Is Your Brand Indispensable?

Two years ago, who would have thought Coke and Energizer could ever be cast aside by retailers?

Well – it’s happening.

Costco recently announced it was no longer selling Coca-Cola products as a result of a price battle.  CVS is dropping most Energizer products and will only carry Duracell and its private label.     Following this trend, Wal-Mart continues to move towards its product mix goal of one top brand, one value brand and its private label.

Costco is betting people will continue to come to Costco and buy alternatives to Coke.  CVS has used its customer shopping data to predict a minimal sales drop if they no longer sell Energizer.

What should all businesses take away from this?

Few brands are indispensable to the customer. In fact, you know your customers could find a pretty good alternative if you were no longer in business.

So what can you do to become as close to indispensable as possible?

Know your customers

• Why do they choose to buy your product/service?
• What do you offer them that they can’t get anywhere else?
• Why do they buy from your competitors if you aren’t available?
• What do your competitors offer that you don’t?
• How are they using your product or service?
• How do they use your competitor’s product or service?

(These questions can be easily answered through one-on-one interviews and quantified through online research.)

Know your competition

• What are they offering that you don’t?
• What makes them unique in the market?
• Do they partner with other companies?

Upon learning about your customers, develop service offerings that they can only get from your company.  Some ideas could be:

• Guarantees
• Special hours
• Rewards programs
• Loyal customer specials
• Packaged service offering
• Something extra every time they do business with you (for example, a local Chinese restaurant gives you an extra appetizer as their way of saying thank you)

Why no mention of lowering prices on these lists? Making your brand indispensable is not about price; it is about creating value that your audience can not receive anywhere else.

How are you creating value to make your brand indispensable?

Post your comments so others can learn from what you are doing.

RedBox Succeeds With Blue Ocean

First came Blockbuster movie rentals and its counterparts.

Then, as videos gave way to DVDs, Netflix reinvented movie rental with its monthly subscription service.  Its pitch was simple: DVDs delivered right to your door with no late fees.

Now, Netflix and others are evolving that model and delivering movies right to your computer or TV.

So how can a company succeed by making people drive to pick up their DVDs again?

RedBox has found a way, by finding Blue Ocean – a new way of thinking –  among the crowded Red Ocean movie rental industry.

In this case, RedBox knew there was an opportunity in DVD rentals outside of what the biggest players were doing today. The key was finding a competitive position that would meet an unmet need.

So RedBox started using Blue Ocean thinking for DVD rentals, just like Netflix did a few years ago.

RedBox is a series of self-serve kiosks located at very convenient locations like grocery stores, drug stores, etc.  You can grab a movie after you do your regular shopping.  A RedBox rental costs $1 – with no late fees – and you can return your DVD at any RedBox location.

RedBox took this Blue Ocean approach and changed the game based on some key consumer insights.

1. Consumers don’t want to wait for their movie in the mail. Movies are as close as the nearest RedBox, located in the places people already frequent (so they seem even more convenient).
2. Consumers don’t want to pay subscription fees. RedBox lets you rent on your own terms and timeline.
3. Consumers don’t like late fees (confirming Netflix’s experience).

As an added bonus, RedBox lets you reserve your favorite movies at the most convenient location through their website.

RedBox results:  147% growth last year; 105% growth the year prior.

Now is a great time to think about your business and determine what you can do differently from your competition.  Costs to implement any changes are lower than they’ve been in years and the manpower and mindpower is available.

What Blue Ocean thinking can you apply to recreate your industry?

Market Share is Not Recession Proof

I was reading the Three Minute Manager in the March 30 issue of Fortune magazine. The first question asked to the CEOs of Staples, TD Ameritrade and Head of Global Customer Strategy for Bain & Co was “Is it really a good time to go after market share” and their answers were a resounding “yes”.

Most of your competitors are in the same place you are – focusing on revenue and expenses.

You may have gone through your first, second and maybe even third round of cost cutting.

The last thing on your mind is market share. You figure your competitors are most likely cutting their marketing budgets so things should remain status quo except for the one or two weaker competitors who go out of business.

Since when is status quo okay for business?

A recession – especially a deep recession – is the best time to increase market share since it is significantly cheaper to stand out compared to your competitors who may no longer be marketing.

Think about share of voice – similar to market share but determined by your share of media impressions.

For example, everyone in your industry spent a total of $10,000,000 in advertising last year. Your ad budget was $1,000,000 giving you a 10% share of voice.

This year your industry’s ad spend is only $5,000,000. If your budget remains at $1,000,000 you grow your share of voice to 20% thus taking a more dominant role in your industry without increasing your cost. That increased share of voice leads to greater awareness and ultimately more prospects. (Sorry, but it is still up to you to close the sale).

If you reduce your budget by 25% to $750,ooo you are able to achieve a 15% share of voice – thus spending less, yet achieving a greater impact than the $1,000,000 investment made the year prior.

By continuing to market your company, you can actually gain market share more cost-effectively and be in a stronger position when the economy rebounds.

But you have to continue to market because if you stop marketing – even to your customers – someone will take your share of the market.

It is your job to market frugally, but not so much so that it is ineffective.

Here are some things you should consider to hone your marketing effort:

• Look at what tactics are having the greatest return on investment. (A previous post on tracking speaks to what you can do to know what marketing tools are working best.)
  • For example, if you are in a service industry like plumbing, HVAC, etc, the thought of cutting Yellow Page advertising is terrifying, so move slowly by cutting your ad from a spread to a single page and track the changes.

• Continue to aggressively pursue inexpensive ways to market to your customers.
  • Email newsletters
  • Service reminders
  • Phone calls

• Implement a customer referral program

• Look for affiliation marketing opportunities.
  • For example, if you belong to your local chamber of commerce, provide all other chamber members a discount on your products/services.

• Volunteer/Donate services – the free publicity will help you reach a broader audience

These are just five ways you can market smarter so that you can gain market share while it is cheaper to do so.

We hope you’ll use the comment section to tell us how you are gaining market share during the recession.

Check Out Your Competition’s Web Analytics

 Sorry about another quick post this week, but I came across a service that has me very excited.    It is called Compete.

Compete is a website that allows you to not only track your company’s web analytics but also check your competition’s web activity.  It does so by gathering information based on IP traffic.  

Compete’s subscription service is pretty robust and can run anywhere from $200 – $500 a month , but even using its free tool you can still get a lot of information like:

• monthly visitors
• monthly unique visitors
• average page views
• average time per visit

This is not a perfect science but it is pretty close.  I compared the web analytics of some of my clients with the data received by Compete and it was off by about 5% – 10%.  So while it is not the end-all in web analytics, it is a great tool to help you monitor trends.

For example, if your competition launches a new ad campaign you can track any upticks in its unique visitors to measure the impact.  More important you can see what type of comparative impact it has on your site.

Compete also provides you frame of reference.  You may think having 5 web page views per visit is a good number, now you can see if it really is and map out your plan accordingly.

Understanding your competition and having an industry frame of reference are key tools to being a better marketer and now Compete.com helps you market smarter.

Google Alerts – A Small Tidbit Before Thanksgiving.

Every business wants to know what their competitors are doing and while it is difficult to know everything they are doing – Google Alerts helps you discover what they are doing on the web.  You can receive daily alerts when your competitors’ names show up on websites, news articles, blogs, etc.  

To provide the best results you should use quotation marks like “M Is For Marketing” so you are not receiving updates on everything with the word marketing in it.

While this is certainly, not the only competitive reconnaissance you should do, it does provide interesting information to see where your competition is and who is talking about them.  Which, in turn, helps you market smarter.