Monday, January 19, 2009

Throwing Rocks at Goliath? How to Beat a Bigger Brand!

Recently, following a new release of one of our award-winning solutions, which has a solid reputation in the market, but would be accurately labeled as the “next leading brand”, our President & CEO asked me and my product marketing team how we can finally erode the market share of this 800-pound gorilla brand in our space and establish our solution as the number one leading brand – a common and reasonable request! We were up for the challenge!

We know, as veteran marketers, there's rarely ever any magic or luck in getting to the top (ok, maybe a little luck). So, we started working the science of marketing – and we worked hard. We re-evaluated all of our positions and opportunities, using a back-to-basics, proven marketing approach, the essential ingredients of success for every other leading brand. We evaluated our markets and competion, discussed strategy, and developed an action plan. We grinded out what would amount to a winning solution.

To get started, we created a framework which we used to guide our efforts toward successful results. I've listed a few key areas below which you can put to use to support your efforts the next time your feeling like the underdog up against a bigger competitor and you still want to win:

1) Innovate with Your Product: Nothing is more critical to success in toppling a leading brand than “customer-focused” product innovation. Using new technology to invent new ways of solving a problem that significantly helps your customers accomplish their task faster, makes their lives easier, or solves their problems more efficiently creates opportunity. And, if you can find a way to deliver your offering at a more affordable price, you'll accelerate your results. Fortunately, for us, our Agile development team, given the proper case studies, user personas, and a prioritized enhancement list, delivered on that effort! We felt we had the product and feature set we needed to beat the competition.

2) Segment Your Market: Segmentation is a critical component of any marketing effort. With regard to beating a bigger brand, we researched our markets to determine if there was a market segment we could attract a new message that we could use to tap to target a subset of the market. We sought a subset of the target audience that still represented a larger (>60%) portion of the market with a message that had not been emphasized by our competition and a message that mapped to a large portion of the target audience who would be "most likely" willing to purchase a solution in the space. We tried segmenting our market based on our customer needs and desires, by demographics, and other factors to help us identify a winning positioning statement that would give us with a better 1-to-1 marketing message, drive incremental sales, and win the market.

3) Position against the Competition: Positioning against the leading brand is tricky. An overly, negative approach against the market leader will backfire and just come across as a smear campaign. However, you do need to clearly define your position in the marketplace, identify your strengths, and point out your competitor’s short-comings. Obviously, if you have a single, key innovation and new value proposition, your job is easier. But, if your innovation involves a series of new features and functionality, then a information-based competitive chart that is balanced and unbiased, grounded in facts, and does not come across as pure “marketing spin”, can be a successful strategy.

4) Identify Your Brand: Can you really afford a brand? Building brand is extremely expensive. Most technology companies can’t afford to develop a brand, especially in this economic climate. And, for clarity, I mean real “branding”, a brand personality, an image or character that exists in the mind of the consumer which helps them visualize the unique and compelling benefit of a particular product or service. Yes, that’s different from a positioning statement, which is however, a good start to a great brand. It is possible, although more difficult, to beat a leading brand without building a brand of your own! In either case, you definitely want evaluate your existing brand, positioning statement, and personality to make any enhancements and solidify your messaging before going to market, in the event your brand does take off.

5) Tap Hot Market Trends: Tapping a hot market trend is an excellent strategy for gaining a significant amount market share in a relatively short period of time and may even be enough to help you overtake a particular market. The hotter the trend and the more closely you can align your value proposition, the better your results will be. We found early success with this approach with every major trend in the past ten years: linking our desktop software to leading websites at the advent of the Internet, building software-as-a-service (SaaS) applications early, integrating our products with handheld mobile devices, connecting with music and iPods, and more recently with a “going green” campaign.

6) Establish Key Partnerships: Establishing key alliances with related companies in your space is an invaluable way to expand your product offering and reach a broader audience. When seeking partnerships that will improve your position in the market against a leading brand, ensure the partner you select is also a leader of their respective area and the value proposition of their product/service closely aligns with your solution. A partnership that moves your messaging too far from the your original message is risky and may actually hurt your efforts, confuse your messaging, and deliver functionality your customers do not need (and thus, will not buy).

7) Set Aggressive Pricing: Here is the real challenge you face and probably the most critical decision you’ll make with regard to beating a bigger brand. If your objective is to beat the leading brand by offering a lower price in hopes of generating a higher level of overall sales by attracting more users to your solution, then you’ll want to set your pricing lower than the leading brand. However, if you want to be perceived as the market leader in terms of your innovation, product features, and overall market perception, then you’ll need to set your price higher than your competition. Of course, that carries the enormous risk of being killed in the marketplace, "dead on arrival" if you can’t deliver on your value promise and make the sale at a higher price, so you’ll need to choose pricing very carefully.

8) Grow Your Sales Channel: Often, you can win victories against the leading brand by establishing closer relationship with your resellers and distribution partners. Many leading brands come across as arrogant, treat their resellers poorly, and provide minimal marketing support. With the right incentives and promotions as part of a coordinated launch, you can often gain a short-term advantage. And, with broader distribution, if your solution can be found more often by your customers than your competition, your sales will inevitably be higher. Also, there may be new markets for your products through affiliate programs, value-added resellers, channel partners, and distributors who, with the proper motivation, can increase your visibility and broaden your market beyond your traditional markets – channels your competition has not yet exploited.

9) Build a Community: If you have an opportunity and can commit the ongoing resources, one of the fastest ways to increase brand awareness against a leading competitor is by introducing a community around your solution. A well-run community provides a place for your customers to share thoughts and ideas, interact with your company, create valuable relationship with other members, and gives you a great opportunity to build brand. However, unmanaged communities quickly take on a life of their own and there is risk. In some extreme cases, I’ve seen communities turn into a wasteland of unanswered technical support issues and flame message from customers looking to vent their frustrations following inadequate service.

10) Harness Marketing 2.0: When you are “launching” a new product or service, the old rules of a traditional product launch no longer apply. Rather than try to apply traditional outbound, controlled PR messages and assailing your customers with an advertising campaign they’ll likely ignore, you can gain a significant competitive edge against a market leader simply by developing and sharing great content. If you create an amazing piece of content – a podcast, a video, a blog, an email – and make it either extremely funny or especially informative, you’ll benefit from viral marketing and your ideas will spread across the Internet on their own. It is unlikely that the leading brand can either be that creative or move that quickly.

In summary, when going up against a bigger brand, you'll need to be more competitive with your product innovation, your positioning and branding, and even your business processes. It takes an understanding of modern, best-practices in marketing, the right skills, and the commitment to the process to be successful. And, most importantly, you'll need to launch your solution effectively the first time, as you may never get a second chance.

5 comments:

Barry Paquet said...

Hi Matt,
Curious to learn more about #9 (building a community). How much ongoing effort do you think is required to support a product based community. Also, what products or tools have you used to drive this type of initiative? I’m looking for feedback before I embark on a project of my own. Your insight would be appreciated.
Thanks.

Matt Hendrickson Blog said...

Hi Barry,

There are many variables to consider when determining ongoing effort:

- size of the community (# people)
- number of questions/inquiries
- quality of community you want

You'll at least need a dedicated person to regularly go through the site and check for unanswered questions and remove abuse of the system.

And, I'm working on a more focussed Community article which should be done in about a week. I'm gathering a list of some tools, so check back soon or send me your email and I'll mail you a copy of the article when it's complete.

Thanks,
Matt

Amber Rae Lambke said...

Hi Matt,

This is a really great list! Clear, concise & very helpful.

Thank you!
Amber

Pooja Sharma said...

Thanks for showing up such fabulous information. I have bookmarked you and will remain in line with your new posts. I like this post, keep writing and give informative post...! website designing in jalandhar

Tanu Chauhan said...

Valuable information. I am delighted to read this article. Thank you for giving us this useful information. networking training in jalandhar