Do you know who you are competing against?
How do you beat these rivals?
Porter’s five forces is a framework for analyzing who and what you are up against as a business.
It is essential for growth take into account these these five forces and have a strategy to overcome them.
Industry Rivals
The key to winning in your industry is by finding those who are actively pursuing the outcome of what you sell before your competitor.
As you are the first to identify your prospects through utilizing data and people based marketing technology, you will set the buying criteria.
Getting to an interested prospect first allows you to develop a relationship by building trust. This isn’t done by framing your marketing as an ad campaign, it’s done by having meaningful conversations across multiple platforms.
Help the prospect with their problem first, and once they understand the lay of the land on their issue, you help them with the solution.
You start educating people about the problem and you build trust as the expert.
It’s not about pitching your company or organization, it’s not about making a claim about your business, it’s about helping your prospects foster a conclusion about a solution.
They don’t care about you, they care about their problem.
As you reach out and connect with those who are interested in what you provide before competitors, you build trust over your rivals and set the criteria.
Being first and carrying out a customer centric model of doing business will give you the advantage.
Powerful Suppliers
How can you possibly compete against marketing suppliers in today’s advertising landscape?
Take Google and Facebook as an example.
If they charge higher advertising prices or insist upon more favorable terms, they lower profits.
These advertising suppliers do a great job in expanding business, but anyone utilizing these powerful platforms should have a strategy that offsets supplier power.
So what’s the solution?
It’s in being platform agnostic.
When you own your own people based marketing data it gives you and edge because you are not dependent on Google or Facebook, or whatever platform you use that gets you results.
Google and Facebook work on what’s called a relevance engine, meaning they want to make sure that the ad that they show is relevant for the prospect.
If you show ads to prospects, and you don’t get a high clickthrough rate to Google and Facebook, they think the ad is irrelevant, and they will charge you more per click.
If you upload your own relevant targeting data into the relevance engine algorithm, you’ll start to only target the needles instead of the whole haystack.
As a result of a higher clickthrough rate, suppliers are going to give you a lower cost per click. That lower cost per click is going to result in a lower acquisition cost.
Powerful Buyers
A powerful buyer forces price down. If price goes down, profits go down.
How you do offset powerful buyers?
You need to is control the number of quality prospects who are in your pipeline.
If you are only getting a handful of prospects, they are likely to dictate terms.
To have negotiating power, you need more quality prospects to work with so that current prospects don’t have all the leverage and buying power.
Threat of Entry and Substitutes
There are new people and businesses getting into your industry every day.
New companies mean new alternatives, substitutes, and other interesting solutions.
How can you to beat substitutes and new entrants?
First, understand how your value proposition stacks up against these new entrants.
Your business must have a powerful only-factor.
You can’t say “We care about our clients”, because every business cares about their clients.
You need greater appeal, a greater level of exclusivity, and to be first before rivals.
You may match you competitor in every dimension on value except one. Find what that is and shine a light on that product or service’s relevance, importance, and urgency to the customer.
