How to Steal Customers and beat the market leader

Outsmart and beat the market leader

By Tom Dougherty

Category benefits are a poor substitute for brand meaning and brand definition. It is one of the major pratfalls in brand development and a trap into which many brands fall victim. Defining your brand by such benign promises is a sure fire bet to promote the market leader — not exactly what you have in mind when your goal is to grab market share and outsmart your competition. Look around at the market today and you can see these benign brands wallowing in brand failure and falling back on big budget ad spends to steal share.

beat the market leader
Steal share or die

That’s because few understand that, when everything is equal (and most product benefits are), the market leader becomes the default choice. If you want to beat the market leader, that has to change.

In banking, a service industry, you hear such benign brand claims from Bank of America, Wells Fargo, and Bank One as friendly, trustworthy, professional, and convenience (read: Lot’s of ATMs). Hotels like Marriott, Hilton, Holiday Inn, Choice Hotels, and Courtyard all promise comfortable beds and more space to stretch out.

Supermarkets like ACME, GIANT, SAFEWAY, KROGER, Food Lion, Lowes, PUBLIX and Harris Teeter all promise fresh food and great prices. Mutual funds like NUVEEN, Fidelity Funds, Vanguard Funds, AIM Family of Funds, American Century, Franklin Templeton, Dreyfus and, Oppenheimer Funds all promise expertise and perspective. Logistics providers like DHL, FedEx and UPS all promise on-time delivery, and pharmaceuticals like Merck, Wyeth, Pfizer, and GlaxoSmithKline all promise efficacy.

A Cunning Plot

It is almost a conspiracy. A market leader wants competitors to squabble over minimum category benefits. If every tropical destination like the Cayman Islands, Jamaica, St Thomas, Barbados, St Croix, the British Virgin Islands, Bermuda, Hawaii, and Puerto Rico promises blue water, palm trees, nightlife, and interesting culture — who is poised to take share from the Bahamas? Unless I am mistaken, the Bahamas have blue water, palm trees, nightlife and interesting culture. No wonder “It’s better in the Bahamas” works.  The Bahamas have usurped the category benefits and have successfully positioned themselves against the rest of the pack.

Think Differently to beat the market leader

The reason for the lack of brand identity in our world today is a direct result of brand managers and marketers confusing brand equity with product benefit. As long as you define your brand with efficacy and category descriptors you will never steal market share.

beat the market leaderYou need to think differently. Your brand is how your customer makes sense of the choices that bombard them. At its root benefit (from your customer’s perspective — the outside-in perspective), the value of brand is to make life simpler; to aid your customers in making choices and to better identify the choices that will personally satiate them.

From a marketer’s perspective (the inside-out perspective), the value of brand is to create preference and to elevate (increase) margins. Few, if anyone, would argue with these assessments. The latter is a no-brainer; it is why we invest in building brands, but the former deserves a closer look because all brands must find their power in the acceptance of the target audience that they are designed to influence.

What does it mean when your customer hopes that brands make life simpler for them, aid them in making choices and to better identify the choices that will personally satiate them?

Simple Wins Everyday

Simplification and ease of use is by no means a modern phenomenon but, in an increasingly complex world, your customer does not desire complexity. In general, the brand that makes it easier for customers will win. This is both simplicity in brand promise and the resulting mandatory simplicity in process. Simplicity helps you beat the market leader.

Often, we at Stealing Share rail against market segmentation. This is because most of the segmentation is based on an inside-out perspective and on misleading research that pretends to understand customer usage and attitudes. These so-called studies are excellent when shedding light on product usage but fail miserably when used as segmenting indicators. These studies have given rise to such exciting category offerings in the past as Arch Deluxe burgers and laser discs. After all, those market segmentation studies clearly indicated that adults wanted a “grown-up” burger from McDonalds and movie buffs wanted an LP sized disk that cost $100.

Segment To Your Advantage

beat the market leaderReal segmentation is based on a clear understanding of the precepts (beliefs) of your target audience. You need to segment the market by what your customer believes to be the immutable laws that define who they believe they are. If, from the perspective of your customer, brands exist to make life simpler for them, than it is no stretch to see that your most coveted customer wants to make purchase decisions with the least amount of information needed to make the decision. Anything more than that is not overkill, it is complexity. What they seek is a brand that tells them that people like them choose it.

When we look at some of the biggest ad spend categories, it always amazes us how much money is spent on those undifferentiating category benefits. Look at beer. What the brands sell is taste, refreshment, and fun. Yet everyone knows that to be a beer. You had better taste good, be refreshing, lead to good times and be cold (are you listening Coors?).

This market noise makes a real brand like Corona stands out. None of the sophomoric humor or machismo is found in its brand messaging. No, its brand assumes we know all the category benefits. Corona tells us that its beer is for kicking back and relaxing. Now that is a real brand.