Think your competitors are important? Think again
In business we hear these questions all the time: Who is your competition, what do they do, what do they sell?
In this ever-changing market, those questions are important…but not as important as you might think. They represent just part of the picture; but certainly not the most important one.
To be strategic, to be different, your focus needs to change. The real questions are about who your customer’s competitors are; who are they, what do they do, how do they compete? etc… a small but fundamental change in the perspective.
These are the guys that you have to be aware of; your customers’ competitors. The real value for customers is to have a business partner that can help them to overcome THEIR competitors. That’s a real source of competitive advantage. Being able to understand your customers’ business landscape and help them be more competitive is a huge source of added value. In this way, your company will create a strong, long-term commercial relationship with your customers.
And that is a good strategy.
So, how do you do it?
1. Analyse your customers’ scenario
What they are selling, to whom, and why. And if you want to be more strategic: why/what are your customers’ customers buying from your customer. I remember an interesting case where a company that was selling a very new successful car didn’t realise what their customers were really buying. But due to an after-sales survey they had their Eureka moment. It wasn’t the car but the gigantic space that was inside the car that their customers were really buying. According to their customers, that car company was selling “an extra room to share with the family”… not just a car.
2. Analyse their value chain
How it works, how you can help and how you can add value. Also, being able to understand their processes is crucial.
3. Analyse (and understand)
You need to know what you are selling to your customer and identify how this offer could be improved, to enable your customers’ competitive position to be better. Ask yourself why/what are they buying from you.
This simple exercise is rarely done. Almost every firm is more focused on their own competitors, what they are doing, why they created that campaign, why did they send that email and so on. In the end, they get caught in a constant game of “me too” – or even worse “mine is better”.This definition of “better” is more often than not measured by firm’s own point of view. Nobody asked the most important people their opinion: the customers.
These firms end up filling their products/services with new colours, new offers, new promotions, new features and new whatever-sounds-cool, but have no idea whether or not the customer really cares. And don’t tell me that your promotional discounts are an excellent tactic – everybody wants to pay less.
So, if you want to have a good strategy, start by analysing competition. But not yours; your customers’. They will be more than happy if you know who their competitors are and how you are going to help in overcoming that competition. Your customers really don’t care about who your competitors are. In fact, your customers know better than you who your competitors are. So, another strategic action that you could do is ASK your customers WHO your competition is. In that way, the competitive approach could be improved for your business.
But, being honest, there is no silver bullet or magic recipe for success. Or for a successful strategy, or for a successful marketing campaign or for a successful whatever. If those recipes exist, everybody would be the winner. However, some basics and easy actions do help. What you can do is very simple: be different and try new ways to add value to your customers WITHOUT thinking about what your competitors are doing. That “strategy” is the less explored one. The market is infested with marketing techniques/fads, consultants-experts-in-you-name-it and books about how to win in business. In reality, those things could be helpful, but the most important thing in business is being different. And think about things twice. You don’t have to be an expert in strategy, marketing, sales or whatever business discipline. You just have to be an expert in your customers.
So, do you still think that your competitors are important?