Competition or Customers — Where do you spend your time more?
How I wish that organizations especially the ones starting up, spend at least half their time and resources in understanding their customers as much they spend in tracking their competitors. It’s amazing to see presentations after presentations detailing out the competition strategy but a very fuzzy or macro view of — who are we trying to sell to?
There is nothing wrong with being competition focussed, in fact it’s good to keep a close watch on competition but when you have limited resources and you’re trying to launch something new, it’s very important to understand where and how to spend your resources judiciously.
My recent interaction with two different businesses left me thinking more on this. One is a mid size company, been into business for few years, now venturing into a new category and the second one is a new entity altogether. Both have lean marketing teams to work on the launch and the maximum effort that both have spent as part of their market study is tracking the competition strategy. Details of their campaigns, social media initiatives, promotions — everything has been tracked and well documented. And both these companies are aiming at one objective while drafting their launch offer — how to be better than the competition? Yes, the prime objective is to come out with offers more lucrative than their competitors. We don’t even know if customers are actually happy with those offers or for that matter if customers are looking for offers only or something else? For company one, the competition strategy actually maps almost every player even remotely associated with the category and the product is as such that it can be of use to consumers as well as SMBs. A detailed competition analysis like this would have been actually a good thing if the team wouldn’t have been trying to focus on coming out with an offer that can be attractive to all segments. One can not have a paint-everyone-with-the- same-brush approach especially when launching a new category.
If we will be only competition focussed, we will at best be better than our competition but not necessarily the best choice for our customers. Deciding the focal point of any marketing plan is extremely important and it has to start with — understanding our customers.
The more granular we go into understanding our customer, the better we would be at connecting with her.
There are many formats and templates available to help you detail out your customer understanding but for me the most basic five questions that always work when I am trying to launch a new campaign would be the following:
Who am I trying to sell?
What am I competing against?
Where is my potential customer available?
Why will the customer choose me?
How am I adding value or helping my customer?
These questions look very simple prima facie but try answering these and you will realize these pretty much cover all the key points that you need to understand your target audience while planning for a campaign.
Customer or competition understanding is not an either or choice for any organization, both are important but when it comes to deciding your center of attention, it’s important to choose your direction between being customer focussed vs. competition focussed. From Amazon to Alibaba, there are many interesting case studies available for you to read on the merits of being customer focussed but one of the recent articles that I quite liked on this topic is by Tara-Nicholle Nelson where she shares some great insights on her experience with MyFitnessPal. You may read her post here.