Competing on Value

Knowing your competition means being aware of what offerings they provide that do or will compete with yours. It is critical to understand your competitors’ price versus benefit position, or value position, as it relates to your own.

A straight-forward exercise that you can do with your team is to plot the position of your business along with the competition on a “Fair Value Matrix”. Measure benefits along the X axis and price along the Y axis. Now plot your relative position, along with that of your competitors on this matrix. This will give you a visual representation of how you are positioned and the view your overall marketplace sees.

Critical to the success of this exercise is the use of quality data. When it comes to benefits, I do not mean features. Buyers pay for benefits, not features. Features are product attributes, like horsepower, number of channels, RPMs, color, size, and shape. Benefits are the meaningful outcomes produced by such attributes like speed, flexibility, durability, efficiency, and appearance. Many products have features that provide no benefit because the buyer does not need or want them. How many of you, remembering VCRs, had a need, or more importantly, the capability, to record twenty different shows over thirty days on twenty different channels? How many of you found it a benefit to turn on your television so you could read the menu of the VCR when programming?

When you compare your product to the competition, be very careful to look from a buyer’s perspective and only compare benefits people will buy. Do not give yourself credit for additional features that buyers do not want, or worse yet, see as a distraction. Be aware that it is possible to add features that actually reduce the benefit of your offerings.

When plotting your position, and that of the competition, you can use different sizes of circles to indicate the relative size of each competitor. When complete, you should have a good view of your competitive position in the market. Now, the questions to answer are:

  • Does your position match what you thought it was?
  • Is your position where you want to be?
  • Can you be successful in this position?

If you are one of the smaller circles inside or overlapping a major competitor (big circle), should you be re-thinking your position? Is there an opportunity in another position? Be aware that just because there is a hole in the matrix does not mean it is a viable position to be filled. You need to conduct research to make the right determination.

Big Marketing Lesson

Recently I happened to catch most of the movie “Big” with Tom Hanks. I hadn’t seen it in a long time and had forgotten its timeless marketing lesson. In the story, a toy company’s executive team has clearly lost touch with their true business identity, and Tom’s character – an eight year old in a 30 year old body if you never saw it – reminds them by simply being their target demographic. The company CEO appears to understand that they are off track, but the competitive executive team is obsessed with developing new toys without quality input from those that play with them or those that purchase them.

Every day this scenario is played out in business after business. From newly formed start-ups to decades-old establishments, leadership comes to believe that they are the experts when it comes to understanding what their consumers want. The painful lesson learned by many is that the consumers, not the business, are better equipped to understand their own needs.

Few companies really take the time to understand the actual business they are in. In the movie, the company is not in the toy business, but rather in the business of making children happy through toys. That means they must provide a toy that children will want and a parent will purchase at a price that will allow them to make enough money to continue the process. That means they must understand the wants and desires of both the children and their parents and react accordingly. When the company decides they know better, when they decide to generate facts and figures that mislead rather than lead, they fail to maximize their value to the marketplace and all parties lose.

Businesses reach their greatest success when they truly understand what they provide and for who, and deliver such at a price, place and manner that works for both. However, when businesses determine that what they provide is earnings for shareholders, they have completely missed the mark.

Take the time to understand your business. If you think you are in the newspaper business, consider that you are truly in the business of providing news when, where and how people want it. The word “paper” only defines a form of delivery that is clearly becoming obsolete. If you are in the up-scale restaurant business, consider that you are in the entertainment business, and your products must provide such at a time, place, and cost that appeals to the buyer.

Businesses get started because a founder is lucky enough to develop a product or service that a market segment will adopt. They didn’t take the time to understand a real market need, but assumed that due to their development brilliance someone, if not everyone, would want what they had. This method is a form of gambling that is executed on a regular basis, and like gambling, sometimes, but rarely, there are winners.

Other businesses take the time to truly understand a market need and continually develop their product or service around that need. Their odds of success are significantly better because they are not gambling – but rather working with a quality understanding of the value they provide.

Maximizing Trade Show Exhibit Investments

Exhibiting at industry trade shows / conventions can be one of the most effective marketing tools your business employs. At the same time, it can also be the most costly marketing tool (per impression) in which you invest. Most show exhibitors simply show up, stand in their exhibit, collect a few leads, party most nights, and go home.
If your business uses, or wants to use, trade shows and conventions as a tool to attract new business, there are some simple rules that will make the investment far more worthwhile.

Exhibition tips:

  1. Don’t attend industry trade shows just because all your competition is attending. That “herd” mentality costs businesses million of dollars every year, and only puts money in the pockets of the organizers. Pick shows like you should be picking other advertising mediums, by selecting the ones that attract the type and number of people you want to meet.
  2. Pick an exhibit location that maximizes traffic flow. Pay attention to main entrance, food, entertainment, and restroom locations and map out expected traffic patterns. In many cases you need to be a regular attendee, and publication advertiser, to work your way up to the best locations, but if you focus on it, you can improve your positioning.
  3. Build an exhibit that works. The job of a trade-show exhibit is to quickly communicate who you are and why an attendee should stop and talk with you. Far too many exhibits try to do too many things, succeeding only in attracting no visitors or too many of the wrong ones. Think of your exhibit as a quality advertisement. Does it attract attention, does it represent my brand, and does it give the attendee a reason to stop?
  4. Be very careful with gimmicks that draw crowds. From handing out free stuff to hiring performers or celebrities, keep your trade show goals firmly in mind. Are you there to bring home sales leads? Are you there to improve your overall brand exposure? What kind of show traffic do you want? Who do you want? How long will you need to spend with them? If you want a particular type of attendee, and once found will need to spend a good deal of time with them, then building high traffic with non-qualified attendees may work against you.
  5. Take team members that are optimized for show performance. Tradeshows are not party events that your best sales people earn the right to attend. Seldom are your best field representatives also your best show personnel. At a show, staffers need to be able to quickly qualify prospects, moving unqualified folks along. They need to be able to handle one after another, and do so efficiently to maximize the number of quality leads collected. Determine who you have that will maximize your investment and take them.
  6. Set up your exhibit to allow prospects to enter easily. Don’t set up barriers between you and your prospects, like a wall of tables or product displays. The most value gained from your attendance should be personal contact with qualified prospects, so make it easy to engage face-to-face.
  7. Don’t intimidate the prospect by having a wall of staff ready to “pounce” on them. Would you get out of your car at a used car lot if you saw a row of sales people waiting for you to get out? Make is easy for attendees to view your product and information, watch them for interest and then engage them.
  8. Don’t eat or drink while in the exhibit. Don’t have drink glasses or personal food on your tables. Would you bring a sandwich and drink with you to a sales call? Respect your attendees and treat them like you would a typical sales call – professionally. If you need to eat, take time away from your exhibit. If you are the only one working, eat enough before you start and tough it out. Remember that you make an immediate impression on every visitor – and eating and drinking is no the one you want.
  9. When eating at event venues or nearby restaurants, keep your conversation low and non-strategic. Remember that you are sitting next to or near your competition and your prospects. Assume they can all hear everything you are saying. If you are regaling your co-worker with drunken exploits of the previous night, company strategy, or information on a customer or prospect, just expect that you are sharing that information with those around you. I had breakfast one morning at a table next to one of my competitors and listened to them discuss their entire marketing strategy for the upcoming year, including new product information. Not smart on their part, but a clear opportunity for you if you simply take the time to listen to what is going on around you.
  10. Dress appropriately. Understand the dress code for the event and take the time to make sure you and your team could win the most professionally dressed award. That doesn’t mean overdressing – it means dressing professionally. If the event is more casual and most will be wearing golf shirts, then ratchet it up a notch and wear matching dress shirts with company logo’s, etc… If the event is more formal, then dark suits and white shirts are a must. But in all cases, exhibit halls are not a place for flamboyant expression. No loud ties, shirts, or jackets. Your product or service needs to stand out – no you!
  11. Take regular breaks so that you stay fresh. If you see the next person entering your exhibit and you think to yourself – oh no, not another one – you need a break. Trying to solo staff an exhibit for a multi-day event is bound to wear even the best exhibit talent thin. Provide for help and share the load so that you maximize your ability to secure the leads you really want.
  12. Qualify leads while you are there. Most exhibitors spend multiple days securing dozens or hundreds of leads. Then they go back to the office and mail an expensive package of post-show materials to them with a thank you letter. Then a week or two later you start making telephone calls to start the true qualification process – only to find out that most of the leads you were so happy to gather were not qualified. You can save yourself significant time and expense by simply qualifying the leads while you have them face-to-face – taking home only those qualified. You can ask attendees the same questions you would over the phone while they are standing in front of you. If you master this process, you will become far more efficient and effective.
  13. Make it a habit to conduct pre-show and post –show meetings with your team. Pre show it is important to agree upon the goals of the day. How many do we want to qualify? Specific accounts we want to be sure to engage? Specific competition we want to scope out? Dinner meetings we want to arrange? Information we want to learn from attendees? Etc. Then when the day is done, get together with your team and review the day. Did we meet the goals established? What did we learn? What will we need to think about for the next day? If you establish this process, results will be reflective. If you just show up and “staff” you exhibit – results will also be reflective.
  14. Minimize the partying at night. Companies will spends tens of thousands of dollars to provide a quality exhibit, only to be staffed by a sales person that partied all night and showed up so hung over they can barely stand up. I don’t care if you partied with prospects or staff – there is no excuse for working in anything but optimal condition. If you need to stay out late with prospects, don’t drink past a pre-dinner cocktail. Limiting your drinking with prospects is a good rule anyway – and no quality business ever came out of a drunken stupor. And if you are not engaging with prospects at night, go to bed early and prepare for the next day. Conventions are not party venues – they are expensive selling environmentsWalk the hall and learn about your competition or new industry trends. Take the time to engage people you recognize in conversation. Identify prospects you want to make sure you engage when they come by your exhibit. Take advantage of the entire exhibit hall experience. If you show up, work the exhibit and go home – you are missing many opportunities.
  15. Post show follow-up must be fast. If you come home with quality sales prospects, don’t let time pass without follow-up. Coming home with hundreds of non-qualified leads means it is likely it will be months before they are all contacted – with the most qualified leads growing cold in the process. Bring home qualified leads and contact them all in the first two weeks after the event. Plan the follow-up process in advance of the event so you can begin immediately upon return. Or, send home the leads daily so that your office staff can begin the process before the event is over. Nothing impresses an attendee more than returning home from and event and finding the information they asked for already on their desk.

Overall, the convention exhibit world is poorly managed and executed. But in every isle of every event you can pick out the company that took the job seriously. The staff is well dressed and fresh, the exhibit is clean and professionally constructed, and the messaging is well positioned to attract the attention of the right attendees. These are the companies that took the opportunity seriously and will make the most of their investment. The challenge for you is to do be “that” exhibitor at every event you attend.

What is your brand?

Mistakenly, many people believe that their company brand is their logo. When they think about brand development, they think about logos, colors, creative, and advertising. In reality, your company “brand” is the mind impression generated by someone when they are confronted with your logo, name, product, or service. And the mind impression generated by any individual is a culmination of all experiences that person has had related to your company, product, or service. This includes what they have heard or read as well as actual personal experiences.

Your brand is impacted by all you do and say as well as all that others say about you. From media to word of mouth, there is an independent brand generation engine running 24/7, working in your favor or not. Your ability to build a strong brand, and to make it the brand you want is directly related to everything you do to, or for, every employee, customer, or any other person that becomes informed about you.

When you think of strong brands like Mercedes® or Coca-Cola®, you get an immediate mind impression, including a taste impression in the case of Coke®. Some generate a good mind impression because they have had good experiences and / or heard positive things regarding those brands. Others, who have not had such good experiences or have heard less than positive things about those brands, have a completely different mind impression. Some impressions are very strong because there is a significant amount of experience, while some impressions are much less intense.

If you want to build a strong brand for your company, and you want it to be the brand that helps you achieve your Vision, Mission, and Goals, then you need to build that brand into everything you do, say, and cause to be said about you. From your logo to your advertising, products and services, treatment of customers and employees, commitment to your community and country, and overall business vitality, you must be diligent and consistent. If you don’t build your brand proactively, it will be built for you – good or bad.

Are You a Buggy Whip Company?

With the invention of the automobile over a century ago, and the subsequent move to mass transit, the use of horses for transportation of people, goods, and services transitioned from essential to unnecessary. Along the way, many providers of related products, like wagons, buggies, and buggy whips either evolved into businesses that supported motorized vehicles, or they perished. Those that survived realized that they were in the transportation business, not the buggy or whip business. Those that perished thought the reverse.

Currently, the newspaper industry is going through a similar transition. Some see themselves to be in the “newspaper” business, while others see themselves (correctly) to be in the “news” business. Those that are in the news business, and modify the mediums by which they deliver that news to fit the market demand will survive. Those that do not will go the way of similar buggy whip producers.

All companies, regardless of size or age, must understand their business in terms of true market demand. They must monitor the evolving needs of their market and make the necessary adjustments to remain relevant. As simple as it sounds, businesses go under on a regular basis blaming market factors they could have, and should have, predicted and integrated into their strategic plans.

What business are you really in? What will that business / industry really look like in five, and then ten years? What proactive steps will you take to be relevant to your market and stay ahead of your competition?