Wednesday, April 20, 2022

You’ve Woken Up the Customer!…and the Competition!

 In a recent post, I discussed marketing plans that fail to account for buyers’ habits, i.e. our target market segment’s predilection towards repurchasing, re-contracting for the same old products and services they have before. It’s like they’re in a hypnotic trance and we need to snap them out of it. Somehow, we need to figure out a disruption to that habit. (This is why a business owner’s customer list is not really an asset past 30 days of selling the company. “New management” is the disruption.) Once the disruption happens, our potential customers can rethink the decision they made some time ago to buy from our competitor.

Now what? What’s the next move?

Either through different pricing, promotion, location, features, etc. we’ve shown our target customers a competitive advantage. This may or may not cause them to come to us. As they rethink their purchasing decision—socks, for example, in the previous post—they may not only leave our competition but they may go to an indirect competitor—sandals, for example. 

This is not the only problem. We forget our competition are sentient beings capable of reacting to changes in the market also. Too many companies assume they can strip away one percent, two percent or even 20% the total customers from the competition. And the competitors will do nothing different; they’ll keep the same pricing, promotion, product features, etc. as before. Unfortunately, we don’t put ourselves in their position. We don’t consider the change from their perspective. We might only take 1% of the total market but in a highly saturated competitive field, we might be taking 10% of a competitor’s business. Would you sit back, do nothing if a competitor took 10% of your customers? Neither will they.

Our next move needs to consider the competition’s response. What if they drop prices? What if they increase the warranty period? What if they go on a social media blitz? What if they disparage us in press releases? What if they deny those customers some other product or service bought from the competitor as part of the extended product/service line that compels the customers to stick with the competition? What if they finally roll out the Version 3 prototype they’ve been working on? What if they move next door? What if they bundle other products or services in the core offering? Our strategy needs to have a menu of contingencies, anticipating our “woken” competition’s moves.

Therefore, the marketing strategy is not just phase 1 but should also include phase 2 after the competition sees what we’re doing.

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