Since joining the “business world”, I’ve noticed there is a big value in beating the other guy. You just can’t afford to lose. Whether it’s because your execs understand beating a rival better than your numbers, or just a matter of getting the brand presence to control a new market, you’ll find the winning formula is being different.
Easy Ways to Differentiate
Be first to enter a market – Does it matter if the first store that shows up in your town is a Walmart or a Target? Well if both of them are able to offer good first customer experiences the first one in town will have a huge advantage. When you’re second you have to pay more for your first customers than the guys who showed up first. If Walmart is first, and I go there and it is a good experience… I’ll probably keep going back. If Target opened up across the street, I’d still go to Walmart unless Target somehow talked me into shopping them. (Coupons, Grand Opening Sales, Lower Prices, Better Quality…. all these things require communication… which isn’t free.) Now in a retail situation there are other factors such as location and national brand value… but in a conceptual context (all other things being equal) the store that is first is best because to the customer ignorance is bliss.
Be first to enter an emerging market with a quality product – So who owned an Apple product in 1999? And who owns one now? The MP3 player wasn’t a new idea, but one with 20GB of memory was. Enter the iPod the greatest thing ever invented for music super-listeners. (Those people who actually have 20GB of music that they listen to.) The memory combined with a clean design and most importantly a very easy to use music management tool was by far the highest quality product in the emerging market of MP3 music. When you’re the first to do something that is quality, you become the flagship brand of the market. Since 2000 Apple has continued to follow this strategy of finding the emerging market and building the product that is by far the highest quality customer experience. (not that I’m in love with Apple but seriously, iPod, iPhone, and iPad are the first real players in their category and are the standards by which others are measured)
Don’t be a copy cat - When you’re the second brand someone hears about doing something… well how do I say this… while you’ll get a good ROI and some form of repeated success… you’ll have also just become the Burger King to someone else’s McDonald’s. The first brand gets the press and the initial customer praise for the idea. But only if you copy what that brand does do you give them the most valuable thing they could possibly earn from being first. When you copy what another brand does, you declare them the winner, the innovator, and the better of the two of you. Being the only company that does something is cool… but it’s nothing like being the company that customers identify as the innovator who leads your brand category. Every leader needs a follower, don’t be the follower in the market.
Pick your battles - My mother used to say that to me all the time, but it took reading it in “The Art of War” to realize what it means. When you get a chance to win big (don’t follow this thinking when gambling) you need to go all in. When you are first, when you are truly best (listen to learn if you are), and when others are publicly chasing you… that’s when you fight with everything you have. When you’re the one chasing… don’t waste your resources on it, 3 months later you may need those resources to get something you can lead off the ground.
Now while I know that the above may seem like the same basic lesson over and over again, it is. Be first if you’re going to be there at all.
Thanks for Listening,