As a b2b marketer, I am always excited when my product team releases new offerings and product enhancements. Every release introduces new features and benefits that separate us from the competition and provides more ammo when we go to market. Of course, without competitive analysis and research how would you know how to prioritize features or how to develop your marketing strategy? No matter which way you slice it, competitive intelligence is necessary for us to successfully do our jobs. The insights gained from competitive intelligence allow us to truly realize what our competitive advantages are and exploit them to the fullest.
Before even delving into competitive intelligence research and analysis, I think it’s important to have a fundamental understanding of what elements actually embody “competitive advantage.” The advantage you have over your competitors can be realized by asking a few simple questions. The answers to these questions will allow you to make critical business decisions that put your product planning and marketing strategy on the path to success.
Quick note: You will notice that none of these questions refer to technology. Adopting new IT and other business technologies can increase efficiency and free up time to for your entire organization to focus on product innovation, marketing optimization, and customer service. Technology is a critical component to the success of any business and should serve as the backbone to the operations of your entire organization. Its use can certainly increase your competitive advantage if you are quick to adopt and smart to execute. Thus, the use of technology should be considered whenever you think of optimizing your business.
1. How rare is your offering?
I think rarity is a topic that’s not heard enough when identifying differentiators between you and your competition. The more rare, or scarce, your offering is to the market, the less resistance you will face from competing products. Also, as a marketer you may have the opportunity to define terminology and easily become a thought leader in your newly defined niche.
At Compete we enjoy this advantage all the time. Our offerings don’t necessarily fit in local web analytics tools category, so we find ourselves constantly referring to terms like competitive intelligence, audience measurement, and online market research. (Proceed with caution here because sometimes the market may not grasp your new terminology. I recommend letting the market dictate your terminology. You can easily find this information by conducting brief research or a survey).
2. What value does your offering create?
With a crafty value proposition and clever marketing messaging, new customers are sometimes generated with ease. Although your customer acquisition numbers may be impressive, your ROI and LTV (lifetime value) could be in serious jeopardy if you fail to live up to your promise. As marketers, it’s our obligation to live up to the features and benefits we claim and work with our product managers to ensure our clients perceive the product as “valuable.” Value doesn’t have to be a monetary figure. If it saves time, increases efficiency, or makes your clients look like a rock star within their organizations, I think you’ve done your job.
Wondering how to even arrive at a value metric? Identify a segment of your most loyal customers or super users and ask them what they like most about your products. Chances are you’ll find that perceived value is not far from reach by analyzing your responses for similarities. Don’t only focus on the positive either. Negative responses can lead to ideas for enhanced product features that can create value.
At Compete, our value proposition is simple. We’re able to provide our clients with the full picture of their marketing ROI by providing data and insights from our panel of 2 million online consumers. Without metrics and performance data from outside your local analytics set, it’s nearly impossible to determine true business performance and efficiency.
3. Are your clients able to generate earnings through your offering?
Appropriability (ability to create earning through) is quite different than value. Your clients may find your product valuable, but are they able to attach an ROI to actually using and paying for your product or service? If your offering can help clients generate revenue, increase brand awareness, generate leads, etc. then you can help them measure ROI. When a positive ROI is realized, you essentially create, lock in. and increase the likelihood of retaining those clients. If an existing client wants to consider one of your competitors, an even larger ROI would need to be realized in order for a move to be considered.
Compete has a wide variety of products and services. We have over 1000 clients, many of which are able to attribute ROI directly to our products. For instance, we have multiple search marketers that use Compete PRO to determine search traffic trends and paid and natural search keywords for a particular competitive set. Without analyzing competitors’ search data, they are unable to determine if they are over spending or under spending on a particular campaign. A few minutes of analysis can easily save them thousands of dollars or uncover new revenue generating opportunities.
4. Can your offering be copied?
Imitation is certainly a sign of flattery. Some of Compete’s tools and services allow you to uncover the marketing strategies of your competitors. Analyzing these strategies can help you gather best practices and optimize your own strategies. With the unavoidable transparency provided by the Internet, it’s inevitable that some of your strategies and product features will be copied. However, it’s important that your product’s core assets or competencies are secured and difficult to duplicate. At Compete we have a panel based data methodology that is at the core of all the products and services we offer. To keep this methodology safe, we have secured multiple patents on the technology we use to collect consumer data.
5. Are your products or services easy to access?
The first thing most of us think when we hear the word mobility is having an offering that’s optimized for smart-phones and 3G internet access. Although having a mobile strategy is critical for almost any business, mobility really refers to how easy it is to access your offering. For instance, if your business is offered through a desktop application, that probably isn’t as optimal as a web based application that can be accessed from any computer. If you sell products online, you probably want a mobile enabled website or a smart-phone app so your customers can easily access your products to compare prices while on the go.
6. Can it replace another resource and provide value and then some?
Social networks like Facebook, LinkedIn, and Twitter make it easy to build our personal brands, stay in touch with friends, participate in discussions, and keep us updated on news and events in real time. However, keeping multiple personal profiles updated and participating in many networks at once can be time consuming and complex. Hootsuite serves as my solution to this problem. Hootsuite allows me to see and update statuses from all of my social networks in one application. When I update my status I can post it to all of my networks at once. Most days I never even have to log in to the actual networks. As an added bonus I can review stats about my updates like clicks, retweets, mentions, etc. Hootsuite has essentially replaced my use of social network interfaces and also provides aggregate stats and reporting. So much so that I am willing to pay them $5 per month.
Think substitutability when you’re developing your next product or marketing strategy. If your offering can replace a resource (hopefully a competitor) and provide added value you will certainly create a competitive advantage.
By asking these questions when considering new product ideas, developing a go-to-market strategy, or creating your next marketing campaign, you will hopefully realize that you are in a better spot competitively than you thought. If not at least you should now have enough insight to develop a plan to help you kick some competitor butt. In conclusion, there are six elements to creating competitive advantage: rarity, value, appropriation, imitation, mobility, and substitutability. I hope you found this information useful. Please comment, add feedback, or include examples of how your business is creating a competitive advantage.
Drew is responsible for strategy and execution of marketing initiatives for Compete.com, including affiliate, blog, email, lead generation, paid search, and social media. Before Compete, Drew worked for office supply giant, Staples, Inc. where he had the opportunity to manage multiple online marketing channels for Staples.com, including affiliate, SEO/SEM, and comparison shopping engines. Follow Drew on Twitter or link him on LinkedIn.