This is the fifth post of eight in the History's Greatest Strategists Reminder Series, Assembling Your Ultimate Business Advisory Board, by Ashton Bishop, Head of Strategy at Step Change Marketing.
In the last post we looked at how you stacked up head to head in the marketplace. Today we give you an opportunity to ask two questions and how to interpret them.
Check out the full presentation below.
Who is your success dependent on?
In looking at what drives customer behaviour, we need to have a broad view about what 'customer' means. Every business is very different. So for your business, the question is, who is your success dependent on? Is it about your customers? Is it about your consumers? Is it your resellers or other intermediaries who might work with you? Understanding this is critical to your long term success.
The tool we use to do understand what dives your customer's behaviour is a very simple table that asks two main questions.
- Why are customers buying your category?
- Why are they buying your individual product or service?
It's different depending on whether you're the market leader or whether you're the challenger. We then need to look historically, in the past, at what's driven that behaviour, and then in the future, at what's most likely to happen?
With this information, we can then look for points of disruption because where there's disruption, there is opportunity or there is a challenge.
Vertical disruption
So let's have a look at this, first of all vertically. Why are customers buying the category and then, why are they buying your individual product or service? We're not looking at this historically or in the future, we're saying, right now, is there any difference between the answer to these two questions?
The five ninths law
Why is 'right now' so important? Well you might remember when we talked about the five ninths law. Five ninths of marketing and communication is misattributed to the brand leader. One of the best examples as we know, is that, if I say a toothpaste on the count of three. Three, two, one, we say together, Colgate. And that's the five ninths law in practice.
Too many businesses aren't the market leader, yet they're talking about the things of why customers buy their category. The generic things and this is misattributed to the brand leader. We need to focus on, what are our points of difference? Why buy us? See, there's over twenty toothpastes in Australia, but every one of them is going out and saying, "You should brush your teeth" instead of saying why we're better than Colgate. It's most important that you don't fall into the five ninths trap.
Horizontal disruption
Then we look across, horizontally. What's the difference to the answer of those two questions historically? What's driven things to a point in time, and what's different in the future? So you might've bought an iPhone in the past because it was the newest, flashiest thing - the first real smart phone with a touch screen.
You might buy one in the future because now you've aligned all your products with Apple so it makes sense to have that simplicity of everything working together.
See the different drivers, and if Apple can understand that, they can focus on their communications and innovation. If you don't understand the shift in forces from history to the future, you might actually become history yourself.
A very good example of that is Hummer. They had a big, bold brand, but they missed the trend for customers wanting more environmentally-friendly and easier to park vehicles. Now they might have done something about it if they had have spotted the trend. Unfortunately, they're bankrupt and out of business versus the Prius. Toyota saw this trend and was the first one with a mass manufactured eco vehicle. And if you look at the statistics on the rise of the Prius, you'll see they won.
So, we have given you an opportunity to ask two questions and then interpret that with vertical and horizontal interpretation. We hope that's given you something to think about, some more things to populate your strategic radar with.
