3 Ways to Distinguish a Leader From a Mere Follower
Become the leading brand in your industry
Become the leading brand in your industry
All is fair in love and war — and business is most definitely war.
When you have something good, the vultures start circling and swoop down to peck your carcass. They are your competition.
Every week, month, and year, they start to come earlier and earlier to eat more of your meal. If you don’t put a stop to it, it’ll be you that’s eventually going hungry.
The only solution is to be first to the feast, to be the market leader… but how do you tell if you are the leader?
#1. When You Move, They Move
In a debate, it’s always advantageous to not be first. You can learn from the moves others have made to see what worked and what didn’t. Then tailor your response to silence theirs.
If you release a specific genre of product and your competitors follow up within hours, pushing comparable or competing products, it’s more than coincidence.
This is an example, not a criticism… This is a screenshot from my inbox this past Thursday. All three of these companies are competitors. The fact they’re all pushing the same style of product (Mentalism/Mind Reading) makes it highly improbable that it’s just chance.
DISCLAIMER: It needs to be said that I am no longer the VP for Ellusionist.com, so these are solely my views and perceptions. They are not the opinions of the company itself or the team that currently works there.
As you can see from the screenshot above, the first company put out their email and the competitors closely followed suit.
This isn’t specific to any one company, all companies do it. Good marketing is being reactive to what’s happening. However, it cuts close to the bone when the reaction is so lazy or blatant.
If things like this happen to you or your business, it’s a good sign you’re the industry leader.
#2. Their Price Undercuts Yours
Pepsi deliberately undercuts Coca-Cola. They often sell it cheaper at restaurants, supermarkets, convenience stores, and bars.
This steals market-share away from Coca-Cola, by giving a comparable product at a cheaper price. Consumers are mostly price-conscious, so you can steal a large portion of them with this tactic.
Businesses decide early on if they’re going to be:
Pepsi has chosen “cheaper” as its positioning, with respect to where the industry leader (Coke) is.
However, Coca-Cola’s brand is so strong and is so well-established — with what some say is a better product — that Pepsi still can’t overtake them.
They’ve stolen market share, but not the crown.
On July 31st, 2020, PepsiCo’s market cap was a staggering $190 billion but still fell behind Coca-Cola’s colossal market cap of $202 billion. Pepsi also ranks #29 on Forbes’ “World’s Most Valuable Brands” list, where Coke ranks #6.
Why can’t Pepsi dethrone Coca-Cola? If price is everything to consumers, they should prevail, right?
It’s not that easy. Let me explain…
If you notice your competitors undercutting you, it might not matter at all. The cheaper the product, the more volume they need to sell to compete with you.
If you sell a bag of coffee for $20 with an 80% profit margin, but your competitor sells one for $10 with a 60% profit margin, they need to sell more than twice as much coffee as you to equal your profits.
Your coffee =$20 retail price, with an 80% profit margin ($16 profit, $4 cost)
Competitors coffee = $10 retail price, with an equal cost of $4. Giving a profit margin of 60% or $6 per bag.
$16 profit / $6 profit = 2.666666666666667 (to be specific)
This means your coffee competitor needs to sell 2.6 bags for every 1 bag you sell, to match your profits.
It’s a clever quirk of mathematics. You’d be forgiven for believing an equally costly product sold for half the price of a competitor’s product means you need to sell twice as many to compete. That’s incorrect… It’s more than double.
This is why it’s not always best to be cheaper.
If your competition is undercutting you, it’s a good sign you’re the market leader and they’re doing their best to steal your market share. However, it might not matter, as in some cases they’ll need to work much harder than you to overtake your lead.
#3. They ‘Brand-Jack’ Your Products and Campaigns
Have you noticed how similar all smartphones are? Of course you have, you’re not blind… But, features, benefits, and form-factors are so similar, it would be hard to tell the brand name of each device without seeing the logo.
This is brand-jacking at play. It’s where your competitors steal your marketing ideas, product ideas, pricing structure, and brand likeness to help market their own items.
Riding the wave of a trend is fine. All companies ride the wave of “Black Friday” to compete for revenue, but it’s when your promotions coincide on a random day in March that brand-jacking starts to become apparent.
As with lesson #1 (When you move, they move), the market leader informs the strategy of its competition.
However, being the leader allows other brands to springboard off the hype your marketing spend has bought you.
Below is a perfect example by Google’s Pixel 3a. Springboarding off the hype that the iPhone X created.
It goes further still. This year, as with every year, Apple is rumored to be launching its newest iteration iPhone in September. They always announce new products in September.
Knowing that, when do you think Google is announcing their new Pixel 4a? That’s right, August. One whole month earlier.
If you find your competitors doing this to you, it’s a surefire indicator that you’re the market leader. You’re focusing on making great products, but they’re focusing on ways to denounce your products instead of effectively selling their own.
Although it’s probably not original to him, I heard Conor McGregor say this and it’s become one of my favorite quotes.
“Winners focus on winning. Losers focus on winners.”
In business and marketing terms, a truer word has never been spoken. Market leaders concentrate on innovation, while lesser competitors focus on the market leader.
Now there is a possibility that you’ve read this far and are guilty of all three of these points, but there is still time to change. Instead of chasing your competition or trying to diminish the impact of their campaigns by getting in early or undercutting their prices, try and forge your own path.
If you aren’t following anyone, you will naturally become the leader.