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Their competition might not be who they think it is.Have you ever heard the term “The Curse Of Knowledge?” According to Wikipedia, The Curse Of Knowledge is a cognitive bias that occurs when an individual, communicating with other individuals, unknowingly assumes that the others have the background to understand.
Curse Of Knowledge: A cognitive bias that occurs when an individual, communicating with other individuals, unknowingly assumes that the others have the background to understand.
You see this a lot with instructors. The instructor is so familiar with a subject that they forget the person or people they are instructing don’t have the same background and therefore might not understand their teaching them.
Like a web designer giving a presentation to a group of fellow web designers and falsely assuming they all know CSS. Where in fact, some of the web designers may use Wix, Squarespace, GoDaddy Web Builder or Webflow. Platforms where knowledge of CSS is not necessary.
Why am I talking about the Curse of Knowledge? It’s because, as graphic and web designers, we sometimes take for granted that our clients know what we know. Especially when it comes to identifying the competition. But let me tell you. Many, if not the majority of clients, don’t have the background and knowledge that we do and therefore fail in their competition identification.
Case in point. I'm a member of a grant approval panel for my local Business Enterprise Centre. Every year, our BEC receives government funding and hands out grants to help new businesses start and get off the ground. The grant process requires each applicant to have a business plan, a three-year financial forecast, and a presentation to the grant approval panel saying why they believe they should receive a grant.
Over the past couple of years, I’ve seen dozens of these presentations. For my part, I read every applicant's business plan and follow up their presentation with questions to ascertain their merit regarding the grant. Part of their business plan requires a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Under the Threats part of the SWOT analysis, each applicant identifies their competition.
After sitting through dozens of these grant presentations, I've learned that most startups don’t know who their competition is. Some do a good job, but on average, the bulk of them don't realize who they are competing with. Most of them don’t realize that every business has two types of competition.
Direct Competition. Meaning those who sell or provide the same or very similar product or service that they do. And Indirect Competition. Those who might not sell or provide a similar product or service but are still competing for the same target market. It’s this second one where almost all of them fall short.
That’s why I brought up the curse of knowledge earlier. I’ve been in the design field long enough, and I’ve dealt with enough clients over the years that it’s become second nature for me to not just think of direct competitors but the indirect ones as well.
Let me give you an example.
One of the presentations I sat through was for a couple who were in the process of opening up an escape room business.
If you don’t know what an escape room is, it’s an entertainment venue where you and a group of friends are locked in a room or group of rooms and have a deadline to figure out puzzles to get out. So you’re up against the clock as you all work together to decipher the clues you find in your surroundings. If you’ve never tried an escape room before, you should really give it a shot. They’re a lot of fun.
Anyway. This couple was in the process of starting an escape room business. They leased a building, and construction had begun. They applied for the grant to help offset the cost of building supplies.
I noticed something while reading their business plan and hopped they would clarify it during their presentation. But instead, they excitedly said they were sure they were going to succeed because escape rooms are becoming more and more popular AND they have no local competition. The closest escape room is over 100 km away. They stressed this point.
After their presentation, I called them out. I pointed out their direct competition being over 100 km away. But then I asked about their indirect competition. The response I got was, “what do you mean?” I asked if they had conducted any analysis on their local indirect competition, such as the local movie cinemas or the theatres where they put on plays. I asked about the dance clubs, the bars with live entertainment, the local miniature golf course, etc. They looked at me confused and said, “We’re not competing with them.”
I asked the applicants how they can think they are not competing with them? They're starting an entertainment business. It offers a fun outing for groups of people that lasts 1-2 hours. So does every other venue I mentioned. When a group of friends figure out what to do on Friday night, they better believe they're competing with all of those other places and many more for that group's attention.
One person in the group might want to see a movie. Another might want to spend time outside at the mini-golf. Another might suggest they go to a club that offers a live band.
The couple opening the escape room business didn't realize they were competing with every option that might prevent someone from choosing their escape room for their fun.
And that was just one of the grant applicants.
A massage therapist failed to see she was competing against not only fellow massage therapists but also chiropractors, acupuncturists, and physiotherapists. Not to mention electric neck or back massagers you can buy at various stores.
The one that really got me was the craft brewer who thought his only competition was other craft brewers. He completely failed to realize that he’s making beer, and therefore he’s competing with all the big beer labels as well.
As a designer, a problem solver as we like to call ourselves, our job is to not only design amazing things for our clients. But to also help them identify their shortcomings. And that means making sure your client understands not only who their direct competition is, but even more importantly, who their indirect competition is.
You’re not just designing marketing material in the hopes that someone will pick your client’s escape room over another escape room. You’re designing marketing material trying to persuade people to chose your client’s escape room over any and every other entertainment they could choose.
The same principle applies to identifying target markets. There are direct target markets, and there are indirect target markets. Some clients don’t know who they are targetting.
Several years ago, I designed a logo for a client starting a science kit subscription box for kids ages 5-12. Each monthly box would contain fun science facts and a couple of experiments the kids could do around the house.
When I received the written copy for their brochure and website, I immediately questioned the material. When I asked the client who they were trying to target, they told me their target market is young boys and girls ages 5-12 who enjoy doing things like learning about bugs or digging through dirt.
The client completely missed the point. I explained that their box might be geared to 5-12 year-olds, but their actual target market was the parents who would subscribe for their kids, not the kids themselves. The wording they had provided me was written for the kids and not the parents.
There was also a secondary target market they could target in grandparents and aunts and uncles who may want to send a monthly subscription box as a gift to the young ones in their lives. This client had failed to identify their actual target market through all their research, just like my previous examples had failed to identify their competition.
What I’m trying to say is don’t become a victim of the curse of knowledge. Don’t assume your clients have done their homework and identified their competition. Or their proper target market, for that matter.
A few years ago, I thought only a small percentage of new businesses got it wrong. But my time sitting through dozens of grant presentations has taught me that what I take for granted is not something most people think about. I’d estimate less than 40% of the businesses I saw truly understood who they were competing with.
Take it upon yourself to educate your clients. It will show them your value, and they’ll appreciate you all the more for it. Help them in identifying the competition.
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