WHO ARE
YOU WATCHING?
To
pass the time while at anchor in Woolshed Bay on the Coromandel, I idly
threw some bread overboard to feed the ducks. The ducks, however, must
be accustomed
to a higher standard of fare from more affluent boaties because after
a cursory look at what was being offered, they swam away with disdain.
Rejected, the
pieces of bread slowly dispersed as they drifted across the water.
A few minutes later, a small group of noisy seagulls noticed one of the scraps
of bread. Less fussy than the ducks, as one unit they wheeled and dive-bombed
the solitary piece they had spotted. There was squawking and squalling as they
fought over the bread which disintegrated in the fracas. Attacking and counter-attacking,
they continued fighting over the now smaller pieces. Eventually, three or four
of the gulls emerged victorious and flew away with a fragment of bread while
the rest flew away empty beaked.
None of them noticed the other pieces of bread floating in other parts of
the bay. If the gulls had focused on the wider environment instead of on each
other, they all would have ended up with more to eat.
Are we any different?
Most companies keep a weather eye on the competition instead of on the wider
environment which is, of course, the customers who make up the marketplace.
Like the gulls, they noisily fight over the same market segment with similar
offerings and discounted prices, and as a result they fragment the market and
shrink their margins. At the end, they each fly away with just a fraction of
what they could have had while other opportunities float by unnoticed.
I once read that each of us comes across more opportunities in a day than
we could possibly develop in a lifetime. We just have to learn to spot them.
You’re not going to do that by watching your competitors. You will only see
the opportunities to grow your business by watching your customers, by understanding
what they are trying to do, and by seeing the problems they encounter in the
process.
Every problem that prevents your customers from reaching their goals is an
opportunity for you to create value. The more time you spend in your customers’ worlds,
the more problems you will identify. The more problems you identify, the more
opportunities you will have to create value. It’s that simple. Every time you
create value, you give your customers a reason to buy from you, and that’s
got to be good for your business.
You also want to understand the problems you are causing your customers because
of the way you require them to do business with you. Every problem you cause
is a reason for your customers not to do business with you. It doesn’t matter
that your competitors are also causing their customers the same problems. You
can gain a competitive advantage, and probably increase your margins, by making
it easy for your customers to do business with you.
It’s the same with pricing. Prices should be set not by what your competitors
are charging for their offerings but according to what your solution is worth
to your customers. And the way to find that out is to understand how much the
problem is costing your customers. Again, you have to live in their world to
do that.
As always, you have a choice. Like the seagulls, you can follow the flock
and squabble amongst yourselves over the same scraps, or you can take a wider
view and learn what other opportunities might be floating around the marketplace.
To do the latter, you’ll have to spend less time watching your competitors
and more time understanding your customers.
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