In today's economic climate it is rare to go to virtually any business meeting without hearing a reference to budget cuts. This is especially true in relation to marketing. Lower budgets are a reality of the current market. But this doesn't mean companies need to or should limit marketing communications. What it does mean is that companies must be more strategic than ever before.
Marketing is never more important than in a down economy. Competition is more intense, and it takes more work to make the same amount or less money. Now more than ever, companies need to take the time to understand their competitors, customers or clients, and marketplace.
Performing a competitive analysis is one of the most important tasks a company can undertake. Unfocused efforts lead to brand inconsistency, unmet expectations, and nine times out of 10, exceeded budgets. Before beginning any campaign, a company should be able to thoroughly answer the following questions:
Where are your competitors marketing and why?
Knowing what your competitors are doing with their marketing is valuable information and it isn't hard to come by. Pay attention to where and when you are seeing paid placement, news articles, direct mail, social media participation and event involvement. Once you know this information, it will help you make critical placement decisions.
Are there places your competitors are not gaining exposure?
Knowing where your competitors are focusing also tells you where they are not. There may be a good reason for that or, they may be missing an opportunity, giving you the chance to engage your target audience without being side by side with your competition.
What is their strength? What is yours?
In the vast majority of cases, there are several companies in your market offering the same product or service that you are. And if there isn't now, there will be. The key is understanding their strengths and yours which are not the same. Being realistic about your true strengths and weaknesses will tell you what your brand should be built around. If your competitor offers faster turnaround but with less emphasis on customer service than your company for example, you should not be focusing on turnaround because you cannot compete. But what you can talk about and build your brand around is a higher level of customer service. Choose something you can stand behind and that you know your competitors can't.
Since the strengths of you and your competitors are different, are your target audiences truly the same?
Generically, if you are offering the same product or service as your competitor, your targets probably share basic demographic profiles. But taking the time to understand your differences will give you the insight to dissect your target audience further and choose the portion of that audience that will value your strengths over those of your competitors. That is who you should be spending your time and money targeting. Continuing with customer service as our example, look at people who have less available time. Depending on what you are offering, this may lead to more consistent marketing that targets working professionals who are willing to pay to work with a company who will offer in depth customer service.
Is your pricing in line with your market goals?
The ability to look at a situation through the eyes of your customers or clients is a valuable skill and one that does not always come easily. It is easy to see value in something you are personally vested in. But you have to remember that your target audience is not. They are looking for the most they can get for the least. Now that you understand your strengths and those of your competitors, it is vital to take an honest look at where that places you with pricing. If you offer customer service that saves your clients time and frustration, that may be worth paying more to your clients. But, it may not. Assessing your clients' understanding and experience with the product or service you are offering is an important indicator. If the service you offer is something most people use rarely building a custom home, for instance they may not understand the value that comes along with having an involved contractor. If you are offering a service people are more used to using such as car repair, your clients are most likely to understand the difference between having superior customer service and not. In that case, your target has most likely had frustrating experiences and is willing to pay to not have them again. Also take into account market conditions. As a rule, paying more for some features such as customer service are more effective in better markets. People are more willing to put time rather than money into an effort when times are tough.
These are all questions that should be answered to best understand where your brand stands in the market and what your company is up against. The more you know about your target audience, their perspective, what they value, and how you are different from your competitors, the more effective your marketing will be. And you will spend less time and money targeting people that your brand will not appeal to, which ultimately will not result in increased revenue.
Meagan Noin is the director of client services for MassMedia in Reno and specializes in corporate communications and branding. Contact her at 322-0755 or meagan@massmediacc.com.
