Success Start With The Competition
SECRET TO POSITIOING YOUR COMPANY FOR LONG TERM SUCCESS
The modern day marketplace is as competitive as it has ever been. As I wrote about previously, in the ‘Evolution of Marketing’, the advancement of technology has enabled more cost effective methods for new companies to enter the market. There are market submarkets and niches than ever before and as a result our need to accurately assess that market can be the difference between success and failure.
In order to succeed we must find a group of people that are not having their needs met. To do this we must understand the competitive landscape. Only then can we truly find whitespace and bring an idea or concept to market that is both good and different.
Failure to understand the market and find the groups of unserved consumers means we are entering the market with the strategy of going head-to-head with developed competitors. This is like trying to swim up-stream in a river. Why not instead look to find a group that is not currently having their needs met? Sure you still have a lot of work to do but swimming with the current is a much easier endeavour.
Find whitespace and differentiating yourself if often easier said than done. Unfortunately for us the human psyche is particularly bad at finding whitespace. We are wired to notice what’s there, not what’s not there. “What you see is all there is” (WYSIATI) is a term popularised by psychologist Daniel Kahneman to describe the cognitive phenomenon (bias) that our brains are wired to focus on the information that we have in front of us.
We become so used to the way things are that we struggle to place emphasis on what is missing, we become conditioned to our environment. History is full of examples where small, seemingly obvious, products and services created massive change. Assessing the competition correctly can provide us with the ability to find what’s not there, to find what is commonly referred to as “whitespace” or a “blue ocean”.
When you stop and think about it, it sounds obvious. Of course you don’t want to just re-create another product or service that already exists and offered by many other companies. Look around, unfortunately that is what we see, a plethora of me-too products and services that are different in name only. No wonder so many companies fail, there is no real reason why the consumer would choose them over one of the (many) competitors.
As Marty Neumeier says “You cannot be a leader by following”. Courageous companies are those that consciously choose to differentiate and make decisions for long-term success rather than focus on short-term gains. They also have been shown to perform better according to a paper written by the Harvard Business Review.
So, what does a company look like that understood the competition and found whitespace? Think of sticky notes (Post-Its), DVDs by mail [and now streaming] (Netflix), touchscreen phones (iPhone), or decentralised money (Bitcoin/Crypto). Understanding the competitive landscape gives you the ability to uncover an unmet need of the market that you can focus your company around.
To combat our own biases of only recognising what’s there, rather than what’s not, we must develop a framework that allows us to assess the competition accurately and uncover whitespace. To do this we must first understand the key players in our market, submarkets, and niche. Once we have a clear picture of the competitive landscape we can then assess the key players strengths and weaknesses and position ourselves in the gap.
To start, think of your company in one of the 3 categories, health, wealth or relationships. In my opinion every company that exists in one of these 3 categories. You either help developing health, building wealth or with improving relationships. Admittedly that is a very broad position to start assessing the market, next we must start breaking down this position into the layers of submarkets that exist until you find your niche. This allows us to zoom out and see the whole picture or zoom in and assess the details.
We map this out by using the diagram below. Each concentric circle, going from the centre out, represents a more broad area of the market.
Let’s use an Italian Restaurant as an example of how to use this framework. Starting from the centre and moving out, the restaurant distinguishes itself as an Italian restaurant, layer 2. Primarily there to provide a dinner option, layer 3. Dinner is one of many Food options to target, from breakfast to late night , layer 4. Enabling people to do something different from cooking and have an experience by having an outing, layer 5. Lastly the restaurant is positioned to provide a service that helps build relationships by literally helping you ‘break bread’ with others. We have reached the outermost circle and found ourselves in one of the 3 categories.
Italian Restaurant > Italian > Dinner > Food > Outing > Relationships
I’ll provide some more examples so you understand this framework enables better understanding of your competitors.
Your Crossfit Gym > Crossfit > Gym > Functional Fitness > Exercise > Health
High Income Family Tax Accountant > Family Accountants > Tax Accountant > Accountant > Financial Services > Wealth
Once you understand the markets you must make your way out through each layer and list a couple direct and in-direct competitors. Direct competitors being a company selling the same product or service as you. An In-direct competitor being a company that sells a different product or service but to the same target audience. Once a list has been compiled, narrow it to around 5 key players.
Now we assess those 5 key players on what makes them good at what they do, and what makes them different from everyone else? Do this by using some relevant criteria that rates them out of 10. For example, some criteria options could be the cost, the variety, how unique a product or service it is etc…Completing this assessment will provide you with an understanding of your competitors strengths and weaknesses, by doing this you can determine what your focus should be.
We now have a more complete picture of the competitive landscape, enabling us to better assess where a gap in the market could be found. Any gaps are potential areas of focus for your company. Determining your focus is so extremely important. As I’m sure you have heard before “if you try and be everything to everyone, then you will be nothing to no-one”.
The law of focus is a marketing concept that is about owning a word in the prospects mind. Why do we want to own a category/niche(word)? Because by owning a category we associate the relevant products and services of that category with our Brand. When our brand is associated with the category we stand a chance of being the category leader.
For example, think of touch phones and the iPhone, or cola drinks and Coke, or high intensity functional workouts and CrossFit. They all own a word in the mind of the consumer, and you should as well if you like the idea of having a successful business. The smaller our company the more niche the category we must try and own. By using insights from exercises like this we can find a gap in words that our competitors own.
In the book Positioning by Al Ries he says “You need courage – When you trace the history of how leadership positions were established, from Hershey in chocolate to Hertz in rent-a-cars, the common thread is not marketing skill or even product innovation. The common thread is seizing the initiative before the competitor has a chance to get established.”
Marty Neumeier uses the concept of an Onliness statement to test your focus and differentiation. He says that if you cannot complete the sentence “Our Brand is the ONLY _______ that _______ (In the first blank you put your category and the in the second blank describe your difference) then you should start thinking about your product from scratch. Remembering to prioritise the unserved tribe rather than the product itself.
There is a very obvious problem here that many of you will encounter when trying to pick your area of focus and completing your “onliness” test. This is that there are only so many sub-markets and niches to own, then what do you do? Then you must create space for your business by repositioning the competition that occupy that position in the mind of the customer.
Repositioning is about a game of perceptions in the mind of customers. It is about picking a fight with a competitor and showing the world that your difference is what makes you better. There are many examples of this happening in the past. Repositioning cannot be successful if you are afraid of having this fight. You must be the Ying to the competitors Yang, the fast to their slow, the new to their old and the simple to their complex. Get my point?
Great positioning has more than just long term financial benefits. Courageous positioning creates a company that leverages and multiplies its strengths to better serve consumers. Correct positioning also allows you to be more focussed with your work and as a result gain more experience, in the form of paying clients and customers. With more experience comes increased aptitude which makes your company develop more of an expertise and as a result is less interchangeable with competitors.
“To avoid being drawn into comparisons with competitors and fighting them on price we take a courageous approach to positioning ourselves. To do this we must first understand not just our market, but also the sub-markets and niche’s.”
It is through understanding the competitive landscape that we find whitespace and develop clarity in how to best serve consumers and what products bring them the most value. This not only brings with it financial benefits but also assists us in gaining more experience in a specific area. The more experience we have the more expertise we develop, making the company less able to control your niche/submarket.
Less competition, more work, and the ability to charge more? Why haven’t you started to understand your competitors better?