Let’s talk about the Red Ocean Scenario, what it is, and how it could be a very dangerous situation for so many small businesses…
Authors Chan and Renee coined the term Red Ocean Scenario and the principle is really, really simple. A shark can smell blood for miles and miles and miles away, right? So, when there’s a lot of blood in the water, it attracts sharks from all over. That is a Red Ocean Scenario.
There’s loads of blood in the water and there’s loads and loads of competition because everybody is feeding. As we look forward to the next three, six and even 12 months, we can really see that we are moving into a Red Ocean Scenario when it comes to business. Competition is super fierce.
There is a cocktail right now of businesses that have been starving, businesses that have lost clients, that have lost money, mixed with those same businesses receiving huge amounts of help from the government through grants, loans, furlough and schemes, all of that is gonna come together.
So you’ve got these businesses that were starving and now have the means to go out and market. Which means that when we get back to this new normal, they’re going to invest that money into marketing and the competition is going to be ridiculously fierce.
The reason that it’s going to be so dangerous for some businesses is because they have failed to plan for this Red Ocean Scenario, and they have failed to move quickly enough to take advantage of it.
So as you move into this Red Ocean Scenario, you look around there’s all this competition. It’s really fierce. It’s really tough. How are you going to separate yourselves?
Businesses need to do many things to ride this out, but two things that really stick out to us are:
1) Double down on your values. We’ve got more and more in tune as a society with the values that are strong to us. As consumers, we look at businesses and say, not just who’s the cheapest, who’s the quickest, but who do I actually want to give my money to? And we’re going to look at the businesses that have the values that align with ours.
This kind of situation has made a lot of people think about themselves and reflect and say “what’s most important to me?” So, as we’re going to be spending money, the values that our business portrays and showcases are going to be even more important.
As a business, you’ve probably got those values written up on a wall somewhere… but that’s not enough. What you need to do is show how they manifest in your business.
So, if you say customer service is a huge value point of ours. It might be, but how, why, show, show us, and that might be through the way that you do your deliveries, or it might be through the rewards or gifts that you do, wherever it might be, but just prove it.
So double down on your values and show the prospects out there what you stand for. That is going to be hugely important because, ultimately, that’s going to form a large part of your USP and a large part of what makes you different. And in that Red Ocean Scenario, when there’s so much competition, you’re going to need to stand out.
2) Increase your brand loyalty. Take care of your customers, market to your existing customers, as they’re already going to have that trust with you there.
Look for opportunities to add massive amounts of value, then you’re going to be able to upsell and cross sell and deliver new products.
But, your customers right now, that is your turf, and you are going to have to protect that turf as much as possible!
Whatever you can do from a marketing perspective to take care of your customers, to add massive amounts of value to them, and then market that, that’s going to be hugely valuable, because it’s going to be a lot easier to make more money from your customers that are existing right now, than trying to go out and find new customers.
In the Red Ocean Scenario, there’s a whole bunch of hungry sharks around you. So take care of your customers, because no doubt, there’s going to be lots of your competitors out there that are going to try and take those customers from you.
Think about a retention strategy, how you can shine a spotlight on your customers, how you can add value in other ways, not just gifts.
How can you give them publicity? How can you do a guest blog and share links? How can you take care of them?
It doesn’t just have to be taking them out for dinner, because as we know right now that doesn’t work… unless you’re getting a Domino’s Just Eat.
Those are two ways you can think about. One of them, double down on your values, let people understand what most important to you as a business, what values drive you forward and prove it, but also take care of your customers. They’re going to be more important than ever make sure you’re taking care of your existing client base.
Make sure you have a customer retention programme in place. Take care of those two things. Plan your strategies, plan your marketing, make sure you have that level of consistency and frequency, because in that Red Ocean Scenario, that competition is going tobe really tough.
The final point we want to leave you with is that as human beings, we have a very lazy brain.
There’s a fantastic book out there called “Thinking, Fast and Slow” by Daniel Kahneman. He talks a lot about a ‘System One’ part of your brain and a ‘System Two’ part.
System One makes all those decisions really quickly, almost intuitively. System Two is much more logical. It is much more considered when it comes to decision making.
System One is great at substituting. So what happens when we are presented with a very difficult question? That question might be, “do I trust this company?” This is a very difficult question. There are lots of variables!
So the System One part of your brain actually substitutes that question for a much easier question. “Do I like that company? Are they familiar?”
It sounds crazy, but if you read the book, there’s loads of data that backs this up!
So if you can actually show that you are familiar, if that you are likeable, that’s going to hold huge amounts of weight moving forward.
Think about your marketing, think about your content and think about how you can be consistent with everything you’re putting out. Can you increase the frequency of the content that you’re putting out?
Because as we move into that Red Ocean Scenario, that is going to be vital to the success of your business.
If you’d like to talk about how a strategic video marketing campaign can create familiarity and likeability in your customers, as well as ensuring you have regular, consistent content, chat to us today about growing your business with video.
