You may have heard how customer orientation is the key to achieving the organisational goals of profitable business growth. But have you ever wondered why you’re unable to grow your customer base despite having many loyal customers who all seem thrilled with your products and services?
If you already have a well laid out strategy for customer satisfaction, then probably it’s time to take a different viewpoint in terms of your strategy – a competitor-oriented strategy.
Why focus on competitors?
A competitor-oriented strategy is especially important if what you’re selling is similar in price and benefits with those offered by competitors. In such a case, a customer is unlikely to have a preference between brands, and your success would depend on how well you’re able to capture market share from competition.
In a competitor-oriented strategy, you’ll thus need to look at not just how you deal with your customers, but also with other stakeholders in your value chain – the suppliers, distributors and the retailers. In this view, it’s not just going to boil down to hiring a telephone-answering service for customer service and knowing when to lower your price point – it’s more of a full picture view.
Getting the best deal from suppliers help reduce your costs, thus helping increase your profits. You’ll also be able to pass on the benefits to customers by lowering the price points, thus garnering more market share.
Sales support from distributors and retailers is a crucial element of business success because your product needs to be available readily for your customer. Offering better margins to retailers will get you the best shelf space in the store, and this goes a long way in getting the customer’s wallet share.
How to define a competitor-oriented strategy
To form a successful strategy against competition, it’s important to study their business models.
The first step is to identify who your rivals are. You must then analyse their strengths and weaknesses, and contrast them against your own strengths and weaknesses. This’ll help guard against your organisation’s vulnerabilities, while at the same time allowing you to exploit the competition’s weaknesses to achieve your organisational goals.
Some of the key questions that you must have answers to while formulating a competitor-oriented strategy are given below:
- Which are the competitors from whom I’m gaining market share? What are the reasons for this? Are there any other steps I can take to further strengthen my position over these competitors and make their customers switch to what I’m offering?
- Which are the competitors to whom I’m losing market share? What are the reasons for this? What are they are doing right which I can adopt so as to attract their customers to my fold and prevent leakage of my customer base?
- Are there any competitors who appear to be growing stronger? From whom I am facing a threat? What can I do to address my vulnerabilities, so as to not lose my customers to these competitors?
- Are there any competitors who are showing signs of vulnerabilities in the market place? How can I maximize on this opportunity to gain these customers into my fold?
This kind of an analysis is important for not just brick and mortar firms, but also for e-commerce sites which are vying for the customer’s fickle attention. As the marketplace becomes more crowded, a customer-oriented approach alone may not be enough to gain profit and growth.
While both customer orientation and competitor orientation attempts to win customers, the key difference is that in a customer-oriented approach, the needs of other stakeholders are often ignored.
Whereas in a competitor-oriented approach, you attempt to strengthen each element of your sales channel. Thus, a competitor-oriented approach is a more holistic approach which analyzes the entire marketplace and derives a robust strategy that helps to beat competition more effectively.
