Monday, July 13, 2015
GET YOURSELF FIRED TO GAIN A COMPETITIVE ADVANTAGE
As we’ve stated many times there are only three ways to win in the competitive marketplace in this “age of ‘abundance’ and ‘sameness”.“ This is an age where each category has a plethora of offerings but where there is little difference among them. They do the same basic things, work in the same general ways and are perceived to generate the same real world outcomes.
Ways to Win
In this “age of abundance and sameness” one way to win is to outmuscle your competition. That’s where you employ more feet on the street or more resources to overpower the competition. However, we find that even the largest companies are unable or unwilling to use muscle to beat their competition.
The second way to win is to price your offering sufficiently below the competition to make it more attractive than competition. This is a move borne of desperation and is only sustainable if you have economies of scale, can control costs better than your competitors - and if they don’t decide to neutralize your advantage by matching price. Regardless, our clients do not like to compete on price preferring to grow sales, profits and margins by sustaining premium pricing.
The third way to win is the preferred way. It is to differentiate your offering versus the competition. But it is not just differentiation for differentiation sake. It must be relevant to your target customer and meaningfully differentiated versus the competition. Yes, this is the way our clients prefer to compete to win but few do it well.
Barriers to Meaningful Differentiation
While the strategy to differentiate makes sense it’s the process of getting there to execute differentiation that falls short. While our intension is not to offend anyone, the reality is that far too many organizations and their executives are “flat earth” thinkers. They can’t see beyond their noses no less “think outside of the box,” as they exhort their subordinates and resource teams, such as ad agencies, to be more creative and find differentiation that will compel customer preference.
We hear our managers call for creative thinking. However, when they are presented with something that is different one of the first questions they ask is, “has anyone done this before?” And, when the answer comes back “no,” after all it is different, they are likely to respond, “Well, we don’t want to be the first to try it.” They’re afraid. Anything new to the world, as in “different,” scares them due to the potential for failure.
Oftentimes “different” thoughts and ideas regarding strategies and tactics are not even shared with senior managers. Lower level managers kill what is, or may be construed to be, different in its nascent stage, second-guessing what their senior managers will or won’t approve. A client gets what a client deserves. If a client doesn’t buy solutions that are different then managers and their resource teams will not share “creative” solutions (i.e., what is essentially differentiation) with them. We learn to sell senior managers what they buy. It’s as simple as that! And, what they buy is conventional wisdom, sameness, not differentiation.
There are also other factors at play that stifle meaningful differentiation. In the healthcare arena legal and regulatory (internal company resources as well as external authorities such as the FDA) push and bully their way to restricting claims to what’s literally on the label. For example one cannot claim “quality of life” unless it can be supported by a clinical study despite the fact that deep in the fibers of our being we know and understand that the presence of illness or disease negatively impacts quality of life from a physical and/or emotional standpoint.
Importantly, there are so few people who know how to think creatively, as required to develop relevant, meaningful differentiation and/or are willing to press for it. They suffer from myopia seeing only what is in front of their eyes. An example of this may be found in focusing only on the physical product and not seeing the potential of the intangibles. Intangibles fall outside the physical product and include support services that may serve to meaningfully differentiate your offering. Apple is a prime example with their “One-to-One” service offering of personalized instruction, of which I utilized this past Friday to finalize a video I developed. One-to-One is not something you find in the box when you purchase your Mac. It is an intangible that you purchase at a cost of $99 per annum. Yes, you pay for the service because it’s worth it (to many Mac owners such as me), and enhances the perceived value of your Mac.
Achieving differentiation requires more than an idea, or creative thinking. It requires awareness and a willingness to negotiate in pressing for its approval and adoption. A client was lamenting that his legal person would not allow him to claim that his prescription medicine would avoid the absolute potential from infection caused by use. The fact is a preservative used in competing products, which is not present in the client’s, has been linked (in rare cases) to causing infections. What the client didn’t appreciate is that his prescription solution could possibly (remote but nevertheless possible) result in an infection from other causes than the preservative. However, the client’s product could not cause the preservative infection (which goes by the name of the preservative) since the preservative is not present in the formulation. No one, including Legal and Regulatory, could argue against that. But the client didn’t go the extra step to press his case.
In another instance a creative head of a healthcare ad agency confided that he knows what will and will not pass his client’s legal and regulatory teams. Accordingly, he censors his team’s work before ever presenting it to the client. While he is proud of getting creative through the client’s legal and regulatory managers without difficulty he doesn’t appreciate that the circle of restriction grows inexorably ever tighter to suffocate creativity and the quest for differentiation. In sharing only that which he knows will be approved he is assisting in tightening the noose on differentiation. It is the opposite of “pushing the envelope.” It’s restricting the envelope.
Obviously, too, there are competing agendas. While marketers want and need to grow their businesses and brands, other disciplines within the company have quite different agendas. Legal and regulatory personnel want to avoid litigation and running afoul of the FDA. R&D wants to make what it is capable of making, not necessarily what customers truly need or want. Senior managers want predictability and are afraid of departing from whatever has worked in the past regardless whether it is a particular business model or tactic. While there may be universal agreement in principle that the purpose of the enterprise is to serve customers and make a profit it is not a universal practice of all disciplines.
Oh, for Want of a Word
Here’s a pet peeve of ours. It’s the lost of potentially compelling ideas due to a word. Organizations strive for the right idea. In practice the right idea tends to be the first executionally expedient idea that has consensus. However, it is rarely the right idea in the marketplace as judged by enabling the organization to achieve a competitive advantage through differentiation. We’ve talked about the importance of Brand and Campaign Ideas to drive brand performance and ROI in past issues of DISPATCHES. The critical element is the idea not the words. And, our goal is to have many ideas. The more ideas we have the better chance we give ourselves of finding appropriate solutions that will create the perception of relevant, meaningful differentiation. But ideas that reflect or create the perception of differentiation may be lost due to word choice, or the want of a word. Legal, Regulatory, the FDA and even senior management may kill and idea based upon a questionable word. Oh, what are we to do for want of a word?
The barriers are many but workable solutions are few.
Get Yourself Fired
If you really want to gain a competitive advantage through differentiation then get yourself fired! No, we’re not talking about being turned out or displaced by your company. Instead, we’re referring to an exercise that will help encourage the kind of creative thinking that will lead to relevant, meaningful differentiation. We’ve employed this exercise many times with clients and have enjoyed significant success through the years. We’re not quite sure of the origin of the exercise, whether it came from, or was inspired by, Edward DeBono, the father of Lateral Thinking, or Roger von Oech, author of A Whack on the Side of the Head and A Kick in the Seat of Your Pants. Regardless, it could prove productive for you to get yourself fired. This exercise of get yourself fired may be employed for a number of different creative problems not just achieving meaningful differentiation. It can certainly be used to find the right word to make a differentiated creative concept or claim float.
Here’s how the exercise works: First you or someone else states something that is so outrageous that if suggested to senior management it would get you or him/her fired. For example if the task is to improve profit margins you suggest that we ship air instead of actual product. It’s totally outrageous. One could imagine senior management, someone such as Donald Trump, saying, “You’re fired!” However, second, another member of the team intercepts before management can declare that “you’re fired” and says, “What s/he really means is …” and offers a creative solution. One response could be “what s/he really means is let’s rationalize the product,” or “let’s reduce the cube so as to reduce transportation costs,” or “let’s concentrate and reward sales force focus on higher margin products.”
BOATS & HELICOPTERS
It takes attentiveness and engagement to find ways to develop relevant, meaningful differentiation. Being an active listener or reader demonstrates engagement. So we’re inviting you to be an active reader and find the Boats & Helicopters embedded throughout the article. If you don’t have time to make a listing of them then you’re probably not going to find ways to compete more effectively with relevant, meaningful differentiation. Well then, you can always get yourself fired!
Best wishes for success.
Richard Czerniawski and Mike Maloney
Just a reminder....
DISPATCHES – SUMMER BREAK
We’re taking a summer break from issuing DISPATCHES. Well, not a complete break. We’ll be issuing DISPATCHES every two weeks versus weekly through Labor Day, that time when people complete their summer vacations and hunker down for work. Look for your next issue of DISPATCHES the week of 26 July and then every two weeks thereafter until the week of 14 September when we will resume weekly publication. Enjoy you summer holidays.
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