The Risk of Competitve Benchmarking

"Benchmarking competitors will ensure this effort will fail."

Not the most welcome (or expected) statement you can make to client leadership. Especially when you've been hired to do just that. But that doesn't make the statement any less true.

Competitive benchmarking is roundly accepted as a key foundational element to any digital strategy. It's often the first step companies take in gathering insights...and too often the only one, which is the problem.

Let's be clear...competitive benchmarking doesn't inherently create risk...but the narrow approach many companies take does.

There's questionable incremental value in conducting yet another extensive, formalized competitive benchmarking effort
This is especially true given the healthy, ongoing obsession most organizations have about their competitors. It's the rare company that can't already recite every digital initiative in their industry. And between existing research, trade publications, industry experts, blogs and strategic hiring there are usually few stones left unturned.

Mirroring competitors behaviors often mirrors their mistakes or misses important evaluation.
Technology is a perfect example...Company A wants to use the same technology solutions as the industry leader. Often a very bad idea because it ignores two critical factors.

1) The competitor may be years ahead from a technical/organizational maturity POV, so Company A risks overspending for overly robust systems that increase development and onboarding costs while often decreasing adoption and productivity due to complexity.
2) Just because a competitor has a technology doesn't mean it works. One leading CPG was the envy of the industry, winning countless digital awards. What wasn't as widely known was that their systems were being held together with twine and tape, costing the organization millions.

At best, benchmarking can only help a company achieve parity.
And even that is increasingly unlikely with the ever-quickening pace of change digital continues to drive. Consider that Facebook grew from 175mm to over 350mm active users in less than a year. Now think about how long it took your company to build their last Website...and add at least another 6 months if it was on a new platform...and all of that just to start to drive more customers. Meanwhile, the competitors you benchmarked have moved on to...?

The last point is often most critical to creating an effective digital strategy. Even if your strategy is to defend share, competitive benchmarking alone will not provide the needed insights to prepare for future competitive threats.

Competitive benchmarking is best leveraged as part of a greater whole that provides a balanced vision of the marketplace and your customers.

• Start with your customers. This can't be restated enough. Put aside the Web analytics and focus on the basics of who your customers are, their needs and how you do (or can) help them. Knowing what your customers are doing is important...knowing why they do it creates advantage.
• Look outside your industry. Customer behaviors are rarely specific to a vertical. People apply existing experiences and behaviors to new situations. Banking and insurance shopping/buying patterns are very similar to each other. People will look for a new vacation home in much the same way they found their last car...or TV. Identifying parallel industries creates broader insights and provides needed perspective to evaluate competitors.
• Look upstream. By definition there are very few companies leading digital innovation. And many of those are start-ups...not industry-leading businesses (i.e., your competitors). Following on the previous two points, looking upstream to digital innovators expands your digital horizon and helps your company better anticipate future opportunities and threats. So what if Moms aren't socializing about your cereal. What's important is that they are socializing more and more, which means it's your next important opportunity or threat...no matter what your competitors are doing now.

So, a more accurate opening statement probably would have been "Only benchmarking competitors (with the implied 'as you are now doing') will ensure this effort will fail."

More accurate...but less startling...and what's the fun in that. Try it for yourself and let me know how it goes.

Three Paths Forward For Healthcare

“What Should We Do First?”

Redesign our Website? Deploy a new intranet platform? Find a way for employees to collaborate? Build a patient portal? Launch some Social Media…something?

These are common questions we hear every day from healthcare leaders trying to balance seemingly infinite digital opportunities with clearly finite resources. The challenges aren’t new, but they are becoming more urgent.

• Healthcare providers are falling further behind in meeting the expectations of healthcare consumers / patients.
• Most healthcare organizations lack the agility to keep pace with the exponential changes in Web technologies.
• Gaps are widening between departmental/employee needs and the organization’s ability to deliver.

In truth, there is only one question healthcare organizations need to answer: What digital path forward are we going to take?

There are three possible answers:

1. Triage – Keep the lights on

• Lowest short-term cost
• Does not address organizational challenges
• Highest mid/long-term risk and cost
• Potential negative impact on ‘real world’ investments

2. Targeted – Investments/upgrades in select Web technologies

• Reduces short-term risk
• Limits short/mid-term investment requirements
• Limited impact on organizational challenges
• Limited opportunity to move beyond parity in market

3. Transformational – Take patient experience to the next level

• Greatest short-term cost
• Greatest mid/long-term risk reduction
• Minimizes organizational challenges
• Establishes sustainable excellence
• Creates significant competitive advantage

By selecting one of these paths, healthcare organizations can quickly define the scale and scope of future efforts. This also establishes a clear goal to evaluate how effectively each opportunity (e.g., Web redesign, intranet, patient portal, Enterprise 2.0, social) helps achieve that goal.

Organizations should be cautious about applying a “good, better, best” evaluations to these options. While Transformational may appear the grandest and most impactful of the options, the Triage approach can be the most appropriate for many companies based on organizational/technical maturity, agility, existing systems and processes, and time horizons.

Instead, the choice of Triage, Targeted or Transformational should be based on:

1. Support of organizational strategy and leadership goals
2. Alignment to audience needs/expectations
3. Effective Governance

Of course, resources are always an influencing factor but should not be a deciding factor in selecting the digital direction for an organization.
As the rate of change in digital technologies and audience expectation continues to increase, so will the variety and complexity of opportunities…and the critical need for healthcare organizations to clearly define a path forward.

B2B is the new B2C

B2B companies need to think more like consumer companies to be successful.

That shouldn’t be news, but somehow it still is. In fact, it’s more true in today’s digital marketplace than at any time before. It’s because the thin line between the two has been all but washed away due to the continued integration of the Web into our lives and the explosion of mobile and social media.

What’s most interesting is how many B2B companies will simultaneously argue that B2B “is different” while citing B2C examples. Case in point…yesterday we had a typical first meeting with a B2B company…

Client: “Don’t show us any consumer retail sites you’ve done…we’re only interested in your B2B experience”

US: “Ok, here’s our B2B work. Now, what ideas did you have for your new site?

Client: “Well, we want to suggest products like Amazon…doing videos like YouTube would be a great way to show our product benefits…we want to talk with customers like on Facebook…”

Exactly.

People’s expectations are established by their most common digital experiences. We don’t think of ourselves as “employee,” or “director.” We just know that buying a new computer this weekend took about :30 seconds, so we’re frustrated by some 7-page online form to get an estimate.

We instantly share photos of vacations with friends across the country, but can’t download or share a product photo without baring our demographic souls? We can easily find the most popular toys for a 10-year-old, but not the best shirts for my employees? Forget it.

So, what does thinking like a consumer marketer mean? It means:

• Think about engaging, not just informing: First, show customers that you understand their problems and how you can help. Many B2B companies drown potential customer in product descriptions and detail. Yes, this information is important, but even engineers prefer an experience to endless spec sheets.
• Think People, not just organizations: No “company” ever made a purchase decision. A person (often lots of them through complex interpersonal relationships) did. B2C companies don’t think of parents as “child care providers.” In fact, even “mom” is too broad of description in a marketplace driven by individual micro-targeting. Learn who the people are beyond the titles and the “accounts” and “companies”will solve themselves.
• Think Needs, not just products and services: What are customers going to use your product or service for? Whatever you’re selling, it’s a means to an end. Think situations and solutions – the ends you solve — along with products and services. Show your customers how important they are. How well you understand their needs and challenges. Don’t make customers figure it out for themselves.

Doubts that we’re right about this? I’d love to hear them.