Counterstrikes occur when you concentrate your intimate competitive knowledge and resources against a competitor. Most of us have felt a full-court counter-strike at one time or another. There may be cases when a competitor is successfully recruiting your resellers, or starts killing you in competitive bids, or has purchased your supplier, or formed a better alliance, or created a killer feature (s), or hired away one of your best employees–and it is costing you business.
This may have been an intentional effort on the part of your competitor (a counter-strike), or they may have innocently done a better job of recognizing the market needs and did the correct thing to win more business–paying little attention to reducing your market share. Regardless, having the correct information via business intelligence, research and benchmarking can help you to better position your product and de-position your competition. It also allows you to proactively take down your competitor–ethically (above the board), and win more business.
Ethics & Regulations
One of the exciting experiences of marketing is running counterstrikes…and watching them work! We have to have the mentally that we love the competition…so much so that we intend to acquire them, once their business goes away! It is also exciting to see how a company rally’s together when they have a common “enemy.” In addition, a common enemy helps the company to focus on doing more things right… and is part of our free-market economy.
However, in the competitive market place, there are limits to competing that we must never cross. These limits include legal and moral boundaries. Different states and countries have laws that we must learn and follow–period…no deviation allowed. These include regulation against predatory pricing, illegal acquisition of proprietary information, bribes, etc. This section will not cover the various laws, but it is the marketer’s obligation to learn and follow them.
We also need to regulate ourselves so we do not violate our own personal ethics and integrity. However, there is a lot that is both legal and ethically acceptable that we should do, in order to compete fully and manage our stewardship to the stockholders and employers that are counting on us to succeed. We also have to realize that it is a moral wrong to let a prospect buy your competitor’s product when yours is so much better!
Examples of Counterstrikes (good or bad – you judge)
Microsoft versus Netscape. In this case, Microsoft recognized the value of owning the Internet space. They needed to stop the Netscape momentum, so they deployed a large team to create a competitive product and released it–free, with their OS. Their need to move into the space and compete was good business. However, they may have stepped over the line when they gave it away for free and prevented Netscape similar access to their OS–this was questionable since it smelled of predatory pricing and monopolistic behavior.
SalesLogix versus Goldmine. SalesLogix was trying to recruit Goldmine’s authorized resellers. When Goldmine found out, they pre-announced their next product (which had the same features that SalesLogix was trying to leverage against them) directly to their resellers just prior to the SaleLogix recruiting seminar. This helped recommit the Goldmine resellers–essentially sending re-converted resellers into the enemy’s camp. The SalesLogix seminar was a bust because of the Goldmine counter-strike.
Ashton Tate vs Ashton Tate. Some companies screw up so bad, you’d swear they were fighting against themselves. One example was when the CEO of Ashton Tate called his resellers, “A necessary evil…” in a sales conference with his resellers. Ow!! This book is filled with similar examples of companies destroying themselves. Worth a look!
Microsoft versus Lotus. Microsoft again leveraged their OS to negatively affect a competitor. The well-known phrase, “DOS ain’t done, ‘till Lotus won’t run.” is an example of Microsoft’s attempt at leveraging one product against another. While there is nothing illegal with this particular action, it was repeated enough that Microsoft gained the attention of the government, which become involved–because of the OS.
Microsoft versus Digital Research. When DR DOS (for Digital Research, not Doctor) came out it forced Microsoft out of OS complacency. Microsoft countered and ran a counter-strike. This included pre-announcing product (such as MS-DOS 5.0) a year before it shipped (probably one of their most effective moves to head off the exodus), adding competitive features (such as compression, long names, comma’s, etc.), and selling the OS in retail (versus OEM with a machine). All of this was effective and acceptable.
However, when a later version of Windows shipped it would not install on top of DR DOS. Instead, the installation would halt and present a cryptic, scary message on the screen. However, if a user booted up on an MS-DOS disc, Windows would install and run just fine on top of DR DOS. In this case, the Microsoft OS was threatened and Microsoft leveraged its GUI interface to force Digital Research to loose credibility and scramble for a fix.
Two Major Publishers. I worked with a major publisher who dominated the reading and writing educational market. A competitor was trying to break into their market–but the competitor’s product was inferior and contained numerous errors. We ran a counter-strike where we delivered a direct mail piece to teachers (the customers) that contained a series of questions for them to grade. Once graded, the piece explained that the examples were found in the competitor’s product–the teachers had validated that the competitor’s product had errors (which in some states would cost thousands in penalties). The competitor was “caught” by our counter-strike and had to pull out of numerous competitive bids–or risk fines when the errors were noted.
The examples above show specific counter-strikes to prevent a competitor’s product from succeeding–some are acceptable, while others, according to existing regulations, may be questionable–you can decide. These are product specific. It is also possible to create a complete plan of action to strike against an entire company–competing with your product, pricing, promotions, recruiting their resellers, disrupting their supply chains, etc.. The key is to have accurate competitive information and an assertive promotional activity to exploit the competitors’ weaknesses.
Resources – Counterstrikes
Chanimal has a power presentation, “How to Position Your Product, De-Position the Competition, and Generate a TON of Leads” which provides numerous examples of counter-strikes that changed the entire market. You can find it on YouTube (when it is uploaded), but you can Register and gain access to the slides immediately.
- Read In Search of Stupidity – 20 Years of High-Tech Marketing Disasters. Do NOT make the same mistakes – by Rick, on my board–very funny.
- Hard Drive – The Making of the Microsoft Empire. The definitive history of the world built by Microsoft–a classic. Gives examples of Microsoft tactics.