The Worst Strategy in the World

I’m super open-minded about strategies.  Sure, I have a penchant for specialty strategies (because who doesn't like high margins?), but you can make a case for any strategy if you are willing to build the required competency.  There is one strategy I see far too often, though, and it scares me every time I see it.  That strategy is:  the same thing everyone else does.  I see it all the time, in big companies and small, and it’s one of the dumbest strategies you can use.

Similar strategies are almost always doomed to fail for one simple reason:  you are attempting to succeed with the same customers using the same competency that your competitor is using.  Now, if you have far more resources than your competitor, you might come out on top, eventually.  If not, you’re doomed.  But let’s look at the “more resources” approach:  if you have more resources, why wouldn't you use them to force your competitor into the LESS desirable space in your market, guaranteeing the top spot – and profits – for yourself?  There are two answers for this.  One is that sameness feels safe.  The second reason is that sameness creates the illusion that you can obliterate your competition and dominate the entire market.

Both of these reasons are nonsense.  There is nothing safe about sameness – in fact, it’s probably the most unsafe strategy you can pursue.  Faced with similar competitors, customers invariably choose the competitor with the thinnest margins – the highest cost offering sold at the lowest prices.  That’s just a recipe for poor financial performance.  And long-term, your brand loses meaning in the eyes of the market.  You become a clone rather than a distinctive, emotion-laden brand.  There’s no money in that.  The second reason is equally specious:  markets rarely tolerate complete obliteration of competition.  Don’t believe me?  Think of some of the most ballyhooed brands in recent times – they ALL still have competition.  Not one of them – not even behemoths like Apple and Wal-Mart – have escaped the world of competition.  What this means is that the sameness strategy simply transforms your existence into a struggle at a much higher level than you faced before.  You become Coke and Pepsi, duking it out over market share in a game where 0.1% is over $50 million in stakes.  It’s a playable game, but it’s not the endgame we all fantasize about.

How can you avoid the trap of sameness?  Here are three questions EVERYONE should ask when looking at their strategies:

1. 1.       Why Us?  Why would customers find this so awesome they would flock to our brand?
2. 2.      What is the difference?  Can you point to a SERIOUS difference between our strategy and our competitors’?
3. 3.       How does our competency stand out?  What know-how base do we have that our competitors are unwilling or unable to match?

If you have solid, robust answers to these questions, you’re on your way to better profits.  If not, maybe it’s time to re-think HOW you come up with your strategies.

If you’d like ideas about how to come up with better and more unique strategies, drop me an email…it’s what I do, and I love it!

A Sure Sign Someone isn't thinking at Hershey's

I came across this somewhat bizarre article today which describes Hershey's legal efforts to keep British chocolates out of the US.  The base story - which is about Cadbury's - actually leaves Hershey with a leg to stand on, since they do have the legal right to sell Cadbury branded product in the US.  However...and this is a big however...the underlying story details Hershey's attempts to keep all sorts of other chocolates out on the basis of the claim that the importation of these brands (Yorkie bars and Rollo - which Hershey doesn't have any right to) will be "too confusing" for people looking for the Hershey brands.  Not only is this backward nonsense that Hershey's lawyers (and brand managers) should feel ashamed of, it completely overlooks the fact that, while Hershey brands are heavily stocked and distributed almost everywhere in the US, the British brands are rarely available outside of specialty shops and highly-marked-up foreign foods sections of grocery stores.  In other words, if you actually CAN find the British product, you'd have to be an idiot to actually confused a four dollar Yorkie Bar with a two dollar York Peppermint Patty.  So, what Hershey considers worth the considerable legal investment and public relations backlash is something that amounts to just keeping any competing product out of the US no matter what - or at least making it very expensive for them to be sold at all.
Maybe I'm missing something here - after all, I'm not a lawyer and I don't know everything about these cases - but on the surface it sure looks like anti-competitive legal maneuvering.  I'd be happy to hear the other side of the story - but to me, this isn't just poor thinking, it's poor marketing and poor strategy.  Any manager who thinks the products even exist in the same market space needs a lesson in marketing strategy, and probably needs to learn a bit about how the public views this kind of legal maneuvering.  As for the headline grabbing story about the Cadbury products - all I can say is that it's a shame that the preferences of customers weighs so little on the minds of the folks at Hershey's.  Fighting customer preferences is perhaps the surest way I can think of to waste money in any consumer market.  Maybe someone with a more strategic brain should look at this issue?

Compass Points audio!

This week, I've started producing Compass Points audio!  You can listen to the latest edition here: http://www.hipcast.com/podcast/HJqz90VQ
 

Does being easy make it cheap?

I had a great conversation with my favorite coaching client a while back.  In it, I suggested that some of the things she does are incredibly valuable, and that she should be prepared to charge what they are worth.  In the ensuing conversation, it became clear that she didn't see value in them because these things were easy for her to do.  In that moment, I realized I do the same thing - I discount my own value when I do things that are easy for me, even though some are incredibly difficult for others.  One of the core ideas in strategy is that we should learn to do some things so well that what is easy for us is both valuable to customers and difficult for our competitors.  What do you do that fits this concept?  Do you charge enough for it?