What is “Me-Too”? It is a common competitive strategy, used with good intentions to offer customers comprehensive solutions and better service.
How does it work? Let’s say you are with Company A. When your company’s primary competitor offers a new product, changes a price or features a new service, then so does Company A! Why? Your company doesn’t want to take the risk that its competition might be able to lure a customer with a new offer. To ensure competitive advantage, it is Company A’s turn, and it offers something new. Now the competitor, having the same concern, matches Company A.
It goes back and forth as the ante continues to rise. Pretty soon, the businesses’ offerings are nearly identical, and costs have escalated by adding things to the business model. The customer can’t tell much difference and is essentially forced to choose on price, not differences. Hopefully, that is not your competitive strategy.
When companies “benchmark,” or compare themselves to competition, they can be very tempted to try to match what they see or learn from the other guys.
Imitation is the sincerest form of flattery, right? It may be flattering, but rarely does it make for good competitive strategy. Instead, companies that strive to be different from their competitors, to solve unmet customer needs, often can corner a market that others battle over.
Need examples? Apple transformed smartphones. Callaway changed the game of golf with big head golf clubs. Those differences enabled them to stand out from the rest, not slug it out.
If you are looking to lessen margin pressure, “Me-Too” won’t do. Find a way to offer a different approach, one that is meaningful and relevant to your customer, and you will reap the benefit.