Losing strategies from AT&T, and Target Stores

Tom Dougherty, CEO – Stealing Share

18 August 2016

Losing strategies from AT&T, Target Stores

Is AT&T any better than Target Stores?

You know a brand is failing when it gets desperate to find new customers and keep its current ones, often by reducing prices. It’s the last gasp of brands in markets where brand meaning is ineffective and often similar across the board. 

That’s what has happened for both cell phone carriers and retailers. Two cases in point: AT&T and Target Stores.

AT&T Target stores

AT&T is in defense mode…

AT&T is doing away with overage fees for data plans, instead reducing the speed of data customers receive if they go over their limit.

AT&T is hoping customers will opt to buy bigger data plans or simply be satisfied that they are not getting unexpected fees.

AT&T is following in the footsteps of both Verizon and Sprint, who have similar processes. (Although Verizon actually charges for what it calls its Safety Mode.)

This is a defense tactic. And once you are in defense mode, your brand message isn’t working.

“To steal market share, especially if you are not the market leader. You need to be different and better than the market leader.”

Target Stores aren’t doing any better, and maybe worse.

Then there is Target. CEO Brian Cornell told investors that it will double down on the second half of its brand promise: The Pay Less section of “Expect More, Pay Less.”

Target stores

…and so is Target.

Great. That means Target, which saw a dip in sales of 1.1% last quarter, will reduce prices (and, therefore, margins) to compete with Walmart.

Which already owns the “Save Money, Live Better” space in retail.

One thing retailers like Target have not learned is that, if you copy the market leader, customers will default to that market leader because market leadership becomes the only reason to choose.

You see that strategy all the time in many markets. Someone takes market leadership with a unique claim and everyone in the industry follows suit, thinking it’s a winning strategy for them as well.

But that’s not how it works. To steal market share, especially if you are not the market leader. You need to be different and better than the market leader. You have to present yourself as a true choice.

AT&T could hold onto its customers with a better brand message than “Mobilizing Your World” because that’s just a definition of its category.

If it had something more meaningful, then reducing data speeds to eliminate overage fees wouldn’t need to happen. It would already have true preference.

Same with Target Stores. Give customers a reason to prefer you, not just put your thumb in the hole of a collapsing dam.

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