Promoting Competitors

Two years ago I was working on a process improvement project with a global fast moving consumer goods company. We were looking at Marketing, analysing and redesigning a number of areas.

During the project I came across a piece of work that appeared to be promoting a competitor. I brought this up with the project leader and she explained this was part of the strategy.

They were not promoting a single competitor but the whole category. They owned a significant share of the market and when the market grows so do their sales. While the main focus was to increase market share, increasing the market increased revenue.

It made sense to undertake activities that appeared to promote competitors. It allowed them to position themselves in the context of the whole market and allow consumers to make informed decisions.

Not having competitors is a problem

When we started Skore app we didn’t really have any competitors. Those companies we called competitors were really so far away from us it was difficult to describe how we were different, or even the same!

Trying to position ourselves against them took us into use cases we weren’t really suited for. We found it very difficult to describe the problem we solved because people didn’t really recognise it.

It felt like we were trying to create a market while trying to bootstrap a technology. We nearly gave up.

When goliath enters

About a year ago a new player entered the market. They’re a larger team than us, a lot of experience and well funded. They positioned a product about half way between us and our previous nearest competitor.

What’s more they threatened a disruptive new approach that could potentially undermine our fledgling business model.

Our networks largely overlap and they were aggressively going after their portion of it. We were a little nervous and thoughts of quitting were, again, not far off.

Your competitor's marketing spend helps you (and vice versa)

They were putting a lot of energy, and money, into promoting their product and it seemed every other person we spoke to were talking about them. We were trying to hold our nerve but it was hard when people we knew were talking about our new competitor.

But then something unexpected happened. After the first event by this new company we started to receive contacts from people just outside our network. One or two LinkedIn hops away from us.

When our followers went to these events, or spoke with other people about it, they invariably mentioned us. This led to a small, but qualified, surge in interest from one specific segment.

Admittedly it wasn’t a segment we were particularly after but it was encouraging that they came to us.

When your competitor makes mistakes (or you do!)

This company also made a number of delivery promises that they were unable to meet. Aside from making us feel better it also caused some leakage that we were able to take advantage of.

A number of people had waited for them to use on projects. But as the delay lengthened they came to us to fill the gap.

Clarifying your position is the most important thing

The most important thing we have learnt from this story is that having a close competitor makes it much easier to position ourselves.

There are a lot of similarities between our products but they have chosen to do one thing, that we don’t, really really well. And that makes a clear difference for us. It helps us qualify out potential customers.

If a customer comes to us and suggests this thing is important to them we’ll send them right on over to the competition. If we bring it up with a new customer and it’s not a need then we know today there's a good chance we can win in almost every other area.

We have a head start too. That makes a difference. We didn’t realise quite how much until we saw the challenges they faced. We’d been through the exact same things, learnt the same lessons, but I wonder how those experiences will affect our decision making?

We’ve recently iterated our way out of a cul-de-sac. It was a lot of work and another painful, yet useful, lesson. As we’re reversing out of the dead end we notice our competitor coming off the freeway at full speed heading straight on into it.

Once they’ve recovered from the inevitable car crash (which I’m sure they will), they’ll be in pursuit again. We just need to make sure we keep doing things differently, and with purpose, to stay on the road.

I'd love to hear your experiences of dealing with competitors and what you've learnt.

Photo credit: Grocery Shelf via photopin (license)