Daniel Burstein
March 28th, 2014
I was
at a conference recently and had a very surprising conversation with the person
I was sitting next to at lunch.
His
company had no competition – and he said it was a bad thing!
What
happens when you have no competition?
Having
worked with a competitive sales office (the team responsible for generating a
report explaining why every deal was won or lost) at a previous job, I gained a
visceral dislike for the competition.
Much
like in sports, we always like to root for the home team and against the rivals
even when it doesn’t necessarily make sense.
As a
Florida resident, my tax dollars equally flow to the University of Florida and
Florida State University. But as an alumnus of UF, it’s hard to cheer for FSU
even when the team wins a national championship.
My
point is: Competition seems rooted in human nature.
I was
surprised when my fellow conference attendee expressed that it was a real
challenge not to have competition. Since there was no one else
delivering his service, potential customers didn’t view it as category they
should consider.
Also,
potential customers couldn’t really get competitive bids or issue proposal
requests (RFPs).
(Another)
theory of relativity
There
may be another factor at play here. Dan Ariely, who spoke at MarketingSherpa Email Summit,
said, “We like to make decisions based on comparisons.”
In his
book, Predictably Irrational, Dan gives an example in which if you were
shopping for a house and had three choices:
·
A contemporary
·
A colonial
·
A colonial that needs a new roof, but the owner will knock the
cost of the roof of the home’s price
According
to Dan, people will go with the colonial with the good roof. The contemporary
suffers from a lack of competition.
Or, as
Dan puts it, “We don’t know much about the contemporary – we don’t have another
house to compare it with – so that house goes on the sidelines. But we do know
that one of the colonials is better than the other one.”
Decision-making
is complex. When we’re making decisions, we usually don’t understand all of the
factors that go into it. Yet, we want to feel that we’ve made a logical
decision, so we look to the information we have at hand to reassure ourselves.
How can
we use this information as a marketer?
Some
marketers try to avoid the competition and never mention them, especially if
they are the market leader. Marketing tradition says that Coke never mentions
Pepsi.
However,
perhaps you should tell customers more about the competition. You should
help them make the best choice between you and the competition and provide them
with something to compare your company to.
Help
your customers make a choice
For
example, KAYAK does this with travel pricing:
Progressive
Insurance very famously does this as well:
This
may seem counterintuitive, so think about the brick-and-mortar world for just a
moment. Many businesses tend to flock to the same location as their
competitors, such as the famed Diamond District in New York City or
even car dealership row in almost every city in the U.S.
Customers
want choice. They want to make a logical decision and consider their options,
or feel like they did at least. Help by giving them options, even when those
options come from your competitors.
Make
sure customers experience a proper comparison
Showing
competitive trade-offs is easier in some industries than others. After all,
sometimes customers don’t understand what other choices they should compare you
product to.
For
example, it was rumored that marketers at Best Buy were sad to see Circuit City
go out of business. Sure, they dogged competitors. But without Circuit City,
would customers now compare Best Buy directly with Amazon.com? While Amazon’s
prices are cheaper, is the service the same as a brick-and-mortar store?
The
Rodon Group, an American manufacturer of high-volume plastic injection molded
parts, faced this challenge. When companies thought of cheap sourcing for small
components, they thought of China.
The
Rodon Group wanted to change potential customers’ frame of reference and show that
it was, in fact, also a low-cost supplier even though it was an American
company. The company’s “Cheaper than China” campaign
increased sales 33%.
You
don’t determine the competition. Your customers do.
But you
can help frame customers’ decisions by showing why your product should be
compared to another offering.
If you
have no competition, give customers something to compare your products to
As I
said above, having no competition isn’t as great as it sounds at first crack.
Perhaps this is why Microsoft rescued Apple in 1997 (well, that, and antitrust
issues).
But
what if you don’t have competition in your category?
Force a
comparison.
After
all, customers are legitimately making a trade-off, even though they don’t
always confront themselves with it.
For
this one, I’m going to use an example from journalism instead of marketing.
In The
Wall Street Journal’s weekend edition, the newspaper will show the price of
a luxury good, say, a $3,000 pair of shoes. Then, it will show all the
different things you could buy for the same amount of money.
Be
careful not to be like the aggressive marketers who create a totally unrelated
straw man – “This online credit monitoring is cheaper than three cups of coffee
a day!”
But if
you do it right, you can legitimately help potential customers make better
decisions.
So what
are you waiting for? Act now! You can either spend the next 30 minutes helping
your customers make better choices or watching cute kittens on YouTube.
Which
choice will be more valuable to you the next time you’re reviewing your team’s
marketing performance?
Have a
little fun internally
While
we always need the hero, it’s fun to have the heel to root against, too. The
Iron Sheik. Darryl Strawberry. The Cameron Crazies.
So give
extra thanks for your competitors today. Then, have a little fun at their
expense to bring the team together.
My
favorite example from my career was using the Blue Screen of Death to represent
Microsoft for an internal worldwide sales kickoff. It got a better reaction
from the sales reps than information about that year’s comp plan. Well, almost.
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