How to beat market leaders, steal customers
Product benefits don’t beat market leaders
Category benefits are a poor substitute to beat market leaders. Instead, you need brand meaning and brand definition. Category benefits are a major pratfall and trap. A sure fire bet to promote the market leader is to define your brand by such benign promises. 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 defend share.
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 market leaders, 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). Also, hotels like Marriott, Hilton, Holiday Inn, Choice Hotels, and Courtyard all promise comfortable beds and more space to stretch out.
Supermarkets all promise fresh food and great prices. Mutual funds all promise expertise and perspective. In addition, 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. That is, a market leader wants competitors to squabble over minimum category benefits. Who is poised to take share from The Bahamas if every tropical destination promises blue water, palm trees, nightlife, and interesting culture? 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 market leaders
Brand managers and marketers confusing brand equity with product benefit is the reason for this lack of brand identity. You will never steal market share as long as you define your brand with efficacy and category descriptors.
Therefore, you must think differently. Your brand is how audiences make 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 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 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.
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 are 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. Simplicity helps you beat market leaders.
Often, we at Stealing Share rail against market segmentation. This is because most of the segmentation is based on an inside-out perspective and 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 give 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.
That’s no way to beat market leaders.
Segment To Your Advantage
Base real segmentation on a clear understanding of the precepts (beliefs) of your target audience. Segment the market by what your customer believes to be the immutable laws that define who they believe they are. If brands exist to make life simpler for them, than it is no stretch to see that your most coveted customer wants purchase decisions based on the least amount of information needed. Anything more than that is complexity.
They seek a brand that tells them that people like them choose it. If you have that brand, only then can you beat market leaders.
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 definitions of a beer. You had better taste good, be refreshing, lead to good times and be cold to even exist.
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.