Forget your competitors - focus on your customers

"Today, you're no longer trying to keep up with the competition... you're trying to keep up with your customers!"

This was a recent tweet by Mari Smith (@marismith) on a comment by Bryan Eisenberg (@thegrok).

It might only be a tweet, but it's a very interesting insight.

Our marketing efforts have traditionally been about the competition. We've got a better widget, better pricing or more outlets. We clean whiter, have greater coverage or reach parts others don't - probably.

The message is clear. It's better, faster, more - always about beating the competition.

There are very few unique products. Companies like Apple who create a brand new market with a brand new product like the iPad are rare. Typically you're selling a different version of something that already exists and trying to set it apart from the competition.

Loyalty marketing is no different. It's focused on building relationships that make doing business easier and more rewarding - the aim is to keep customers and by definition keep them away from competitors.

But if it's now less about the competition and more about keeping up with your customers, should this change our approach?

Well this is something that the book Blue Ocean Strategy discusses when it says:-

The only way to beat the competition is to stop trying to beat the competition. In red oceans, the industry boundaries are defined and accepted, and the competitive rules of the game are known. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Instead of focusing on beating the competition, they focus on making the competition irrelevant by creating a leap in value for [customers].

Blue Ocean Strategy talks of shifting your strategic focus from competitors to alternatives and from customers to non-customers. Focusing on alternatives - on how a customer may achieve the same overall outcome without using you or your industry forces you to think about what customers actually want and how well they are being serviced today. When you focus on customers you're free to break the rules and free to create them.

Apple broke the rules. They created something new that did the old things better. Browsing the web, reading books, playing games. The iPhone, iPod and iPad don't compete, they create new rules.

Groupon broke the rules. They focused on the little guy - the under-served small retailer to get deep and local discounts while everyone else was hawking the same coupons and discounts from the big boys.

Interestingly though you don't have to be Apple or a new start-up to do something different. A recent blog on netbanker shows how easily credit card companies could add value by just thinking differently about the competition - in this example the competition isn't another issuing bank, it's another way to reach customers spend decisions - namely Groupon!

Don't focus on the competition, make them irrelevant. Go break the rules.