Competitive Replacement Program – An Untapped Golden Nugget
Ask 20 people what their approach to competition is and you will get 20 different responses. Most statements about the topic of competition are expressed with bravado or fear.
It floors me that most firms large and small reference the competition and then do little to nothing to actively deal and cope with it.
I could fill this article with case examples of firms that underestimated their competition ignored it or overstated their own position and strength to find themselves victimized. Any firm that genuinely believes it is immune to competition and shifting fortunes is one that is currently in trouble or will approach it around the bend.
Lets discuss one angle that will allow you to wreak havoc on competitors and build your customer base at their expense.
A great industry leader Peter Drucker once said It takes three to five times the effort and cost to develop a new customer as compared to growing an existing one. With this in mind I will outline the basics and fundamentals of implementing an effective Competitive Replacement Program.
Program Overview
The Competitive Replacement Program CRP is utilized in situations where it has been recognized and confirmed that a competitor is repositioning its business around a different target market than its traditional base. This means that the competitor is potentially vulnerable to an unhook strategy. Its customers will inevitably seek out a replacement supplier once they realize what is going on. This class of CRP is designed to exploit the competitors weaknesses and drive the reality and message home that it will eventually abandon the traditional customer base in favor of a new growth segment.
CRP can also be used when a competitor is vulnerable because of inherent problems with its product or servicesthis leads to dissatisfied customersor because of financial or organizational problems such as the following:
Sustained financial losses particularly evident with public companies resulting in loss of customer confidence.
Inability to pump out new products effectively resulting in a product trough which allows you to pick up the opportunity base in the short runyour competitor is caught offguard and has no clear product solution. Customers are forced to switch just to maintain the competitive pace and demands of their projects.
Organizational inefficiencies which allow you to drive a wedge into your competitors dilemma. Active customers will tell you where the chinks in the armor are in your competitors delivery and fulfillment mechanism.
Preoccupation with acquisitions or other activities that cause your competitor to take its eye off the ball and leave the active customer base reeling for a proactive replacement supplier.
Other conditions also justify CRP. The key is that you do the homework to be sure you are dealing with facts and reality about your competitors situationand then strike! CRP requires a wellthoughtout game plan which involves the internal and external organization field sales and support as well as thirdparty channel partners.
The makeup of an effective CRP can include the following:
Directresponse campaign including email communiqu direct mail Web site promotion electronic spot ads banner ads ECasts and so on. This depends on what works in your particular business.
Prospect contact informationthis identifies the makeup of your competitors installed base which fuels the campaign. There are thirdparty specialists that can provide contact databases prospect lists or other media that allow you to pinpoint the target audience. Additionally your field team and thirdparty partners can help identify where your competitor lives.
Campaign packagethis is intended for the target prospect audience and outlines the purpose of the campaign straight talk the impending situation with the competitor optional benefits of doing business with your firm a transition plan and probably some financial incentive to make the switch painless.
Telemarketingthis is a means of introducing the campaign providing continuous followup and guiding the prospect through phases of the campaign all leading to a successful switch. Telemarketing is coordinated with the field sales team.
Implementation packagethis is designed to familiarize and ramp up the field team and thirdparty partners that will be the implementation vehicle to drive the campaign at the account level. The package includes a program overview that explains the purpose and objectives baseline strategy makeup of the target audience drivers and hot buttons initial approach and action plan. This must include performance metrics. Otherwise the campaign results will not be measurable or manageable.
A campaign report simple and easy to use should be introduced to monitor all aspects and provide insights that fuel midcourse changes and enhancements. Additionally an owner must be assigned who takes accountability driving and managing the campaign from inception to completion.
The campaign can be spiced with competitive analyses transition tools depending on the nature of your business and financial incentives for each competitivereplacement win. A theme can also be wrapped around the campaign to make it challenging and stimulating. One campaign was packaged and promoted as Mission Possible and was patterned after the TV show. It kept the drive alive for the full campaign period.
CRP lends itself to be introduced at the beginning of a fiscal year and carried through for a 9 to12month period. The key is to track the competitive dynamics and make sure the timing is right.
Before going full steam ahead with a CRP conduct a pilot phase to test the water with marginal prospects. This will also allow you to properly initiate your field team and thirdparty partners to the program.
Campaigns such as CRP have created new customer sources of business and generated millions of dollars of returnand without breaking the bank.
What is your rationale for not applying CRP to your business?
Will you be victor or victim in the competitive jungle?
Copyright 2007
Performance Marketing Group
Edmond Hennessy
About the writer:nbsp;nbsp;Edmond Hennessy is a seasoned wellrecognized veteran in the COTS Embedded Market. He has authored many works including the MissionReady COTS Industry Guidebook COTS Supportability the LifeCycle Proposition and Beyond COTS: Repackaging Reformatting Tech Transfers. He has participated in key industry panels has been a keynote speaker in Ecasts dedicated to signalprocessing applications and has been tapped as an industry executive to comment on disruptive and emerging technologies that impact the Defense Military Homeland Security and Healthcare/Medical Target segments. Mr. Hennessy heads up the Performance Marketing Group PMG a private market programs consulting firm. His new book Market Warfare: Leadership Domination over Competitors will be released in early 2008. For more information visit http://www.pmgresults.com/ or call 603 5522096.
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