Every mature market experiences rising competition that carves off specialized pieces of the leaders’ established footprint. It’s how Southwest, JetBlue and others brought the major traditional airlines to their knees (and bankruptcy). For social networking leaders, the great fracture is upon them. Those of us on the front line are left to pick networks and tools.
Facebook has run away with the race. Twitter, LinkedIn, and a host of smaller social networks have taken their seats behind the leader. Yet as time continues, more and more niche networks like Tumblr, Instagram, shiny object du jour Pinterest, Reddit and others carve off their piece of the pie.
The phenomena of so many social media choices has moved from creating to social media fatigue for the most faithful to full-on overload. Even the most tech savvy people find themselves making tough choices.
Posted on: December 12th, 2011 by Geoff Livingston 3 Comments
Marketing extends beyond stakeholders and organizations. Although companies and nonprofits like to pretend they operate alone in an industry, competition exists even if its just for the stakeholder’s time and money. If a marketer does their job well, and the product, service or solution is met with a warm reception, invariably the competition responds.
Moving forward, there are some common competitive responses that you can expect. Here are five of them:
1) Pretend You Don’t Exist
This out of all the responses is the most short sighted and foolish response. The ostrich approach — at least publicly (they certainly talk about you behind closed doors) — kids no one. Customers know there are alternatives, and so does the media and bloggers.
No one thinks the company or nonprofit operates in a vacuum, so when your competitor acts like that, it causes them look, like, well, marketers. It doesn’t mean anything other than people view communications from their organization to be completely transactional or brand related. Customers are less willing to trust them.
Further, it’s hard to develop industry leadership when a company doesn’t acknowledge the ecosystem, even in a general way. Apple rarely talks about HP or Dell, but it certainly acknowledges and talks about other PCs and smartphones. Car companies discuss industry accolades, which is smart, because it puts their product within a competitive context.
2) Copy Your Offering
When a company does really well, a common competitive response is to ape the product and offer the same product or service, often with less success. After Amazon launched the Kindle, Barnes & Noble offered the Nook. When Cirque du Soleil revolutionized big top entertainment, other circuses stole elements from their shows like the ribbon dance.
Holding first place is a very strong position for long-term success. In a strategic sense, first is the position of high ground. It’s always good to have established market share when this happens, but it can still be quite disconcerting.
There are instances when a company like Netflix or Google rises up and wrestles the market away, usually through some sort of technological innovation. Sometimes companies are caught in a price war.
The key here is to not necessarily over-react to the competition. Rather, to continue innovating on the product or service offering and extend market leadership. Don’t rest on your laurels.
Google recently purchased Motorola Mobility to acquire its patents in an effort to strengthen its case against Apple, who is suing the search giant for copying the iPhone iOS with Android. Other common hardball acts include talking poorly about the competition publicly, privately, stealing (er, hiring away) their talent, blocking distribution, and undercutting pricing to seize market share.
These are the tactics of war in the market. You have to be able to defend against them, not necessarily with direct engagement, but certainly by responding with value to your customers.
While these tactics are inevitable, they almost always make the market harder to work within, and can reduce customer trust sector-wide. These tactics do not grow the general market in any obvious way.
4) Go Toe to Toe
In an established market like car insurance where offerings are very similar from company to company, it is not uncommon to see advertising that directly positions a company against its competitors. This is a common tactic that Sprint takes with Verizon and AT&T with its data and service plans.
There’s not much you can do here other than to clearly state why your product is better than their’s and to engage in customer service and loyalty programs. This is about avoiding customer churn by bettering your total experience.
In the competitive wireless market, Sprint is a distant third currently, a gap that has increased over the past decade in large part because of the customer service issues the company experienced after acquiring Nextel. Having resolved many of these issues, it is now struggling to rebuild that marketshare. In a highly commoditized market, non product specific points like service can make a great difference.
Last, but not least is when a competitor responds by offering a product or service that is significantly higher quality, more cost effective or easier to use than yours. While you might have the higher ground, this type of innovation in a new offering creates green fields for your competitors. Customers flock to them.
Consider how Japanese companies beat their U.S. counterparts in the electronics and the automotive sector in the 70s and 80s by offering higher quality products for lower costs. The result was incredible losses of marketshare and reputation. Google beat Yahoo by offering a superior search algorithm.
In this instance, speed is critical. Loyal customers will stick with your brand, but only if you are able to match or better the offering quickly. Unfortunately, when faced with a paradigm shift, most leading companies fail to respond, comfortable in their way of doing business. And thus new brands seize market leadership.
What are some common responses you see from competitors?
French company Atos became the latest tech player to declare the end of email, calling it pollution and banning it from its corporate walls. Tech bloggers bagged the move, but in reality, it’s an increasingly familiar proclamation. Basically, the tech industry wants to replace email with the next generation of messaging.
In the online world, we have seen this trend emerge several times. Most notably, the birth and death of Google Wave was the first big attempt to end email. Then there was the not so successful Facebook Messages/Messenger App.
Invariably, these solutions feature a variety of social media or instant messaging technologies. For example, Google’s integration of undelivered Gmail chat messages into Gmail. Facebook’s Messages does the same thing with chat. It can also integrate text messaging. File sharing and workplace solutions like Dropbox and Basecamp still use email to notify users.
None of these solutions have completely replaced an email address, which has the primary feature of a name and a URL, providing routing on the Internet. And none of them replace the core peer-to-peer or peer-to-a few peers communication that made email so popular in the 90s.
Email is just another delivery method. You can shoot the messenger, but…
Can Tech Eliminate Spamming?
At the heart of this debate is ridding the in-box of trash, spam and other useless email, e.g. weeding out marketing messages. In the case of the workplace, employers are also trying to weed out useless banter (forwarded jokes, etc.). So the target is really us, those marketers who engage in direct email marketing.
Obviously, this makes opt-in lists and great email content even more important. And as future technologies come into the fore and marketing becomes strictly permission based, these twin bills of direct success may no longer be optional for companies. Spam tolerance decreases with each new messaging technology.
Yet if the hybridization of messaging succeeds eliminating the IP address portion of a digital message, won’t marketers find a new way to get into the next generation in-box? Historically, spam and bad marketing transcends medium. We have certainly experienced that with social media.
What do you think? Will a next generation technology replace email? Will it eliminate spam?
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