Category Archives: Sales and Marketing Alignment

Think outside the box and profit from your competition

Creative Competitive Strategies

An in-depth understanding of your competitors – their strategies, behavior, intent, how they make their money, how they view your company – is a competitive advantage that can help you increase your market share and profit.

A great story about deep competitor insight comes from Overseas Shipping Services (OSS) – an Australian moving company specializing in moving people’s household goods internationally.

This story comes from a time when a large part of their market still preferred to find information on moving services in newspapers.

For years OSS had run a small ad in the Saturday paper’s “travel” section, while their competition were advertising in the “moving” section. This was based on a unique insight that people who were relocating first organized their travel before considering a moving service. The ad brought in many enquiries, most of which were converted into business.

One day the team discovered to their horror a much larger competitor’s ad right next to the OSS ad.

They had to consider how to respond so they reached out to some connections. One of the team members had a friend in an advertising business  so she asked him for some ideas. He suggested simply increase in the size of the ad to match the competitor. He said “you are in with the big boys now you need to start spending more on advertising!” An advertising man suggesting OSS spends more on advertising, what a surprise!

Recognizing there probably was not a quick and easy answer, the team decided to step back and ask themselves the following questions:

What do we know about our competitors? How do they compete? What is our competitive advantage? Are we facing a tactical decision or this strategic? How do our customers’ buy? How would they view two alternatives presented side by side in the newspaper?

The advertising team set-up a cross-functional meeting attended by the CFO, sales, operations, pricing, advertising and the call center to get everyone to weigh in on these issues. Here is what they came up with:

1) How to compete: OSS can’t compete with their competitor’s budget – just to match them requires five times its current budget and this will raise its cost structure for this market segment. What’s more, it might force it to reconsider our pricing. Its knowledge of its competitor’s resources told them that they can spend much more on advertising and still hold their prices where they are.

2) Competitors’ advantage: If OSS matches its competitor’s ad size, it will double the size and will keep doing this if OSS keeps matching. This strategy is based on a traditional dominant competitive position. He competes by out-spending his competitors and relying on his brand name to get business.

3)  Customer behavior insight: OSS already knew more about customers than its competition. Another unique insight they had was that customers nearly always get at least two quotes.

4)  What to communicate: Now that OSS is in a directly competitive media situation it will need to change its message to ‘get your second quote from OSS’.

5) How much to spend: Since its competitor was now doing the advertising for this market segment OSS could reduce the size of its ad just a little and save money.

The OSS team were tuned into competitors and customers. They could all agree on the comments being made because of strong customer and competitive disciplines embedded in the OSS culture. They all had a clear understanding of the customer’s buying behavior as well as their competitors’ current strategies and how to effectively compete with much larger organizations. They were basing a decision on clear customer and competitor insights.

The decision was made quickly and the call center and field sales team developed a process to obtain ongoing customer and competitive intelligence relevant to this market segment to monitor the effect of this decision. The results were outstanding. OSS received more enquiries from this advertising than before and converted about 80% of them into new clients with a positive trend in sales growth and profit margins.

This example shows how a small tactical decision can have a big impact on the profit and growth of a business. But more, it shows how a team that is tuned into customers and competitors as the way in which they make decisions can make a good decision quickly.

Does your team operate that way? Can they make decisions that are right for the customer and the business, in the context of your competitive position, quickly and effectively? Do you have that kind of creative, collaborative culture?

Confusing the brand message with what the customer wants

A colleague tipped me off to a branding effort in the financial services industry.  Ameriprise is the former American Express Financial branch which is trying to stake its hold in the consumer finance sphere.  You may have seen their ads where Dennis Hopper clearly speaks to the Baby Boomer generation.

Chronicled in a Star Tribune blog, a young professional wrote this comment:

“Oh goodness, that dreams stuff is just a bunch of tripe. My wife and I were looking for a financial advisor, met with someone from Ameriprise, and the guy just kept asking us about our dreams, which we made abundantly clear wasn’t our interest – we wanted to talk numbers and percentages, but this guy just kept blabbing about the dream book.“It’s probably fine for less-than-financially-literate boomers, but they’ll need a different approach if they want to get in early on the 25 and under crowd…” 

Seeing their ads on TV there’s no doubt the company is shooting for the Boomers who (1) identify with the rebel spirit, (2) are focused on financial results over the specifics of how they’ll get there, and (3) are about to retire.  Fair enough, that’s good marketing:  clear targeting and positioning.  But I wonder about this sales rep who wouldn’t change his tune when this younger, financially-savvy customer showed up.  Why didn’t he change?  Are Ameriprise uninterested in the under 25 age segment? Was the sale person unable to adapt the message? 

Translating the brand message into a sales message can sometimes be challenging particularly if there is not good alignment between the brand message and a certain customer segment as it appears to be in this case. A good sales person should be able to translate the brand message or value proposition into customer terms and adapt to what the specific customer in front of them is saying. In our training course, “Creating Effective Value Propositions,” we work with clients to identify the range of segments that may respond to their product/service and to develop a multi-faceted set of value messages that speak to which ever customer comes through the door. I am sure Ameriprise would benefit from our course as it requires the marketing professionals to think deeply about the type of customers they have and how to address their specific needs.  Although as a non-Baby Boomer, Dennis Hopper’s thoughts on the power of dreams does not resonate with me, I am sure it could be a powerful message for its intended audience. The question for Ameriprise is how do they more effectively manage their unintended  customer segments?