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.