This Blog addresses the age old question asked by agencies worldwide:
“How do we differentiate ourselves from our competition?”
The answer lies in 4 areas in which to immediately focus the agency’s attention and resources.
Decide which will be most appealing to your specific prospective buyer and then do your homework.
Here are the 4 areas to investigate:
1. Direct competitors’ products and services;
2. Indirect competitors’ products and services;
3. The Consumer;
4. The Media being used.
This is how you ensure your agency brings Value Added Ideas to a prospective client.
The Direct Competitor
If you are Dell, then it’s LG or Apple. If you are Target, then it’s Wal-Mart and K-Mart.
“What competitive behavior or situation can we help the prospective client take advantage of?”
Before the advent of Starbucks, who owned 6:00 a.m. – 8:00 a.m. in a 24 hour period?
Who owned 8:01 a.m. – 5:59 p.m.?
Knowing this, Starbucks set about doing so.
In the early ‘80’s who owned the space between Ford, Chrysler & GM and the premium auto manufacturers – BMW, Mercedes, Jag?
Along came Lexus and Infiniti “the affordable luxury” which in the crash of ’87 was a blessing for both, especially for Lexus who rolled out in ’89.
Even today, look at Kia Optima or Hyundai Sonata, a fully-equipped mid ranged vehicle for $20,000. Who’s smiling all the way to the bank?
So look closely at the prospect’s direct competitive landscape. Find out where they could be leveraging themselves or how they can take advantage of another’s weakness or lack of distribution and the like.
Is it possible to find a direct competitive opportunity for all companies?
Unlikely, however, with companies being so close to their own business and limited by their own tunnel vision, you’d be surprised how many times what is obvious to you is downright amazing to them.
The Indirect Competitor
This is the least likely to be investigated when trying to learn a client’s business.
However, this is one of the most fruitful areas to investigate for an agency looking to differentiate itself from competitors.
Scott’s Lawn Care is about making lawns look beautiful. The weather (indirect competitor) plays havoc on people’s decisions as to when to buy and apply the product.
How can you help them with this dilemma?
iPod’s direct competitor is HP. However, you don’t see Apple’s iPod positioning itself against HP.
What does iPod focus on? Style, cool, white, scarce. Each of these is a tangential, intangible and hidden competitor that HP never looked in on.
They (HP) went on price and storage.
Yet who rules the portable music storage waves?
Possibly one of the most remarkable cases of addressing indirect competition came from the Spritzer category.
Wine was boring, beer fattening and blue collar, and hard liquor was just “out”.
The hidden competitor?
Social stigma – hello Spritzer.
Look at the Food Network – part of the recipe’s world. “Fragrant Rose Wine Spritzer – by Rachael Ray.”
Look for the not obvious, hidden, unfrequented or just plain “out there” competitor that would give your prospective client a possible competitive advantage.
As with most analysis of a prospective client’s customer, we’re after key insights (motivations) that if addressed would produce a positive response to our communication.
Focus groups, 1-1 interviews, mall intercepts certainly have a role, however, I’d not be wasting my money on them.
Think about it. As so eloquently pointed out about focus groups by Rick Stone, partner at Lindsay, Stone & Briggs, their strategic and branding “guru”, “people say what they believe you want to hear”.
The Wonderful iPod:
♦ 6 megabytes of memory
♦ 1000+ songs
♦ 6 hours on 1 battery
But who cares?
Maybe those who regard music as sacred as the sacraments.
But, for the average Joe and Jane, will it make me look like I’m “current”, “hip”, “part of the in crowd”?
McKinney, the agency who led Audi to a dramatic rebound through the 90’s and onwards, had a remarkable planner.
In his quest for finding the “real” motivation behind the purchase of premium vehicles, instead of using focus groups, he commissioned friends from around the nation to take pictures of “vanity plates” on Mercedes, Jags, BMWs, Audis, and the like.
Eureka. Albeit the words were different, it was very clear that BMW was about “performance, speed and edge”, Mercedes about “status, societal judgement and privilege”, whereas Audi was about “individuality, exploration and independence”.
Now think of a focus group of Mercedes’ owners being asked “what adjectives come to mind when you think of owning a Mercedes?”
“Privilege. Better than You? – Questionable at best.
Instead, German engineering! And there they threw their hat in the ring.
Just look at when the joint business of Daimler Chrysler introduced the 300C – 347 hp, well equipped, GPS and a slew of other amenities sedan.
Status? Unlikely, not against the likes of Porsche, BMW 7 Series, Rolls Royce. This is a $39,000 list priced automobile. Since when is status so cheap?
Yet, the salesman kept promoting; “Lots of Mercedes inside”.
Price it at $60,000, say the same thing, and you may get converts.
So look for the “real” motivations, not the cleaned up versions and you’ll have the key to stimulating consumer action and a very interested prospect.
The Media Used
One of the most telling things about a competitor’s advertising is the media they choose to communicate their sales messages.
And again, look for what they or the competition are missing.
A Media Director, David X (you’ll know who you are) who has spent years with big shops like DDB, working on accounts like Busch and having to sell to the irascible August Busch himself.
Recently his agency pitched a Blind manufacturer. Their largest competitor, Hunter Douglas, owns 80%+ of the market. TV, the principal medium used by the competing agency, was flat out not working. Why?
The key target (woman 25-55) only watched TV between 6:00 p.m. and 8:00 p.m. prime time. (that’s what the other agency bought) and 7:00 a.m. – 9:00 a.m. early morning (also bought).
However, no one at the competing agency dug into the real “Mary” (coined name for this customer) recognizing that she was watching very specific early morning and prime time programs, based on one motivation – “staying current”.
Therefore, it wasn’t the early news, it was Katie in the Morning. It wasn’t E.R., it was Oxygen.
Hand in hand with the media goes fully understanding the motivations behind the viewing habits of the consumer one is reaching, not just the day parts.
Also, look at placing a client where others won’t like Target’s agency – billboards outside of Wal-Mart; BET (instead of Vogue), TV Land instead of USA, Tech TV instead of Discovery Channel. All did wonders for Target’s traffic even though they did not initially line up with standard GRP criteria.
Also look at CPLs (cost per lead). In the case of TV Land the CPL is 30. Home & Garden is 100. This is what marketers want. Reduced CPL while ensuring efficiency and you have it made, for a while at least.
The new model to marketing is not how much you can spend, it’s how strategically you spend it.
The big boys like Wal-mart, J&J, Ford are starting to realize this and are challenging their agencies to raise the “strategic” bar.
An agency’s real opportunity lies in thinking like the client, living a client’s life and demonstrating a keen understanding of what plagues and stimulates clients.
And possibly the best truism in the business of marketing is, “you’re only as good as your last performance”.
If the incumbent fails to live this lesson, opportunity knocks for all who bother to do so.
A true competitive advantage can be achieved by any agency taking a close look at how contemporary the incumbent’s thinking is in terms of the direct and indirect competition, the consumer, and their media choices.
And knowing a company’s real customer’s motivations will allow you to literally rip apart a competitor’s media plan – unless of course, they’ve also read this. Then, it’s two Olympians going head to head and may the best win.
Louws – CEO & Founder
About the author:
Over the past 34 years, Toni Louw has trained, coached and consulted with over 480 Brand advertising, promotion, direct marketing, digital, interactive, social, media and public relations agencies worldwide. This has also included over 50 of the top 150 brands internationally.
Toni has recently re-constructed and updated, for 21st Century business application, 18 different business critical subjects that has made Louws one of the most ubiquitous leader of innovative performance based training, coaching and consulting services worldwide.
Click on the link provided: Agency New Business Acquisition© for more information on New Business Acquisition Consulting, Training and Coaching.