David vs Goliath: Winning Against Bigger Competitors

Adam Armbruster

You’ve just received a tough assignment to develop a successful television campaign for your client that must compete with their much larger competitor.

How do you begin?

First, you need to fully understand the larger competitor’s strengths and weaknesses from the consumer’s point of view, and, in direct relation to your client’s business model. Next you will need to promote your advantages in a passionate television message all without drawing the attention and resulting counterattack campaign by the larger Goliath.

Surely this is not easy! But it is possible.

Since taking the on the bigger Goliath head-to-head is a sure way to draw their resulting wrath you are best served to instead stay off of their radar screens and win market share with a less “obvious” strategy.

Helpful tip …NEVER mention the Goliath by name in ANY of your advertising. It’s always better that the competitor not know immediately that you have them firmly in your sites for market share growth!

Second, Goliaths typically enjoy their success thanks to their volume buying efficiencies, store design, locations, superior supply chain management, and their marketing budgets. Try to identify which one of these business attributes is most likely the key to their current dominance. (Note: It may be a strong combination of all of these elements, but often one element will stand out.)

Now, ask your customers how they think about Goliath’s weakness’ and what area of your business you have a unique advantage. Ask for total honesty and never compromise on this step. This idea is the foundation for the entire campaign and new customers will expect you to deliver on this promise.

Third, determine the correct strategy to employ against their weakness. It’s time to shape the television campaign plan and develop specific tactics for your television marketing effort so here are some of the basic principles to develop a successful strategy:

1. Specialize and Categorize!
Use your key advantage identified above and promote it on television as a special “store within your store”. Example: What if you had to design a campaign for small local wine store against a bigger Goliath discount wine superstore. Your smaller local wine store that has the “broadest” selection of small vineyard French dinner wines all with in-store expert advice” can successfully compete against a larger national chain that sells the “largest and cheapest” inventory of wines in the region. Why? Because when it comes to buying wines, consumers have more questions than answers.

Demonstrate to consumers that you specialize in answering questions and that you will “price match” any advertised price. Also, promote unique and hard to find wine selections to protect your client’s profit margins since there is no reason to discount wines that the larger discount store does not advertise.

Here’s another example. Home Depot clearly has a strong “low price” perception in the US thanks to a very successful “Low prices are just the beginning” network television campaign. But, Home Depot also has massively large stores. Have you ever gotten trapped in one of these on a Saturday morning? These huge stores mean that that you will be walking a significant distance to find your items and also means you may have to check yourself out to avoid a long
checkout line. Aha! Goliath has a weakness. The smaller Ace Hardware chain also chooses to employ TV messages that offer great price and value. But this is where they take on Goliath. In the stores they position “helpful” employees near the front door to greet you and walk with you to pick out your items. Ace customers are immediately handed the item they are seeking. This time saved on a busy weekend is worth more to some consumers than a few dollars in savings at the Home Depot.

Bottom line: Ace Hardware successfully competes with the goliath Home Depot because Ace understands what many hardware store customers really want in addition to a low price.

2. Use Service Bundles to Surprise the Customer!
Creative bundling of services is a way to help your client’s customer solve several unrelated life issues all at once. These service bundles save consumers time and money in a way that they may have not expected.

Example: How did Lexus gain market share so quickly against such a well entrenched Goliath like Mercedes? One way Lexus does this is that their dealerships offer office-like environment for their customers. These special areas include free food and drinks, free car washes anytime, free wireless access, golf and car magazines, large plasma television screens and computers, plus quiet rooms with comfortable leather furniture. Compare this to a “traditional” car dealership service waiting area and you’ll get the picture.

Lexus chooses to use this as a Service Bundle for a “closing tool” when giving potential customers a tour of the facility. Do you see how Lexus bundles a “transportation” solution with a “zero down time” businessperson solution? (Check out the Lexus used car lot…you’ll see many shiny Mercedes trade-ins parked there!)

3. Solve a “Unique” Customer Problem.
Taking on a bigger competitor means that you may also need to offer a better overall value experience. This can have nothing to do with the prices, goods, or services being offered by the large Goliath competitor! And, this is a sure way to stay out of Goliath’s reach.

For example, we consult a mid-size home air conditioning company in Florida that guarantees to make a home service call within in 2 hours of initial contact by a customer (or it’s free!). They also ask their entire service tech’s to wear special shoe coverings before entering a home.

Is all of this really necessary? Not really. But it demonstrates to a customer that they respect your time and the cleanliness of your home enough to get there fast and also not leave greasy footprints across your floor. Women have reacted so positively to these promises that the company is enjoying fast growth and an 85% referral rate!

Lastly, designing a television campaign to help your client win market share vs. a Goliath requires additional thinking before acting. So take the time to reflect on the strengths and weaknesses of Goliath as seen though the consumers’ eyes. Then design an appropriate strategy. And finally passionately deploying these creative tactics with a smart TV campaign. You can begin to win market share. Plus, you can win business while avoiding a dreaded counter-strike by Goliath!

Adam Armbruster is a partner in the retail and broadcasting consulting firm Eckstein, Summers, Armbruster & Company located in Red Bank, New Jersey. Adam can be reached at adam@esacompany.com.