I chuckled last week when HBO announced they were testing out a “binge” strategy for a new series. They’ll launch with all six episodes available to viewers to watch as they wish. Sound familiar? It should, seeing as Netflix already trail blazed this strategy to great fanfare. HBO is just a recent example of how marketers are scrambling to remain relevant simply by catching up to their more innovative and courageous competitors.
Competition breeds “sameness”.
In every business category you have a group of players that control the majority of available market share. Entrants to the category believe they must meet the minimum standard, referred to as categorical point of parody. The assumption is that if you don’t offer at least the “same” as these companies then the consumer of your goods will potentially overlook you for not meeting some perceived minimum standard.
Here is the catch.
It’s this game of cat and mouse that deteriorates the uniqueness of a brand’s competitive “differentiation”.
In the book “Different: Escaping the Competitive Herd” by Youngme Moon there is a great excerpt:
“I had a conversation with a friend who mentioned, in passing, an incident that had recently occurred while she was staying at a Hyatt –like hotel. I couldn’t help but interrupt. Hyatt-like? I asked her. What do you mean, Hyatt-like? Was it actually a Hyatt hotel? Oh, I don’t remember what hotel it was, exactly, just one of those Hyatt-like hotels. I didn’t bother pressing any further because in fact I knew exactly what she was talking about. We all stay at Hyatt-like hotels and drive Honda –like cars, we all consume branded generics, all the time, you and I”
Throughout, Youngme continues to make a very strong case of the importance of differentiation and, in her perspective, identifies the dangers of brands falling victim to heterogynous homogeneity, as a by-product of their diligent pursuit to beat the competition.
So now what?
Youngme goes on to describe how Westin instigated the “hotel bed wars” with the launch of “Heavenly Bed”. This was significant as it was the first time a luxury hotelier had branded their premium-bedding offering. Premium bedding wasn’t new by any means, this was just the first time a luxury hotelier had “branded it” and supported it with a multi-million dollar marketing campaign. It wreaked havoc in the category, for a short while, short being the key word. Eventually everyone else caught up with each other, committing to one form of specialty bed or another in a matter of a couple years. So was Heavenly Bed a success? If you look at the research that Westin provides, guests ranked “comfort of bed” prior to Heavenly Bed at 8.96 out of 10 and then after the introduction there was an increase to 9.19 out of 10. So, Westin spent $30 + million dollars on the program and advertising for an uptick of 2% in customer satisfaction? Awkward.
Eventually everyone else caught up with each other, committing to one form of specialty bed or another in a matter of a couple years. Now no one was unique or special.
On the flip side, there is the Ritz Carlton, who has become a force in the luxury hotelier category not just by being noted as the best company in the US for employee training, or by adhering to it’s own extremely high standards, but also by doing something so remarkable for their category, that it is not likely be duplicated. Being remarkable isn’t something that just happens either. It is deeply rooted in the anatomy of a cult brand and is a conscious choice by an entity to proclaim their unique stand, all in the name of the customer.
Being remarkable isn’t something that just happens. You have to work for it.
What is it that made the Ritz Carlton so remarkable? Well, at every Ritz Carlton Hotel in the world, every employee has a pre-approved budget of $2000 per guest to ensure guest satisfaction. They don’t need to get it approved – they just make it happen. With an investment of between $500,000 and $1 million per room, it’s simply expected and assumed that if you’re staying at the Ritz it’s highly unlikely that you’ll find anything but premium bedding in your room. Go figure. The one piece of information that is not widely mentioned is that a Ritz Carlton customer will spend on average $250,000 with the company over their lifetime. Meaning the $2000 isn’t an arbitrary number; it’s a carefully deduced percentage of lifetime value. So this begs the question…
Are you competing or are you strategizing to carefully position your offer?
If you’re developing or promoting to keep up with the competition, then that’s all you’ll do. Keep up. At Cult, we help brand leaders clear away the competitive smoke screen and focus on finding solutions to their unique business challenges. Strategically speaking there are good competitive battles to get into and there are others you should just walk away from. Success in today’s hyper competitive business environment may have more to do with your company’s culture than it does keeping up with your category.
Success in today’s hyper competitive business environment may have more to do with your company’s culture than it does keeping up with your category.
Cult brands aren’t just different they’re dominant.
Cult brands don’t compete, they decimate! They do this mostly by changing the way the game is played and in doing so create new categories that connect with their core consumer on a deeper level. In today’s landscape, without a highly engaged and deeply devoted customer base, companies simply won’t survive.