Best Practices in HR
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Roy Osing
  April 28, 2015

#Marketing to keep “the bad guys” out is crazy

Traditional marketing is preoccupied to a large extent by erecting barriers to competitive entry; how to prevent competitors from entering someone’s market and poaching their customer base.

Competitive analysis dominates the agenda; detailed studies that examine as many dimensions to a competitor’s strategy as are possible are conducted; the results are used to plot a counter strategy.

This emphasis on trying to keep “the bad guys” out just doesn’t make sense.

1. The knowledge gained is about THEM, their strengths & weaknesses, the markets they focus on and the value they offer. While resources are consumed by this activity, attention is diverted from learning about existing customers.

If you must worry about anything, worry about your loyal customers leaving as opposed to the competitive hordes breaking down your gates.

2. The insights gained from this analysis force reaction. “Here’s what we need to do to respond to what we believe they intend to do” drives strategy building. Being proactive and creating value for current customers should dominate your marketing agenda rather than spending copious amounts of time developing a defensive strategy to protect yourselves from the competition.
A competitive-prompted move can, as well, cause you to move away from your strategy resulting in lack of progress and reduced performance.

3. At the end of the day, it doesn’t work. A hungry competitor will always find a way of entering your markets to compete with you. You can’t stop them. At the very best you might be able to delay them, but in so doing you waste a significant amount of resource that could otherwise have been used to focus on what you need to do to prevent your customers from leaving.

4. A preoccupation with keeping competitors at bay is counterproductive to creating a customer focused culture. Which do you put first: what your customers’ desire OR what the competition is doing?
The requirement to leverage legal and regulatory tools takes priority over getting people to spend their time learning about what customers want and creating value that will WOW! them and convince them to stay.

The telecom industry is a good example of spending an inordinate amount of time and money trying to restrict competition in former monopoly markets. An enormous amount of time money was invested in a time consuming and expensive regulatory process with a predictable outcome.

Competition was permitted with rules benefitting competitors to ensure customers had an alternative to the local telco. Return on investing in the “keep them out” strategy = 0.

I am not suggesting that you shouldn’t pay attention to the competition, existing and potential. But don’t get obsessed about preventing them from doing what is reasonable given free market conditions.

If they have an opportunity with your customers, expect them to make a play but respond by consistently delivering unmatched value; give them strong reasons to stay.

Make it so difficult for your competitors to steal your customers away from you, they will retreat and go elsewhere where “life is easier”.

Build barriers to customer exit; it’s not about the competition.