by Stephen Denny
How many of us have to get up every morning and do battle against a competitor that towers over us? We’ve always had Goliaths in our midst that spend more on their agency retainers than we do on marketing. It’s hard enough to hold our ground. But we’re asked, instead, to take share away from them, often with a smaller budget and fewer people than we did last quarter.
Here’s why this story is actually good news.
Not only is it possible, but it’s been done before many times, and the stories of those who have gone before us and come back victorious are available to apply to our own business lives. In Killing Giants: 10 Strategies to Topple the Goliath In Your Industry (Portfolio), I spoke to over seventy of these Giant Killers from thirteen countries around the world, representing industries from consumer products to technology to B2B. I learned not only can you outmaneuver the giants you face, but also you can often take advantage of their greatest strength in the process.
Here are three ways you can, too.
#1. Seize the Choke Points
Battles can be won or lost in the trenches of the channel. Giant Killers have a way of becoming invaluable when it comes to the channel because it’s a cost-effective way of staying in the game. When you can’t compete on above the line advertising spend, you can often make it up by seizing the choke point of the channel and winning there.
If you’ve ever walked into a consumer electronics store, you’ve probably walked out at least once with a Belkin product – although you may have forgotten exactly what product it was. Belkin cut its retail teeth on managing four linear feet of retail space in most of the major CE retailers by handling the space management duties for the products no one wanted to deal with: after market curly cords, splitters, D-sub connectors and the like. The four feet grew to 8, then to 16. The company you couldn’t dislodge became a brand with routers and name brand accessories for iPads and laptops. But it could stand its ground for this long because it had become indispensable to its retail partners: it did the heavy lifting that the retailer didn’t want to handle.
#2. Win in the Last Three Feet
When the giant spends millions on advertising, don’t try to compete on spending. Just look at the situation from a different perspective: they’re driving tons of qualified customers into the stores, to the resellers or to the search engines. You know where they’ll be – just steal the customers away, one by one.
In 2003, Adobe lost a critical Black Friday ad placement at a major retailer, the merchandising weekend after Thanksgiving that kicks off the retail holiday season. Its competitor would be given the ad, they were told, and the lion’s share of the holiday volume would be going elsewhere. Instead of cursing fate and waiting for the next time, Adobe sent retail detailers – live product demonstrators – into the top 250 stores of the chain and showcased their product to shoppers for the entire three day weekend. Shoppers walked into the stores clutching their circulars and were then shown a competitive product by a helpful professional. The shoppers were thrilled. So was Adobe. They sold out of inventory in most of the stores before the weekend was out and spent a fraction of what the ad would have cost. What the giant assumed was a slam dunk, in other words, became a toss-up – and provided an excellent example of skillfully playing the hand you’ve been dealt and winning after the giant thought the game was over — in the last three feet between the customer and the cash register.
#3. Polarize the Market on Purpose
It’s been said often that leaders – and companies – fail when they can’t stop fighting the last war. We can be excused for this blind spot because we fought the last war well and won it. But the rules that we got good at playing within lose their hold over time, and we don’t always notice when newer rules appear. Giants become victims of their own success over time and smart Giant Killers are adept at reinventing the game, and entire industries, in the process.
Germany’s Prizeotel is a bit of an enigma. It’s a design hotel, built from the ground up by international design guru Karim Rashid – but it’s a budget hotel with rooms starting at €59 a night. How is this possible? Founder and CEO Marco Nussbaum, a life-long hotelier, decided to re-think what an overnight stay was all about. He examined the “givens” of the business hotel space and tossed out such sacred cows as in room landline telephones, minibars, premium television and even closets in many rooms. He added iPod docks, free Wifi and a prepaid stay check-in process that eliminated the need to check out. Do we still need landline phones? No – and that eliminates the costs of the terminals in the rooms, the switch in the back office and the staffing hours needed to tally the bills. With cost savings driven in this way, Prizeotel could offer a premium product at a budget price.
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Do these ideas apply to your business today? They are 3 of the 10 strategies I’ve described in Killing Giants: 10 Strategies to Topple the Goliath In Your Industry (Portfolio), which ships today. Over the past two years, I’ve interviewed over 70 of the world’s most effective business people, capturing stories from thirty-three brands in thirteen countries, from Silicon Valley to the townships of South Africa. And just to make sure I’ve poked into each corner thoroughly enough, I’ve brought in others from outside the boardroom, including professional gamblers, hostage negotiators, screenwriters, historians and others.
This story is good news. It reminds us business isn’t about the size of your budgets but the impact of your ideas. I hope that Killing Giants gives you a few thinking tools you can put to use today to give you the mental ammunition to do what might feel impossible today – to topple the Goliath in your industry.
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