What Competition?As a freelance copywriter, I've noticed that my clients are of two minds when it comes to briefing me on their competition.
On one end of the spectrum are clients who seem not to acknowledge competitors. They give no background information on their competitors when briefing me for a copywriting assignment and don't seem enthusiastic about my asking for a list of competitor Web sites to visit.
On the other end are clients whose marketing strategy revolves around knowing what the competition is up to at all times and continually differentiating against it. They give me thorough briefings on competitors that include Web sites, competitive analysis, product samples and tear sheets of promotions.
This begs the question: Should you obsess over competitors, or is it safe to ignore them and focus on the unique value your product brings to the market? I find that the importance of acknowledging and addressing competing products in your marketing depends on four factors:
Price. When I write a direct mail package to sell a book, I usually focus on the content and benefits of the book I am promoting, not on proving that my book is best or the only one the reader should buy on that subject.
People who buy books on a nonfiction topic typically buy many books and other information products on the same topic. Therefore, it is necessary to persuade them to buy yours. But you don't have to persuade them to buy only yours, or to not buy other titles.
Rule of thumb: The lower the product price, the more likely the customer is to buy many brands, titles or models rather than restrict himself to just one purchase in that category.
Product category. A friend of mine loves expensive designer leather bags and always seems to be buying a new one. People who buy leather bags don't need leather bags, of course: You can carry your stuff in a plastic or paper bag. They buy because owning a fine leather bag fills an emotional need, perhaps to feel stylish or wealthy. Because emotional needs are constant and never totally satisfied, the buyer never can own too many bags, and you can promote your leather bag as the next one to buy.
On the other hand, we bought a fancy dog cage for our new golden retriever pup a year ago. You only need one dog cage. You probably only have room in your house for one dog cage. Therefore, if you buy my competitor's dog cage, I won't be able to sell you mine.
Marketing channel. Recently a colleague was promoting one of those expensive marketing boot camps that have sprung up en masse on the Internet lately.
In the online channel, one of the most effective promotions is an affiliate deal: people with e-lists reaching the same market you do promoting your product to their lists for a percentage of the revenue. But my colleague found that no one with good affiliate lists would promote his boot camp. They were doing their own boot camps, and they thought his was direct competition.
If your primary channel is online, your competitors' e-lists may be your main method of promotion, and they may not accept you as an affiliate if your marketing attacks their own brand.
Marketing position. If you are the leading brand, with the greatest market share and brand recognition, you may not have to worry much about differentiating yourself from competitors. This is especially true if the rest of the market is fragmented among many smaller rivals, none of which has an established brand or significant market share.
But if you are No. 2 or lower in a market with a clear No. 1, you probably have to spend time and money differentiating yourself from and selling against the market leader.
Competition plays the most pivotal role in marketing when there are two or more major players in a product category where the customer will buy yours or your competitor's product, but not both. A case in point is enterprise software for a major application, such as a firewall. Usually, the IT buyer is aware of the leading brands. And most networks probably need only one firewall, so if he buys Brand A, he won't buy Brand B or Brand C.
In such cases, you can assume the potential customer knows about all the product choices available. In your marketing, you have to make the case for your model over other models he can choose from.
Many enterprise software marketers do this by creating sell sheets specifically to show the advantages of their product over a major competitor, with a different sheet addressing the weaknesses and disadvantages of each competing brand.