As you may already know, competitor analyses are useful as benchmarks, but we really shouldn’t rely solely on them, especially when developing a business and brand. Your desire to simply outdo the competition shouldn’t drive your strategy. As business leaders, our aim is to be proactive in our strategy creation, not reactive; and to be customer-focused, and not competitor-focused. There is one major draw-card with having your focus on customers, not competitors.

The #1 drawcard with having a customer-focus is: not getting held back

Conversely (and to illustrate my point), the problem with a competitor-focus is getting held back. I remember running a 100m race back at my Grade 2 athletics carnival. An eager little sprinter back then, I knew I had the chance to take out that first place ribbon. Despite kicking off to a fantastic start and leading in first place for the first 90 or so metres, I suddenly realised I couldn’t glimpse another runner. Curiously, I turned my head to see how much I was leading by, when my friend Bethan swiftly darted past for the next 10m, unexpectedly winning first-place.

As business leaders, we can’t afford to make the mistake I did in the running race. We can’t fix our gazes behind us or to the side to see where our competitors are, what they’re doing or how they’re going with the race. If we do, we lose momentum, we slow down, we can get overconfident, and then end up discouraged as they leave us in the dust. ‘This sounds easy,’ you might scoff, ‘of course, I wouldn’t get too fixated on what other people are doing,’ yet, unfortunately, we see dozens of businesses of various sizes falling into the habit of hyper-focusing on competitor strategies.

Do you relate?

Let’s say you own a hairdressing salon and you hear that your main competitor is offering a ‘deluxe’ new experience. Google reviews reveal that the billing system of your main competitor is slow though, and repeatedly leads to confused staff and time delays of over 10 minutes. You conduct an informal competitor analysis and decide to combine the opportunity to improve your business, with their weakness.

Inspired, you create campaigns around how quick – yet luxurious – your salon is. You invest in an efficient point-of-sale system to ensure billing is seamless. You also decide to improve your first-class feel by offering extra treats, hot towels, and a complimentary hair product during treatment; all of which is ordered within days.

Two weeks later, you hear that your main competitor has now implemented a brand-new point-of-sale system, other efficiencies, hot towels, complementary offerings and sweet treats. New Google reviews prove that they are delivering an amazing experience for clients now. You’re competing on similar ground; overwhelmed, you decide to push more advertising and tell staff to emphasise how quick everything is becoming.

A few days later, you get feedback from a loyal customer saying they don’t feel like they should be paying ‘luxury’ prices for how quick your service is becoming, with less attentive staff. Your updated first-class branding hasn’t been effectively communicated; although they appreciate the hot towels. They don’t return, opting to try out your main competitor instead. Disappointed, you realise that although your competitor analysis provided a guide, you probably shouldn’t have based your new strategy on it alone.

So how should I analyse my competitors?

Competitor analyses are effective for benchmarking and gaining broad awareness of what your market is drawn towards. They are great to do as you’re setting up a brand, new business, launching a new product/service or if you want to simply revisit how you’re tracking in the marketplace to make improvements to your strategy.

Analyse your competitors by asking some key questions.

Given that a goal of ours as business people is to offer the market something that’s more competitive than other brands while meeting customer needs; we should be asking questions like:

• What do our target markets desire?
• If I was my target market, what would I prefer about my competitor’s brand, service, and offering than my own business’?
• How can we best serve the market needs and exceed their expectations throughout their customer journey /experience with our brand?
• Are we providing something that will offer more value in the long-run?
• Does our offering align with our value proposition? Even if they may not see it written down, would our customers know what our value proposition is through their experience with our brand?

If you remember one thing

While competitor analyses reveal ‘easy wins’ to overcome competitor offerings, it remains insufficient to base your marketing and business strategies on what you notice and know about competitors. Business and marketing strategies are usually composed of a myriad of major aspects, such as a revenue model, a human resources strategy, operational processes and procedures to align with your value proposition, goals and objectives, and your messaging strategy – to name but a few. The most overwhelming part facing strategy leaders and teams is often that these elements (and all the other ones!) must be integrated tightly and strategically for them to work. (Hey, don’t worry, my team can work with you if you’re in need of a hand!) Whatever industry you work in, you’re running a race, but whether you’re first or not; just keep on sprinting and improving your technique as you go. Know where those other runners are, but just don’t let them hold you back, don’t overly fix your gaze on them, and you might just take out the first-place ribbon.

What are your thoughts on basing strategies on customers instead of what competitors are doing? 

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What a digital business is not

Hesitant to experiment – Digital businesses recognise and embrace the ability to experiment, they do not shirk in fear of the unknown and approach every external threat as a new opportunity to grow. Waiting to see who does it right does not fit into the mantra of a digital business mindset.

Reactive to change – Digital businesses do not let internal policies slow down evolution or change, rather they embrace it. They champion change and ensure their company is structured in a way that can quickly adapt to changing environments.

A technology-first business – Not every digital business is heavily invested in technology, many instead look for opportunities to leverage technologies to enhance how they serve their customers, or improve their products, as the customer experience is top of mind for their business-level decision making.

Characteristics of a digital business

So what characteristics would typically define a ‘digital business’? It is not the approach to technology, rather, it is in the mindset and approach to customers, innovation and organisational structure.

A Customer First Mindset – Digital businesses adapt to changes in consumer behaviour. They take an agnostic approach to ensuring that whatever the business does, it aligns with the consumer’s interests (on a macro level). By challenging ideas with thoughts such as “is this what the consumer wants?”, a business obtains a better understanding of how to serve their customers.

Constant Evolution – A true digital business doesn’t stay in one place for long. Through dedicated teams that embrace change and see the unknowns and the new knowns as opportunities, digital businesses are constantly scanning the horizon.

Unified Operations – Digital businesses utilise the opportunity to converge departments that have traditionally been isolated or segregated, and achieve unification through technology. One big pain point of traditional businesses is the slow pace of rolling out change with many different departments and stakeholders.

Example of a digital business

There are a few businesses that have undergone significant digital transformation. For example, when Sam Zivot joined Lorna Jane in 2010 as the company’s Digital Strategist, he took on the responsibility of developing an online community that helped shape and transform the business’s approach to digital. Now, Lorna Jane has a heavy focus on unifying digital marketing, suppliers and agency relationships to improve the brand’s ecommerce channels and conversions, drive traffic and revenue, and explore new and emerging marketing opportunities. Jessie Dean, the current Digital Marketing Manager for Lorna Jane, has said in a past interview:

“I think the most exciting part about working in digital is all of the opportunities. There’s constantly new technology coming to market and I’m very fortunate to work with a brand that’s so open to trying new ideas.” 

This highlights Lorna Jane’s new approach to digital, which is to constantly scan the horizon and look for new opportunities.

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They have a Unique Value Proposition (UVP)

A unique value proposition is a promise to bring value to the customer through the product’s features or service. It usually is represented in the form of a statement or statements that summarise the reason(s) why the product and/or service is valuable and special – aka why customers should purchase it. Below are some essential questions to ask when identifying and articulating (often forgotten!) your UVP.

• Who is your target market? – The value proposition should be aimed at meeting the needs of certain or specific groups of people within an industry.
• What needs will your product/service satisfy? – The product or service is designed to meet a specific need of the customer.
• Who are your competitors and what do they offer? – The product or service should be different, ideally better in specific areas, than those offered by the competitor.

They execute their Promise

The thing about a UVP is that it doesn’t really mean anything unless you deliver. Below are the three most important things to aim for when carrying out your promise.

• Quality– There is no doubt that quality is high on the list of the things customers look for in products. Quality goods and services (relative to the price point) satisfy customers and encourage them to become loyal to your business.
• Value for Money- Whether or not the economy is thriving or takes a downturn; one thing that is constant is the desire of customers to get bang for their buck. Customers want to know that their hard earned money will be worth it regardless of the price.
• Customer Service– People like to hear and feel that they are important. Having a customer-centric business is one of the most powerful ways of generating word-of-mouth, a free and most effective marketing tool. Your product may not be the best but if your customer service is superb, it can be enough to keep them coming back.

They Market the UVP and Promise Well

So you have a compelling UVP and you execute your promise to a T, but without marketing your product/ service, you may well disappear into the background and even worse, be forgotten. To ensure that your product/service stays top-of-mind with your customers, consider these marketing strategies.

• Consistent Branding – It is important to display consistent branding across all marketing channels. The purpose of which is to differentiate from competitors, increase customer recognition, and reinforce brand identity.
• Establish an Effective Online Presence – Studies show that digital marketing can no longer be ignored. A study conducted by Google and Shopper Science found that shoppers are most likely to switch from ‘undecided’ to ‘decided’ while researching online. To have an effective online presence it’s about determining the where, when and how your customers look for information and then presenting them with the right ‘what’ regarding your product or service information at those critical research points.
• Collaborate with Influencers – Since influencers are viewed by people as credible sources of information, the tendency is to listen to their suggestions and opinions. Collaborating with influencers can potentially increase brand awareness and transfer credibility if you’re in a particularly difficult market to crack.

These are by no means exhaustive, but they offer a really good place to start!

Interested in discussing options for refining your brand’s competitive positioning?
Contact Us for an obligation-free consultation, or give us a call on 1300 714 146.

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Take Toyota and Lexus for example, which are both car brands of Toyota Motor Corporation with very different positioning strategies. A Toyota Camry and a Lexus IS may be comparable in shape and size, but the two models are designed and marketed to reach two different consumer groups. The Camry is for consumers wanting reliability and economy, and the IS is for high-end consumers wanting prestige and luxury.

When you take a proactive approach to your product positioning, you can influence the market on how they perceive your product. Failure to actively promote and position your product will inevitably result in the market doing it for you, and this can be detrimental to your company’s ability to gain a strong competitive position.

So how do you position your product?

First, you need to select the target market that will be most receptive to your product’s positioning. Segmentation decisions are instrumental in developing your company’s product positioning strategy.

Knowing your target market allows you to effectively position your product to meet the needs of that specific market. With this in mind, you are then able to develop and implement more cost-effective and efficient marketing strategies.

Once you have determined your target market and their needs, you need to formulate a positioning strategy that will appeal to the targeted demographic. You must decide how you want to position your product in the minds of your targeted customers.

A solid understanding of your market and your competitors will assist in being better able to position your product. Comparing your product’s features to that of your competitors and identifying your unique selling points is a good way to determine what differentiates your product.

Revision of your positioning should be an on-going process to help refine your position according to changes in the market. Environmental changes or shifting consumer preferences often force firms to rethink their positioning strategy.

How do you communicate your product positioning?

There are a host of resources available to assist you in communicating your positioning statement to your target market.

Social media is an important modern day marketing channel that, if utilised correctly, can give a company valuable, market-specific exposure and vital product related feedback. A social media presence backed by a solid following creates an environment for open discussion on your product.

There are many innovative marketing tools available today to assist companies in achieving their positioning strategies. Different tools will suit different products, but the key to success is choosing the right mix to match your product and the goals of your company.

So, if it has been a while since you last thought about your product’s positioning, now would be the time to do so.

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