David Ogilvy tells us, “Study the methods of your competitors and do the exact opposite.” He was an avid supporter of doing homework on the competition to identify white space.
Jeff Bezos, on the other hand states, “Obsess about customers, not competitors.” Which also rings true – if you know your customer, you can address their needs better than any competitor.
Both stress different sides of the same coin: be informed. However, the most comprehensive approach would be to both study your competitors AND your customers.
Now that COVID-19 has turned the world on its head, businesses have shifted. Companies are playing in completely different competitive sets and have entirely different customer sets. They need to be informed of their existing competitive and customer set AND beyond.
At ENGINE we’ve seen truly savvy clients acknowledge these needs, and through our Accelerated Intelligence team we’ve partnered with our clients to blend those needs to achieve successful outcomes.
Learning from Direct, Indirect and Best-In-Class Competitors
The first step in a great competitive assessment is knowing who you need to know more about. ENGINE helps identify the key players in a companies’ market, even when they aren’t obvious.
Direct: Table stakes competitors are those that are considered direct – the obvious choices. The pizzeria in town that competes against three other pizzerias. These competitors either have the same customers or solve the same problem for customers. Knowing those competitors is a must to stay competitive.
Indirect: However, ignoring indirect competitors or players outside of the traditional competitive set is going to leave important knowledge on the table. For example, the pizzeria also needs to know how delis and sushi restaurants are competing. The deli’s marketing, strategy, and customer engagement all apply to the pizzeria’s business. Learning how your indirect competitors are innovating and meeting your mutual customer base’s needs will only add value to your own business strategy.
Best-in-Class: Direct and indirect competitors will keep businesses competitive, but companies need to dig deeper to get ahead of the competition. The new cupcake bakery in town with lines wrapped around the corner is taking consumer dollars from the pizzeria. Companies must study the accomplishments of the wildly successful to learn best practices and modify, adapt, and apply those strategies to their business.
Customers Remember Experiences from Other Industries
Acknowledging that companies need to understand their competition is vital, but another key element is understanding customers. There is a growing mindfulness of the customer point of view among industry leaders. Customers are commanding more in terms of personalization and experience that meets (and often exceeds) their needs.
As Jeff Bezos emphasises, Amazon did not become a trillion-dollar behemoth by ignoring the demands of their customers. We all know Amazon competes in a wide variety of verticals and while it is important to benchmark to those within your own industry, to understand your customers’ needs, you must acknowledge that the customer brings with them experiences from other industries.
In the same way that we can learn from our direct, indirect, and best-in-class competitors we must learn from our existing and potential customers too.
Existing: Businesses need to meet the needs of their existing customers. The pizzeria needs to acknowledge their regular patrons and continue to meet their needs without significant disruption to their expectations of excellent customer service and top-notch product (pizza!).
Potential: However, in order to gain a new customer base, the pizzeria needs to understand how the cupcake bakery is converting consumers into regular customers. What is driving the customers into the bakery? Product innovation? Customer engagement? Value?
In 2001 Apple was seeking ways improve their customer experience in their retail stores. The Apple team visited a customer experience master outside of Apple’s competitive set: Ritz-Carlton and Four Seasons. After the team studied the luxury hospitality leader, they implemented the following changes: 1) Apple stores would eliminate cashiers and customers would be greeted by a concierge and 2) a bar would be designed at the back of each store where customers could ask questions and gather advice from knowledgeable employees: The Genius Bar.[i]
Stand on the Shoulders of the Winners
More and more clients come to ENGINE and ask about the cupcake bakery. By investigating the bakery, the pizzeria can decipher what is driving their mutual and potential customers to wait in lines and command growth from best-in-class practices across verticals and customer demand.
Companies like Amazon, Wal-Mart and Disney are considered among the gold standard in terms of best practices and customer experience. A smart software company comes to ENGINE to ask, “How is Disney approaching customer engagement?” It doesn’t stop with customer engagement either.
Take a cue from industry titans and review their marketing strategies, training initiatives, customer experience policies, impactful vertical trends, and compelling market drivers that will shape business strategies across the board. No matter the company size or business need, learnings from highly regarded organizations will drive growth and success.
Ultimately, ENGINE can leverage the findings from our Accelerated Intelligence to execute targeted follow-up quantitative and qualitative research to incorporate the voice of the customer from our Customer Experience team.
Want to find out more about our ENGINE AI solutions? Contact us now!