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A customer choice chain for every brand

Competition is increasing. Everyone nods in agreement. But what does it mean exactly? The word means nothing if we cannot say what we are competing for. Market share? It's just a number. Companies compete for customers to choose their brand today, tomorrow, and many days after tomorrow.

Business is based on choice. Whatever Finance Directors and Bank Managers might think, and however they picture the business as columns of numbers, without customers your business is nothing. Business is about competing for your target customers to choose you, rather than your competitors, over and over again.

But businesses also compete for staff and investment. How many companies complain about the difficulties of 'finding' (recruiting or attracting) skilled employees? They have to compete for people to choose to work for them rather than other firms. When money is tight companies also have to compete for money to invest in their growth. They compete for those with money to choose them rather than other businesses.

It is not enough to set out a strategy in your business plan that says you will grow 10% next year. Where will you find 'choosers' of your brand? How many do you need? How do you get them?

A famous advertisement from the 1950s (McGraw-Hill's 'Man in a chair') spells out the challenge of earning customer's choice as a number of stages:

The chances that people will choose a particular brand range from zero to near certainty. But between these extremes there is a series of stages that make up the customer choice chain from those who have not heard of the brand, to the most committed and enthusiastic users. The 5 stages of the choice chain progress from 'aware'; 'informed', 'quality perceivers'; 'users', through to 'convinced users'. People move up the chain as they become convinced, but can slip back down the chain without regular brand maintenance. Even the strongest brands have to keep up their marketing effort.

Alarmingly, a recent study found that more than half of the brands researched generated more 'refusers' - people who will certainly not choose your brand - than convinced choosers. These brands are going nowhere. Companies should do all they can to minimise these anti-champions.

Awareness is just the first step in the choice chain. High awareness coupled with low market share is not unusual. It takes time to earn customer choice. Future cash flows are driven by the number of customers - 'convinced' customers -who choose you above others. What does your customer choice chain look like?


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