Industrial marketing would be far simpler if there was no need to deal with those pesky and persistent competitors. Imagine a world filled with manufacturing companies, each with their own unique and unassailable monopolies. There would be no need for any kind of competitive advantage based on superior performance. There would be no need to offer anything that was valuable or even remotely unique to your marketplace.
In this idealized world manufacturing executives could idle their time away, count their cash, and expand their equity in an unending dizzying dance of delightful dollars, or enchanting Euros, or, well you get the picture.
Unfortunately we all must deal with competition. In order to do so we need tactics that derive from our competitive strategy. But that leads to the challenge of understanding competitive strategy.
Now as you know, competitive strategy is an enormous subject replete with complex theories.
Frankly, many industrial marketing professionals and manufacturing executives tell me they find the whole concept of competitive strategy can be more than a little difficult to understand. They inform me they simply want to know the true nature of competition and how to successfully deal with it. Now that is not an easy question to answer, because there are innumerable ways of reducing competition and lessening competitive pressure.
However, in the spirit of providing value in my blog, I am happy to suggest a couple of simple methods you can use in your quest of reducing competition.
One very effective way of reducing competition is to be more preemptive in your industrial marketing.
This is done by taking the time to craft industrial marketing and selling practices that reset the buying criteria in the marketplace. Sadly, (because it works so very well) many manufacturing executives have a very hard time wrapping their heads around this concept.
What you do is stop selling products and start “selling” free education as your lead product. By taking the time to educate your prospects on what they need to know before they even consider buying your type of product you can reposition your competition and position your company as the only logical choice.
The second way of reducing competition is by maximizing switching costs.
Can you structure your product so there is considerable cost in finding alternative suppliers? The obvious way of doing this is to have a proprietary product. While this can be a simple matter if you manufacture iPhones it can be somewhat less simple if you manufacture a product that is hard to differentiate or is a commodity. What then?
I believe an additional way to increase switching costs is to become invaluable to your customers. The easiest way to do this is to become enmeshed in their companies and offer them insights that help them improve their performance. Many of you have brutal first-hand experience about the difficulty of unseating the incumbent. By taking the time to become invaluable you will become unassailable.
When considering ways of reducing competition be certain the practices you put into place make your competitors less appealing, or, ideally irrelevant. If you take the time to reset the buying criteria in the marketplace you create a significant barrier to entry. If you become invaluable to your customers you dramatically reduce your attrition rate and ultimately maintain your market share.