We all tend to get a tad myopic when it comes to our particular categories of expertise. Our brains are imprinted with the complete insider's road map, with all of the associated jargon, acronyms, reputations and rules of thumb of a battle-worn soldier. It is all too easy to find oneself disconnected from the way consumers view the marketplace. The ante is raised in a recession since we're all fighting for a share of a wallet that isn't growing. But who exactly is our competition? This is an important question because it frames a marketer's world view, how we apply our limited resources, and the manner in which we react to changes in the landscape.
Certainly we all know our direct competitors-- the list of players that sell related products and services at similar price points. We know the leaders, the second tier challengers, the upstarts, and the fading stars. No doubt, it is highly important to track the behavior of this group, the shifts in tactics and strategy, product development, etc.-- not only is it vital to measure up head-to-head with the right comparative advantages, it's also critical to be tuned into what our customers are seeing.
But we also know that there is an entire world outside of our category that affects our prospects for success. After all, most consumers aren't disciplined enough to rigidly categorize their household budgets akin to the way we segment the market... "this is my clothes money, this is my new car fund, and this is my going out money..." It's more likely that most people operate off a fairly fluid household budget-- with perhaps the greatest deviation separating must-haves (e.g., mortgage payment, school tuition) from the nice-to-haves (new laptop, gym membership). So in reality, if we're both targeting the same household, on some level we are all competitors, regardless of what we sell. This is an easy dynamic to accept at face value, but it's rather unactionable in the abstract. We are tuned into competition with direct competitors... the world of winners and losers in a defined space. But how do I keep up against... everybody? How and where do I address that in my marketing plan?
I think we have to go back to examining the purchase process. For illustrative purposes, let's throw up a generic purchase funnel. I know many regard this particular tool as antiquated-- frankly, since no purchase process or consumer is quite the same, there can really be no perfect model anyway. For example, the braintrust at McKinsey recently drew up a new model, dubbed The Consumer Decision Journey, that resembles a loop that actually grows bigger prior to becoming smaller-- this after reportedly researching the purchase behavior of some 20,000 people. While that theory makes as much sense as anything, I'll refer to this classic model for purely illustrative purposes.The basic premise is that there is some kind of trigger that ushers a would-be consumer into a purchase process. There are, of course, people that do nothing but study how to manufacture these types of "triggers," but putting that aside for a minute... this is the stage where consumers become aware of the choices available to them. The theory is that over the course of this process, which can take anywhere from 3 seconds to 3 years depending on the category, a consumer acquires more information that breeds familiarity, allowing them to formulate opinions, a consideration list and, eventually, a hierarchy of preferences. The consumer then shops their preference(s) and consummates the purchase, at which point they enter the ownership experience, which ideally will produce loyalty that will draw them into repurchase at a later date.
If we believe this, then we'd have to also believe that there are various questions that need to be satisfied along the way for the consumer to advance to the next stage of this process, such as:
So I think the question one has to ask themselves is: Where am I engaging my prospects? I currently work in the restaurant business, and like other industries many in my tribe automatically start at the middle or even lower in the funnel-- we assume anyone we talk to is in the market to dine out now... and to be fair, statically this is a good assumption since more than 90% of consumers surveyed report a restaurant purchase in the previous 30 days. So the theory goes, people have to eat, with the overwhelming majority dining out at least a little, so let's get right to competitive advantages and deals, mano y mano with my direct competitors.
And while there's obviously a huge role for this kind of focus in a marketing plan, this is also, undoubtedly, the most vicious and contested area of the battlefield-- where all brands go to fight. And I can't help but wonder why, as marketers, who are ostensibly trained in the art of differentiation, why we don't spend more time and resources at the top of the funnel. I mean, by the time consumers reach the theoretical consideration stage, haven't the criteria largely been defined by our competition? And another thing, isn't the whole point of a "funnel" that the playing field gets smaller farther down in the process by way of hefty consumer and brand attrition? If so, one could argue that there are more fish-- albeit not all qualified-- at the top of the funnel, and thus potentially the opportunity to circumvent the bloodbath further along in the process.
I suppose this is just the age-old branding vs. retailing/selling argument. How much time and resources should I invest against defining my worth to a broader audience, where I am competing against a virtual universe of consumer choice versus the resources I invest selling to consumers who are actively shopping my category? Heck, do I have what it takes to create the process trigger in the first place? I think that's the ultimate shot at creating new customers streams, and defining the rules of engagement in the purchase process. But in doing that we step out into the real marketplace, the world outside of our competitive set where consumers make daily trade-offs among products and services of all stripes.
Let's go back to my category. As a restaurateur, who am I competing with at the top of the funnel? A hair appointment? Savings to be applied to a future family vacation? The electric bill? A car wash? Dry cleaning? Isn't that what real people are debating when they think about whether to go out and eat?? Makes sense to me. Yet with the possible exception of fine dining you rarely see restaurant companies engaging consumers at the higher levels, where they are still sorting out their needs-- as in, why should a person dine at my restaurant now rather than divert those resources to these other things? What need can I tap into? Perhaps...
- Time away
- Romance
- Stress relief
- Awakening of the senses
- Laughter and frivolity
- Conversation
- Family bonding
- Social status
None of these necessarily involves a deal, and it gives me an opportunity to offer a trigger that can steer the purchase process into areas where my restaurant holds a competitive advantage, allowing my natural brand strengths to be aligned with the needs I have identified. They allow me to steer the fat part of the pie into a mini purchase funnel of my own creation, so perhaps it ends up looking like this:
Crude drawing aside, the idea here is this trigger of my own creation, invented by tapping into a need against a broader world of consumer choice, has the potential to circumvent the bloody purchase process of my competition, and accelerate a consumer to my restaurant because they have entered the purchase process on my terms. I think no matter the economy, a company with designs on superior growth tracks must put resources against this type of activity.
So for example, a Mexican restaurant can certainly run ads in places showcasing a new combo meal or outdoor fire pit or something, but why not invite a consumer with dreams of traveling to Mexico to experience the next best thing?
T.G.I. Friday's can certainly fight it out for cash-strapped casual dining consumers with its "Right Portion, Right Price" campaign, but why not also a call out to the woman who hasn't had a rejuvenating girls-night-out in months because the bar scene is so disappointing?
Or I just loved this guy drinking what looks to be Sonic float-- grabbed it from a Jet Blue online promotion actually, but it could have been a premise for a great ad. So many things in life are beyond our control, including the lot you draw in the coach section. So grab something in life that you can control, like the happiness that is the always enterprising Sonic menu.
In a recession, I think the middle/bottom funnel "sellers" win at most companies, hands down-- those wishing to allocate at least some marketing resources towards tapping into core consumer needs, with the goal of creating purchase triggers leading to new streams of customers, are on defense. We hear, marketing needs to "work harder" these days, which is code for making deals and direct, brass tacks selling points. Additionally, the discussion is generally dominated by reactions to the behavior and activity of direct competitors. I really believe this is a zero sum game that too many companies play, and causes the entire category to move like sheep. What insiders see as major lines of distinction... "but we offer fries at $1.99, and ours come with ketchup AND ranch!" ...to consumers it all looks ordinary and forgettable.
So my point? My point is I think we need to spend appropriate time thinking about our indirect competitors at the top of the funnel, addressing the questions that customers pose at this stage of the purchase process. I think we need to exit the myopia of our direct competitive set from time to time and look at our offering with the fresh eyes of our consumers-- not only does this avoid engaging in category groupthink, but it allows us some respite from the margin-crunching world of throwing discounts at a finite group of shoppers. I believe these will be the companies poised to leave the pack of sheep in the dust when this great recession finally subsides.
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