Defining your target audience is the first step in developing a powerful brand strategy. But you’re not the only player in your (hopefully) tightly defined market. Which means you need a frame of reference so potential customers can clearly understand “what you do” and “who you are” and compare your product or service with others in your category that offer similar benefits.
In essence, your frame of reference defines “what you do” and the competitive landscape you play in. Defining it precisely drives the development of a powerful brand that resonates with your target audience. Problem is, most companies define their frame of reference too broadly or narrowly. As a result, they end up chasing prospects they shouldn’t. Or they miss out on opportunities by overlooking part of their market.
Market Leader or Market Has-Been?
Frame of reference has several elements, the most important of which is how you define yourself as a business. Get it right and you can become the market leader. Get it wrong and, well, we’ve seen what happens many times since the advent of the Internet.
In the ‘90s, Blockbuster ruled the retail video rental world. Then along came this upstart called Netflix. Blockbuster saw itself as nothing more than a retail video rental company. Netflix, which started out renting videos in kiosks rather than stores, soon realized it was in the content delivery business. Now it has become a household name, while Blockbuster stores have vanished, save for one store in Oregon!
Even before retail video rental became obsolete, Netflix began stealing market share from Blockbuster with two seemingly minor differences. They let customers keep the videos as long as they wanted (within reason). This eliminated the annoying fines Blockbuster charged for late returns. More important, they began offering video streaming services. All the while, Blockbuster stuck with their “come to our store, stand in line to check out, and get that video back tomorrow or else” business model. They failed to grasp the full scope of the business they were playing in, and they paid the ultimate price.
Here’s an example of a company that got it right.
Proflowers.com originally sold flowers online and did it well. Over time, they realized they didn’t just compete against other floral businesses. Instead, they were actually in the gifting business, with an incredibly efficient and fine-tuned distribution and marketing model, competing against other perishable gifts (food products, etc.) and non-perishable gifts (perfume, jewelry, etc.).
In the early 2000’s, Proflowers.com changed its name to Provide Commerce to align its brand with its broader gifting strategy and began to offer different types of gifts (Shari’s Berries, etc.) in addition to flowers, and significantly expanded their customer base. All because they expanded their frame of reference to align with changes in the market and smartly captured a well-defined but expanded market segment.
Who Do You Compete Against?
Ultimately, frame of reference is all about understanding who you compete against. And not just the competitors in your industry; that’s so 20th century. These days, limiting your frame of reference to traditional competitors is a sure way to get blindsided by some upstart like Netflix who swoops in out of nowhere and, using technology, totally disrupts your industry (e.g., think about what Uber did to the “taxi” industry).
Suppose you run a successful car dealership. If you only focus on outselling other dealers, you could well be out of business in 10 or 15 years. Why? Because competing against other dealers is the least of your worries. Now, you also compete against Uber, Lyft, municipal transportation, subscription car services, and – eventually – self-driving cars.
You can either come to grips with the fact that people will soon no longer own cars and adjust your frame of reference accordingly. Or you can plow ahead with the traditional model and dig your own auto graveyard. Like it or not, we live in a transformational world. Focus only on current competitors and you’ll miss everything else that will come out of nowhere, turn your industry upside down and redefine you.
Most companies struggle to get their frame of reference right, and that’s where BottomLine Marketing adds real value. Traditional marketers typically focus on tactics. We help you define your target audience and your frame of reference, which makes brand positioning and the entire marketing planning process more strategic, efficient and effective.
Got a question about branding or marketing? We’re here to help. Contact the brand gurus and we’ll get back to you right away.