Milena Traikovich helps businesses drive effective campaigns for nurturing high-quality leads. As our Demand Gen expert, she brings extensive experience in analytics, performance optimization, and lead generation initiatives. Today, Milena shares her insights on how a narrow view of competition can hinder marketing success and the importance of redefining your competitive set.
How do most marketers typically define their competition?
Most marketers tend to define their competition narrowly by focusing solely on companies that offer similar products or services. They look at direct rivals within the same industry rather than considering the broader spectrum of choices their customers face.
Why is focusing solely on direct competitors a mistake for marketers?
Focusing only on direct competitors limits your perspective and can cause you to miss out on the real challenges your customers face. Customers don’t necessarily categorize their options by industry; they’re driven by outcomes. Ignoring indirect or alternative competitors means missing critical insights on what truly influences customer decisions.
Can you explain the difference between supply-side and demand-side competition?
Supply-side competition refers to rivals offering similar products or services, essentially the direct competitors within the same industry. Demand-side competition, on the other hand, involves alternatives that customers consider based on the outcomes they aim to achieve—regardless of the industry those alternatives come from.
Can you elaborate on the “Arena” model proposed by Dr. Rita McGrath?
Dr. Rita McGrath’s “Arena” model suggests that companies should view themselves as gladiators in a constantly changing arena rather than fortresses defending against direct competitors. This model differs from traditional views by emphasizing adaptability and the variable landscape of competitors. It highlights the importance of responding to shifting customer needs and emerging threats dynamically.
What lesson can marketers learn from Rachel Chu’s strategy in “Crazy Rich Asians”?
Rachel Chu changed her strategy by recognizing her true competition—Nick’s mother Eleanor and the ingrained social expectations—instead of other women vying for his attention. This shift from competing within expected norms to addressing underlying challenges provides a lesson for marketers: understand the broader context and underlying issues influencing your competition.
Can you provide an example of a company that successfully redefined its competitive set?
Dropbox is a prime example. Instead of only identifying other cloud storage providers as competitors, Dropbox realized that many customers were using USB thumb drives and email attachments as their primary tools for file sharing. By addressing these alternatives, Dropbox positioned itself against the true nature of customer needs and achieved substantial growth.
How do customers decide between different products or services according to the article?
Customers focus on the outcomes they want to achieve rather than specific industry categories. They choose solutions based on how well these options deliver the desired results, which is why understanding and positioning against demand-side competitors is crucial.
What steps can marketers take to discover their true competitive set?
Marketers should start by identifying alternative tools their customers use to achieve the same results, considering options outside their industry. Engaging in one-on-one customer conversations can validate these alternatives and provide deeper insights. Establishing a culture of customer curiosity within the company also helps keep this discovery process ongoing and dynamic.
Why is it important to consider alternatives outside your industry when identifying competitors?
Considering alternatives outside your industry helps you understand the broader array of choices your customers weigh. This expanded perspective allows you to identify potential threats more accurately and position your offerings in a way that resonates deeply with customer needs.
How can a company develop a culture and identity centered around customer curiosity?
A company can foster such a culture by embedding regular customer conversations into its operations. Teams should prioritize understanding customer needs and problems. Establishing processes to continuously monitor these insights ensures that strategies and tactics remain aligned with what customers truly seek.
What benefits does a feedback loop based on customer conversations provide for a company?
A feedback loop centering on customer conversations provides real-time insights into changing customer preferences and emerging competitors. It enables a company to stay agile, adapt quickly, and innovate effectively. This approach keeps the company’s strategies relevant and helps maintain a competitive edge.
Can you discuss an example of a company that stays agile through regular customer interviews?
Intercom exemplifies this approach by conducting regular customer interviews, which helped them swiftly adapt to the emergence of ChatGPT. This agility allowed them to develop a customizable AI customer support agent, staying ahead of the curve while competitors were still using traditional chatbots.
What can the story of Dropbox teach other companies about innovation and growth?
Dropbox teaches the importance of identifying and addressing the real competition—alternative tools customers use daily. This strategy enabled them to innovate effectively and resonate with customer needs, driving significant growth and market presence.
Why is it essential to understand who your customers will replace you with in the future?
Understanding potential future replacements is crucial for anticipating shifts in the market, staying adaptable, and maintaining relevance. If you know your alternatives, you can proactively innovate and position your offerings to meet evolving customer needs, avoiding the risk of becoming obsolete.
What strategies can companies use to stay on top of emerging trends and spot new competitors early?
Companies can stay informed by maintaining close interactions with customers, regularly analyzing market trends, and fostering a culture of innovation. Engaging in frequent, detailed customer conversations and continuously tracking developments in related fields helps spot new competitors early and adapt proactively.
How can redefining your competitive set help avoid common pitfalls?
Redefining your competitive set broadens the scope of your market analysis, allowing you to identify all types of threats, not just direct competitors. This comprehensive understanding helps avoid misjudging rivals and missing out on strategic opportunities, ensuring you remain agile and responsive.
Why is understanding the outcomes your customers seek crucial for effective positioning?
Knowing the outcomes customers seek allows you to tailor your positioning to address those needs directly, making your offerings more relevant and compelling. It shifts the focus from what you sell to what your customers achieve with your product, enhancing your appeal and fostering loyalty.
What similarities can be drawn between Rachel Chu’s journey and modern business strategies?
Both Rachel Chu and modern marketers learn to redefine their competitive landscape by understanding underlying challenges and threats. Rachel shifts her strategy by recognizing the real competition, while marketers can do the same by focusing on customer outcomes and broader alternatives, leading to more effective positioning.
How can companies ensure their strategies and tactics remain agile in a rapidly changing environment?
Companies can maintain agility by regularly engaging with customers, analyzing market trends, and fostering a culture of continuous improvement. Keeping communication channels open and actively seeking feedback ensures strategies remain aligned with current demands and can swiftly adapt to new developments.
Do you have any advice for our readers?
My advice is to always keep questioning your assumptions about your competition. Engage deeply with your customers to understand their needs and preferences, and look beyond your immediate industry for competitors. Continuously adapt your strategies based on these insights to stay relevant and achieve sustained growth.
