Imagine that Macy’s CFO, Karen Hoguet blames Netflix as a reason why sales are sluggish. Electronics and online subscriptions are taking market share from apparel, Hoguet said at a recent conference.
I think part of that is the customers are buying other things, whether they are electronics, cable services, Netflix, whatever,” Hoguet said.
Who is the surprising competitor you never considered?
It is no surprise to see how consumer’s options have exploded in the last 10 years.
You can spend money for on demand video services like Hulu and Netflix instead of subscribing to traditional cable from Time Warner or Comcast. Instead of a conventional home phone from AT&T, you save that money and use Skype for free. You don’t go to a bar for a drink, you head to the movies where they serve your favorite beer or wine on tap. You Uber instead of driving or taking a cab, you use AirBnB instead of a hotel. Bakeries aren’t competing with bakeries but the fear of gluten.
Lot’s of options. Lots of changes.
Even the wine industry is suddenly looking over their shoulder at the growth of cider. Cider? Yes, you never know which competitor will surprise you. The unexpected competitors are fighting over how and when your customer spends their money?
The Surprising Competitor You Never Considered
Brands are wise to find insights from their existing customers to make sure they understand what is happening in their category. But the fight is often not just within your category. In fact, your biggest competitor may not be a traditional competitor at all.
A friend recently asked for help sorting through her marketing activities. She works for a state-funded venue and has a small marketing budget. We talked about leverage, strategic partnerships and other approaches, but I cautioned her to start at the beginning.
I told her that she had to first, answer this question:
Who is the competition?
Your organization (business/brand) must understand who you compete with and it may not be who you think. Start by aligning everyone within your organization on the same target audience. Gain consensus so that every drop of marketing money can be used to soak your target with your message. How do you do this? Here are 3 things to try:
- Personal conversations. I prefer to start by talking to someone versus conducting a survey online since there are nuances that can easily be missed. Having a live, in person conversations allows you to see some trends that might be missed with pure quantitative data. You can probe in a deeper way, to find out what motivated someone to buy from you, how they learned about your business and upon exiting, how the experience was. Through this research, you may also realize that you are attracting the wrong audience for your brand. Be curious. Ask questions. Learn. And then write up your findings and observations for the management team to discuss. The end results must be a well-defined target not based solely on demographics, or gender but emotional needs.
[Tweet “Real live conversations are a great way to understand existing customers. “]
- Who is in your customer’s considerations set? Whether in person or on the phone, talking to existing customers helps you learn about the choices and options your customers sees in front of them. In marketing parlance, we call that their consideration set. That’s a fancy phrase for, what choices do they have and what who is your competition? A movie theatre may compete with music concerts or the circus. A bowling alley may compete with bars and pubs. The zoo may compete with hiking in a park, aquarium or museum. Create a model that explains all the choices someone considers when they want an experience or product you sell. I like to cut out pictures of those venues or brands and keep them on my office wall to remind me of who is trying to reach my target audience too.
- Strengths and weakness of the choices. Without getting too analytical, you can jot down the strengths and weakness of your offering versus the competitors. What happens if you offer something that is usually a big draw for your competitor? So bowling alleys started to have bars, music festivals came to zoos and movie theaters started offering sit-down meals. When you borrow from your competitor’s strengths, suddenly you create a unique experience. Barbershops that serve high-end coffee, grocery stores with banks or CPA with spas.
At its core, marketing is about insights and understand. But a brand exists based on the collections of associations that customers have about your product or service.
[Tweet “Your brand is what your customer experiences, not what you say it is. “]
What can you do to expand how customers engage with you? Being strategic means you ask a lot of questions before doing stuff. You formulate at ‘theory of the case.’ By putting together a strawman, you ask questions of your colleagues like:
Our customers choose us one night out of the month. What if we could motivate them to come a second night each month? Maybe, we need to find something else they get from a competitor, that we could offer them. What if we offered our customers ___________like they get from our competitor?
Don’t be surprised. Think about what can you borrow from your competitors who are trying to gain share of time, money and attention from you?
Need help understanding who your really compete with? Give me a call and together we can sort out the situation.
