Focussed Data and Insight – The Foundations of a Competitive Advantage

competitive advantage

The key to unlocking a powerful strategy is to ask a simple question: what is our competitive advantage?

As Jack Wech once notably stated, “if you don’t have a competitive advantage, don’t compete.” If you know your competitive advantage then you are aware of how the company can compete and make money. Today, companies have the opportunity to generate a vast amount of data but much of it is stored away for later retrieval (that somehow doesn’t happen). When it does, there is a shocking lack of desire to work at revealing insights that will provide them with a strong competitive advantage.

In a recent survey by McKinsey, only 35% of 2,135 global executives believed that their strategies rested on unique and powerful insights. In addition, only 14% of executives surveyed placed novel insights among the top three strategic influencers of financial performance. McKinsey offered that one likely reason was that widespread availability of information and the adoption of similar sophisticated strategy frameworks create the impression that “everyone knows what we know and is probably analyzing the data in the same way that we are.”

If this is the case then companies are missing out on developing compelling competitive, if not leadership, strategies. Being able to analyse data and see what others don’t is the very foundation of competitive advantage. The Nobel winning Physicist, Albert Nagyrapolt said, “ Discovery is seeing what everyone has seen but thinking what no one has thought”.

Marketers need that inquisitiveness to be able to provide that leap of discovery to create a distinctive brand advantage. However, they need to be armed with the right data, that which has been targeted to seek out the relevant. It is then easier to distil into stimulus that enhances the chance for discovery. The Zen Buddhist saying illuminates this: “For information add something everyday, for wisdom, take something away”. Too many assumptions about market and people behaviour are made from either poorly constructed research and or intuition that are inherently flawed. Professor Duncan Watts, former professor of sociology at Columbia University and currently principal research scientist at Yahoo has observed that due to the advent of web services we now have huge amounts of data available that provide a source for more accurately studying social networks. He says that we use intuition for making assumptions about people’s behaviour but this is inherently flawed: “One consequence is that we now need to start suspecting our intuition. We can’t help thinking that we know why people do what they do or what they are going to do. But whatever hypothesis or intuition you have, however self-evident it may seem, when you test it against the data, it’s wrong- not every time, but very often.”

We therefore need a different approach to gaining insights that are supported by greater granularity of data. An example of an outmoded model is where Advertisers use focus groups and support their findings with limited quantitative research. This they then use to simulate a consumer. Get one small part of this simulation wrong and you have a different consumer with different thinking and very off-strategy behavioural traits.

If, however, you have the tools to collect billions of clicks a day and to analyse actual behaviour, you can then use your intuition and experience to better understand what is really happening in the market place, predict outcomes and use this as the basis for the creation of insightful and effective strategies. A very cost effective and strategic tool in this process is Natural Search. If expertly used, this will help you to get your site onto page one and keep you there, through site analysis, key word relevance, and content refreshment. The most advanced search companies have real-time data, multilingual capability, competitor positioning data and customer journey analysis.

What has thrown a spanner in the works is the development of Google’s Personalisation. With the advent of Search Personalization, Google wants businesses to pay for their previously ‘free’ natural search results and revert to their ‘Paid-For’ Advertising (PPC) model. Broadly there are two types of search: Organic/Natural Search and Pay Per Click. Simply put, Natural Search provides the type of timely data that helps businesses to make better strategic and tactical decisions, whereas PPC is bought traffic based on key word auctions: the concept is that marketers bid for their ads to appear on certain keywords, the higher the bid and more relevant your content, the better the chance of getting the top position. This can be expensive.

Personalization of search results is the single biggest change to the search landscape since the appearance of Google itself. This means there are no longer Monolithic Search Results – Google’s “One size fits all” policy is gone. In simple terms there is no longer a single “page one” for specific search terms. There are hundreds. This will dramatically increase pressure on big Brands to ramp up their Page Ranking Positioning. The driver behind this is Google’s desire to achieve huge increases in PPC Advertising. However, there is a definite preference exhibited by users for organic results over PPC. Of the two types of listing Natural Search accounts for 92% of Search Engine clicks, whilst historically, 70% of web users ignore PPC Ads, using Natural Search results alone.

That does not mean that PPC has no place in a well-rounded search engine marketing strategy. PPC can provide a tactical boost to the more strategic organic search. The two are very effective if used together. However, it is important to note that Organic has the additional benefit of producing a far better return on investment.

Due to Personalisation, global businesses and small businesses alike will no longer be confident that their websites can be found in natural search. Businesses spending millions online will lose a key measure of success in terms of above the line brand presence in natural search. As search results spread and soften (away from the monolithic results) it will be increasingly difficult for businesses to target multiple customers with the same generic content.

So who is affected by this: every business with a website concerned with their natural search positions; any business spending millions each year on PPC because they are no longer confident of their natural positions; the entire global SEO industry and indeed anyone who reports on search engine positions as a first measure of success; and every industry relying on good website positions for business or brand exposure. The net-net of this is that without being able to report on genuine (personalised) organic positions they will all struggle. That brings us full circle to competitive advantage and the importance of getting accurate, timely, data to enable a company, big or small, to make better strategic and tactical decisions.

Being able to reveal what Google’s Personalisation conceals is a significant but ultimately rewarding challenge.

Garry Titterton is CEO of Intelligent Positioning, Author and Lecturer.