How to beat the new competitors

I attended a marketing conference organized by the Canadian Marketing Association (CMA)  recently. One of the topics that attracted me specifically was how to beat the new competitors.

Here is a case study used at the conference:

Silver Circle, a family run restaurant has been around for over 80 years. When Mr. Miller took it over from his father, the restaurant was facing fierce competition. In recent years, many new competitors, including bars, clubs and restaurants had been built in the neighbourhood adorned with luxurious decor and fancy names. In comparison, the Silver Circle seemed old fashioned and couldn’t attract new customers, although the food was known to be delicious, the customer service great and the price very reasonable. What suggestions would you make to Mr. Miller in order to change the situation?

Mr. Miller hired a marketing agency that suggested that he change the restaurant name from Silver Circle to Five Circles. A special part of the marketing strategy was the logo design. The agency emphasized that the logo should be six large circles instead of five circles.  After Mr. Miller changed the name and the logo of the restaurant, magic happened. The passers-by started to notice there was a mistake in the logo and stood in long lines to get into the restaurant. Mr. Miller felt really embarrassed when a lot of customers pointed out the mistake to the waiters/waitresses.

It’s interesting that after pointing out the mistake, people felt satisfied that their observation skills were rewarded. They started to pay attention to the amiable environment, polite service and tasty food. Many new customers told Mr. Miller that they hadn’t previously noticed his great restaurant.  Since then, the Five Circles restaurant has become very famous and attracted people from other towns. When Mr. Miller asked the agency why the marketing strategy had worked, they told him that looking for mistakes is one of people’s favourite activities. People who found the mistake, pointed it out and enjoyed a meal had a triple dose of satisfaction.

The agency taught Mr. Miller the value of understanding human behaviour, which is critical to being able to compete. Finding ways of competing that go beyond providing a good product or service are already separating winners from losers. Future commercial competition will be driven by this kind of differentiator.