Tag Archives: competitive advantages

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.

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Filed under Brand Position, Competition, Marketing ROI

RedBox Succeeds With Blue Ocean

RedBox KioskFirst 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?

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Filed under Competition, Innovation

Reduce Customer Credit Card Usage. Increase Loyalty.

Reduce Credit Card UsageCredit card usage is a key component in creating customer loyalty, from earning frequent flyer miles to rewards points.  In today’s economy can you increase loyalty by encouraging your customers to use their cards less?

A few weeks ago I wrote about the importance of keeping pricing consistent and instead adding value.  This is important because cutting your pricing may impact your ability to recoup a higher margin for an extended period of time.

But in today’s economy, the pressure facing companies to provide discounts on their products and services is strong.

So what can you do to encourage consumers to purchase your product, remain loyal to your brand and keep your price consistent?

Change your model – by giving your customers the incentive to pay another way.

The average company pays between 1.5% and 5% in credit card service charges. If you have $5,000,000 in revenue and are paying 3.5% in service charges, up to $175,000 of your bottom line could be going to the credit card companies.

While you may consider this a cost of doing business, what if you encouraged your customers to pay by cash, check or bill pay by putting 2.5% of their bill (based on the 3.5% noted above) into a loyalty account for them to use towards future purchases?  You would still come out ahead by $50,000.

Such a program provides many consumer benefits:

  • Reduces their cost on future services
  • Does not increase credit card debt (according to IndexCreditCard.com the average consumer household is carrying a $10,640 balance on their credit cards)
  • Saves money by not having to pay interest on credit card purchases
  • Provides value for products and services they already use

Your company benefits as well:

  • Reduces transaction costs (thus benefitting the bottom line)
  • Increases customer loyalty
  • Provides unique point of difference

A recession is great time to change how you do business without changing your business.

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Filed under Customer Marketing, Marketing ROI, recession marketing

Walgreens Stops Inertia

WalgreensWalgreens challenges people to reconsider their habits by giving them a reason to rethink their drug store.

Today Walgreens announced that through the end of 2009 their Take Care clinics will provide basic tests and routine treatments to people who are unemployed or uninsured.

While the success of this program won’t be noted for some time, the fact that Walgreens is providing something of value to thank their loyal customers and to attract new customers is the type of marketing that should pay dividends for them in the long run.

This program brings Walgreens’ customers back to Walgreens instead of shopping elsewhere for cheaper services or not shopping at all.

Additionally this program helps attract new customers by giving them a reason to choose Walgreens instead of just going to the same place they always go.

As marketers we know some of the greatest challenges rarely come from another competitor, they come from inertia and the difficulty in changing someone’s habits.

Walgreens has created a reason to change habits and it could provide Walgreens with some easy, incremental revenue.

So to determine if this program is worthwhile let’s look at some conservative numbers:

  • Take Care Clinics have served 1.2 million customers since November 2005 or an average of 400,000 a year. 30% (or 120,000) of their customers were new to Walgreens.
  • If Walgreens can capture a 10% increase in new customers from this program it would equal 12,000 new customers.
  • For this program to make money all those 12,000 new customers would have to do is purchase $60 worth of merchandise over the course of a year to cover the $59/per visit gross cost.

Walgreens has created good will among its new customers who, in turn, will likely become regular customers of Walgreens not to mention the PR value this program provides.

So why should you care?

In today’s tight economy people are being forced to rethink their lives. This disruption creates the opportunity to consider new options and if your company can provide them with a new option that satisfies their need, you can gain a new customer.

The question is what are you doing for your target audience so that you can change their habits?

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Filed under Uncategorized

Check Out Your Competition’s Web Analytics

Compete 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.

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Filed under Competition

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.


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Filed under Competition