Further to my previous blog on Power of Recession - Favorable or Unfavorable – the next thing came to my mind is – Can we destroy our competition in this period too? Is there an easy way to make the competition irrelevant, especially when there is an easy access to information, bombardment of advertisements and commercials?
What could be the best strategies, arms and ammunitions one can need to help our customers in making easy decision to buy?
During my search, I came across different articles over my topic and also got a chance to discuss with different industry experts. Result of my study was a big document, however to share the relevant information I have divided in to few points - which I believe can help us in making our competition useless.
Below are the points for your review:
1) We must create a differentiation: The best way to move ahead during the recession time is to create differentiation within our own products or services. If we have a range of products or services to offer, we should identify the differentiation on the priority basis. For example: Products can be differentiated based on size, color, components, combinations or accessories. However differentiations for services include performance, quality, responsiveness, availability, ease or integration.
2) We must focus on the Moment of Truth: The moment of truth is the moment that the customer has an option to make a purchase decision, to buy your products, invest in your services or hires you. This is the moment that you need to put your good, better and best foot forward.
For example - In a retail environment this may be the end-cap, a wall display, shelf space or a counter display. Over Internet this may be an on-line store, e-bay or our personal web site. It could even be part of an email communication.
3) Follow Thumb rule – Provide Good, Better and Best: The best approach would be to provide our customer three options. Show them something good, show them something better and show them our best. Though it may sound simple formula – It takes a little care and creativity also while crafting our message.
We should be able to clearly define our values, the features, benefits and advantages of what we have to offer. Even if we have hundreds of customized solutions or products, we should select and present these three options. Study shows that - In the decision process, human beings can easily compare and contrast three options. Their mind can juggle three prices and three sets of features for a quick and easy decision process.
If we give too many options to our customers, then they will need to spend more time to consider the alternatives, and while they are weighing our multiple options they may start to consider the competition as well.
4) Add the Value Proposition: For better success of our efforts, we have to provide a value proposition for each option that we present to the potential customer. Our value proposition should be something that can be conveyed in three to five bullet points, three to five sentences, or spoken in forty seconds or less. Our message should be precise and succinct and covers customer point of view also.
For example, rather saying "Delivery process may take 3-5 days ", we can say "the product will typically arrive at your door in 3-5 days".
A value proposition typically contains the essential elements of Feature, Advantage, Benefit, Image and Offer. This is a reference to a specific important feature of our offer, the advantage as compared to the competition, and the benefit to the customer.
5) We must Plan, Do, Measure and Adjust: Best strategy to win the game is to plan our offers and the value proposition carefully. Once we introduce our three offers measure the success rate of each option by the corresponding sales rate (This can be done with the help of market research, analysis of reports etc).
The Key is - as long as our customers continue to make a selection between our options and the value propositions, the competition is irrelevant and can be destroyed easily. Our customers can get what they want, and they will remain our customers!!
What could be the best strategies, arms and ammunitions one can need to help our customers in making easy decision to buy?
During my search, I came across different articles over my topic and also got a chance to discuss with different industry experts. Result of my study was a big document, however to share the relevant information I have divided in to few points - which I believe can help us in making our competition useless.
Below are the points for your review:
1) We must create a differentiation: The best way to move ahead during the recession time is to create differentiation within our own products or services. If we have a range of products or services to offer, we should identify the differentiation on the priority basis. For example: Products can be differentiated based on size, color, components, combinations or accessories. However differentiations for services include performance, quality, responsiveness, availability, ease or integration.
2) We must focus on the Moment of Truth: The moment of truth is the moment that the customer has an option to make a purchase decision, to buy your products, invest in your services or hires you. This is the moment that you need to put your good, better and best foot forward.
For example - In a retail environment this may be the end-cap, a wall display, shelf space or a counter display. Over Internet this may be an on-line store, e-bay or our personal web site. It could even be part of an email communication.
3) Follow Thumb rule – Provide Good, Better and Best: The best approach would be to provide our customer three options. Show them something good, show them something better and show them our best. Though it may sound simple formula – It takes a little care and creativity also while crafting our message.
We should be able to clearly define our values, the features, benefits and advantages of what we have to offer. Even if we have hundreds of customized solutions or products, we should select and present these three options. Study shows that - In the decision process, human beings can easily compare and contrast three options. Their mind can juggle three prices and three sets of features for a quick and easy decision process.
If we give too many options to our customers, then they will need to spend more time to consider the alternatives, and while they are weighing our multiple options they may start to consider the competition as well.
4) Add the Value Proposition: For better success of our efforts, we have to provide a value proposition for each option that we present to the potential customer. Our value proposition should be something that can be conveyed in three to five bullet points, three to five sentences, or spoken in forty seconds or less. Our message should be precise and succinct and covers customer point of view also.
For example, rather saying "Delivery process may take 3-5 days ", we can say "the product will typically arrive at your door in 3-5 days".
A value proposition typically contains the essential elements of Feature, Advantage, Benefit, Image and Offer. This is a reference to a specific important feature of our offer, the advantage as compared to the competition, and the benefit to the customer.
5) We must Plan, Do, Measure and Adjust: Best strategy to win the game is to plan our offers and the value proposition carefully. Once we introduce our three offers measure the success rate of each option by the corresponding sales rate (This can be done with the help of market research, analysis of reports etc).
The Key is - as long as our customers continue to make a selection between our options and the value propositions, the competition is irrelevant and can be destroyed easily. Our customers can get what they want, and they will remain our customers!!
7 comments:
Varun, thank you for directing me to your blog through LinkedIn. I appreciate your thoughtfulness relative to the current economy and business practices to ensure profitability in otherwise tough times. I would also recommend to you and your readership a book by the name of Thinkertoys. It's a fantastic read for anyone who is interested in ameliorating their product/service offering to the market to ensure that theirs is the company that rises through the economic downturn as an industry leader.
Excellent blog. I'm a firm believer in grassroots marketing. Yes, getting out in front of potential customers takes tremendous effort but still can be focused to minimize resources necessary to undertake this effort. The competition is usually too lazy to do anything beyond the norm so your efforts will become unmatched providing another great opportunity to destroy the competition.
Great post Varun. Keep up the good work!
Found your blog through Linked in. Great Blog, great ideas and if I may say, almost stating the obvious.
It is quite sad that 'we' try to complicate the process by giving options, or hiding truths or by not displaying real value.
I think the way to win in the recession is to go that extra mile (sorry cliche I know) but by focusing on the customers needs, only providing options that will truly benefit them and by spending the time to know your client can you differentiate from your competition.
Keep up the thoughts Varun, this is excellent.
Is it really necessary to destroy the competition in order to succeed? Today, tomorrow..
I think only when you focus on perfecting what you do best can leave your competition behind, no matter how fierce it may be. Too many thoughts on how to actually destroy it cannot take you a long way. The more competitors, the better...
Varun: I agree that recession is favorable but like you said sometimes, i say in certain cases. If a company is enjoying a healthy current ratio when recession hit, has a strong brand loyalty amongst its cutomers, and is well organziaed from within, it can create havoc for the competition thorugh a price war which may be couched pleasantly as special discounts or promotion schemes where middlemen as well as consumers find it rewarding to buy in times when buying desire is under checks and controls.
However, before launching into that competitor-wipeout atrategy, the company must have a good assessment of future, the likely duration of recession, and the strength of its punch whether it will knock out or emasculate the comp. This means a strategically planned maneuver.
that was my two pence. Hope it serves.
Good Luck.
Strategy, Change Management Consultant
http://www.linkedin.com/in/anismotiwala
Though I agree with Mirjana and James, in my opinion, it's more like a chess game. You are to be aware of all the possible moves of your competitor, when it comes to serious competition. Of course, a SWOT analysis of our own company will provide us more insight towards our strengths and weaknesses. Meanwhile, it is also good to know the strengths and weaknesses of your competitors. This would be an on going business as it is very rarely seen that a competitor moving totally away from the Business, even if there is an immediate loss. After all, even their strategies will be driven by similar people like us.
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