What You Need to Know is How to Delight Your Customers
If you are Coke, Pepsi, Wal-Mart or Target, knowing your competitor well may be important. These BIG B2C (Businesses selling to end Customers) companies are selling commodities. Knowing more about your competitor who looks a lot like you and is selling almost the exact same things you are selling to the exact same customer you sell to may be helpful. In the case where the customer is buying commodities, they know what they want to buy, they are clear about the buying experience they want and have decided what they are willing to pay – competition matters.
This B2C world is highly competitive with lots of margin pressure from buyers who understand what they are willing to pay for. The only thing the buyer needs from you is your price and the availability of the product – anything else is a frill.
Now what if you are not Coke, Pepsi, Wal-Mart or Target do the same rules apply? The answer is almost ALWAYS NO.
If you are a small, midsized, high value, Intellectual Property enhanced business partner or any other organization that sells products or services enhanced by value that makes the buyer better off or a B2B (Business selling to other Businesses) company selling anything other than a pure commodity the answer should be NO. If any of these describe you then you have ONE goal.
Your ONE goal is to delight your customer and if the customer is a B2B customer the goal is to delight them while making them more money.
All this conversation about knowing our competitors ends up with companies looking like their competitors with minor (from the buyer’s view very minor) differences. We become what we think about and focus on, so we become our competitor with a different logo. To the customer we have commoditized ourselves and our market to the point we are all pretty much the same and we want to do that WHY?
One of the best examples of customer focus that results in DELIGHT is Apple. They actually spend a much smaller percent of their budget on R&D than other big players. They are not busy trying to be like their competitors only better. Apple spends their time thinking like a customer and solving problems for the customer – many of the problems Apple solves are problems the customer could not imagine had solutions. What is the result? The result is customer DELIGHT, a long-term relationship and Apple is the most valuable company in the world.
Almost no one truly delights their customer! When delight does occur, the world broadcasts how cool that is. Just think about the books about Apple, Nordstrom’s, Disney and the few other organizations that deliver delight.
Business is hard no matter what your strategy, or market or your offers in the market. Since it will always be hard why not put your effort into what will result in the biggest possible win for you and your customer?
When you spend your time learning about and focusing on your competitor, you look like a commodity, which is hard, and normally risky, marginally profitable and joyless – maybe you should consider spending the same effort on how to delight your customer.
When you delight your customer, your world will get easier. The customer who trusts you will help you delight them, they will pay you more for delight (ask Apple) than for the commodity, your team will have more fun, you will be adding value not just selling stuff and maybe more important, when you delight your customer you and your company experience not just more profit, but delight.
Stop worrying about competitors and they will start worrying about you. Start delighting your customer and they will start helping you.
It is your choice where you focus and what you get. You might want to remember competitors NEVER buy anything from you so who should you concentrate on?
Rick,
This is a complicated topic with multiple answers (my opinion).
Building an organization that can enter and sustain hyper growth or double digit growth typically requires:
• Ongoing Innovation
• Strong Differentiation
• Long Term Competitive Barriers of Entry
• Deep Brand Awareness at Influencer and Decision Maker Levels within the Market
Whether a company should focus on its competitors, or its customers, or innovation and differentiation really depends on the perspective of the person (or team) that you are dealing with inside the company.
For example, over the years we have:
1) helped many companies develop and deploy innovative products/services/go to market models who had lost over 30% + of their market or customer base because they had taken their eye off the competitive landscape and their competitor innovated when they failed to do so.
2) helped many companies enter hyper growth by focusing on what they do, how they do it and making their internal systems and approach to the market scalable and repeatable (turning their systems into best practices) enabling them to enter hyper growth.
3) helped many companies develop closer relationships with their customers in order to not only delight the customer but to have the customer base help them to define their unique value proposition and core areas of differentiation that the company could then turn into a system and way of doing business that eventually created a high barrier to entry within a customer or market place.
In my mind, the question around “do I focus on my competition… or not” depends on what the individual’s or team’s span of control is (that you are working with) and the executive team’s understanding around where the company is positioned in the market and is the company having issues due to a competitor’s strategy or offering.
Now, typically most sales teams lack the “span of control” required to rapidly change how their employer innovates or establishes differentiation at a product or corporate level.
So if your working with sales teams I would agree with you that they should not get wrapped around the axel worrying about what their competitor is doing (unless the average sales person’s win ratio has decreased dramatically – then the entire company has a bigger issue). What the sales team can do is provide competitive intelligence and customer input and feedback to leadership and the product/service teams and they can develop differentiation at the customer level by enhancing their own sales approach and making it more value added/consultative/industry specific.
If your part of an executive team or a CEO/COO/CSO/CMO/CTO you should be concerned about competitors, their tactics and what the competitive landscape is within your markets because that’s your job and it falls within your span of control.
But I would also say that innovation, differentiation and customer satisfaction (or delight) is within that span of control as well.
The question a CSO/CMO must ask themselves is what can my company do well today and what should I be focusing on in order to move the needle of performance and revenue/profit growth?
Meaning:
1) If the company is capable of rapid innovation and creating highly differentiated products then focus the sales team on evangelizing and selling those products to the right target customers or building our various routes to market and alliances in order to crush the competition. I wouldn’t have the sales and marketing teams worry to much about what the competitors are doing but I would have the executive team survey customers and do market research to identify any disruptive models or offerings being developed.
2) If the company struggles at innovation and has a difficult time differentiating its self then have the sales and marketing teams survey the customers, find out what makes your company unique (why customers are buying from you) and get the customer’s input on what the competitors are NOT doing for them that they are in need of. The executives should take that feedback and optimize the company’s selling and go to market approach while they are waiting for the product or service groups to develop new offerings. (Again, no need to focus heavily on competitors but the executives should be watching the market and surveying customers – staying close to the market).
3) If the company struggles with poor service or support and cannot effectively deliver what is promised or if the company is losing customers because of a new disruptive product/service offering from a competitor then perhaps a deeper internal and external market analysis is needed.
Anyway, I can go on and on (as you know) but in my opinion the question depends on:
1) The span of control if the team you are working with
2) The executive team’s understanding on where the company is positioned in the market
3) The executive team and sales team belief that the company is losing customers due to a competitor’s strategy or offering.
Mark
Mark,
I love the thinking you applied to this to help everyone see all sides.
Thanks,
Rick
Rick and Alice, while I agree that delighting customers should be the focus, we must differentiate ourselves in the process. Thus, as Geoffrey Moore states in Crossing the Chasm and Dealing with Darwin, differentiation exists when a company has gone down a path far enough that its competitors either can’t follow or won’t follow. So to achieve differentiation which is critical in today’s B2B and B2C marketplaces, we must know our competitors well enough to choose which path and how far down it we must go. Apple knows exactly which path and how far down it must go to differentiate.
Charlie,
You picked one of my 2 favorite authors. While I love Geoffrey’s work my observation is that some of the things he wrote were true in the bubble at the end of last century but may not be as true in today’s reality.
It is not clear how Apple does it after Jobs but with Jobs he was passionate about thinking like Wayne Gretzky and going to where the customer really wanted to be (even if they didn’t know it) without much consideration for the competitors other than to prove them, their business model and thinking wrong and customer focus right.
You got me thinking – thanks.
Hi Rick,
I couldn’t agree more. Stop worrying about your competitors and start delighting your customers. Use your time and energy to figure out ways to to turn your satisfied customers into loyal customers so competition is not a problem. Here’s an article that gives you some tips on that. http://smartsalestips.com/2012/07/17/6-ways-to-go-from-satisfied-to-loyal/.
Alice
Alice,
Thanks for the feedback – my guess is you can help organizations delight their customers.
Rick