How to Move from Competitive Confusion to Competitive Advantage

I was impressed with his candor as I listened to the CEO of a well-established digital agency confess that their #1 challenge is “competitive confusion.” He was referring to the situation where he and the CMO are confused about what distinctive results their organization delivers versus their competitors. He’s not alone. This is a challenge for most companies even if rarely discussed.

That’s because most companies have no way to determine which of their target customers’ needs are going unsatisfied by their own offerings and by their competitors’ offerings. If you don’t have this information, then your efforts to differentiate, innovate, and establish competitive advantage will become a guessing game that results in high failure rates, a lot of frustration, wasted time and resources, opportunity costs, and even reputation damage – all of which are unnecessary but very common for many companies today.

Traditional competitive analysis entails comparing your feature set with the feature set of your competitors. The problem with this approach is that features may not effectively address the needs they are designed to satisfy. Additionally, there may be important needs that none of the features address. Customers don’t care about our product or service features; they just want to get their jobs done according to their criteria. Consequently, traditional competitive analysis is of dubious value.

Fortunately, Jobs-to-Be-Done (JTBD) can resolve this problem. In Reveal’s 6-step Growth Strategy Roadmap™, you can see that we “Discover the target customers’ needs, i.e., their jobs and criteria for success,” in Step 2. This is accomplished through special qualitative interviews designed to get the right type of information suppliers need to create competitive advantage. These need statements are carefully formulated to avoid any reference to current products or services to thereby prevent the client from being constrained to current solutions.

In Step 3, if a client wants to obtain the benefits of a quantitative study after the qualitative interviews, then we will deploy a web-based survey to a representative sample of target customers asking them to rate each need on a 1-5 Likert scale for 1) how important the need is to get done, and 2) how satisfied they are with their ability to get it done given their current product or service solution.

These two ratings on each need  – importance and satisfaction – make it possible to identify and rank the biggest opportunities in the market. An “opportunity” is an important unsatisfied need. The more important and less satisfied a need is, the greater the opportunity for innovation and growth it presents.

In order to compare the client’s customers’ scores against the market’s scores, we obtain at least 30 respondents who are the client’s customers as well as a larger representative sample of the total market. This enables clients to determine how well their offering performs compared to the rest of the market on every metric that customers consider important. Hence, a competitive analysis is baked into the market numbers but without specifying particular competitors.

If we’re hired to conduct a direct comparison of specific competitors as well, we will then also obtain samples of at least 30 customers from each of the top competitors. This enables the client to identify the strengths and weaknesses of each supplier based on the only thing that really matters: how well each offering satisfies the target customers’ important needs.

This analysis gives companies potentially game-changing insights to:

• Guide the development of new and improved offerings with precision
• Craft messaging and positioning statements to capitalize on the firm’s current competitive advantage, as well as on new features that can be developed to create additional competitive advantage
• Increase sales effectiveness
• Create unique value in a predictable manner
For example, when we did a competitive analysis for a manufacturer recently, some of the results revealed were:
• Opportunities that none of the market suppliers were addressing representing “blue ocean” opportunities for our client
• Competitive weaknesses in the client’s product, i.e., criteria for success that the market deemed important and were being satisfied by the market, but not satisfied by the client’s product
• Competitive strengths in the client’s product, i.e., criteria for success that the market deemed important and that the client addressed better than any competitors.

In Step 4, with the findings in mind, we help client teams evaluate and select those opportunities that are most attractive to pursue for new value creation.

In Step 5, we facilitate a working session to generate ideas to address the selected opportunities. This is very different from traditional brainstorming because we have already:

• Identified, validated, and ranked the biggest opportunities in the market
• Worked with the client team to evaluate and select the best opportunities to pursue

This prework gives the client team great confidence and clarity about where to focus and what to do to create unique value. It enables firms to determine what distinctive results their organization currently delivers versus their competitors and how they can create additional new value to further build their competitive advantage. This is how firms can move from competitive confusion to competitive advantage.

Schedule a call with me to explore how you can create competitive advantage.