hungry, we'll do one of those four things.
But if the item you sell is not essential, then you compete not only against what else the customer might do with the money, but also what they will not do with the money. Quite simply, they might save the money, or use it to pay down debt. And, especially if you sell high-end luxury items, like vacation packages, you have to consider that.
Whatever the client might do with his or her attention, time, and money is your competition. And it exists inside your prospective client's mind!
If you've navigated all the hurdles we've discussed so far, then the client has only two more decisions to make:
- Do they really want to buy this item?
- Do they want to buy it from you, or from a direct competitor?
So, if you've come this far, you've reached the point where you face the traditional notion of competition: How do I convince my client this purchase is worthwhile; that I'm the best vendor; and that my product or service is the best choice.
We support the decision to buy something by encouraging a sense of urgency and demonstrating value. In plain English, the time is now, and what I've got is right for you.
We address the direct competition by distinguishing ourselves from the competition in one of three ways:
- Time. Fedex beats out the post office with next morning delivery.
- Cost. Wal-Mart price roll-back ads stimulate the idea that the customers save money at Wal-Mart.
- Quality. Four Seasons hotels offer luxury and convenience worth their higher price.
We should design and implement our branding, marketing and sales efforts with one of these in mind.
Test Your Knowledge of the Real Competition
More by this Author
"Think win-win" is a simple idea. Many people claim to do it. Few make the real changes in their hearts and truly live win-win. Let's look deeper.
Many project managers don't know the difference between a Work Breakdown Structure (WBS) and an Activity List. On small projects, it doesn't matter much. But on larger ones, it's crucial to understand the difference,...
As more businesses fail in this challenging economy, understanding the key factors in business success is crucial to the survivors, to entrepreneurs, and to new start up companies. Know these factors, re-design your...