Research describes 17 "competitive lock-out" activities

Citation

(2001), "Research describes 17 "competitive lock-out" activities", Industrial and Commercial Training, Vol. 33 No. 3. https://doi.org/10.1108/ict.2001.03733cab.002

Research describes 17 "competitive lock-out" activities

Research describes 17 "competitive lock-out" activities

Keywords: Competitive strategy, Customer satisfaction

Conventional bricks and mortar companies threatened by e-business start-ups need to develop skills to "lock out" these new competitors from existing customers.

They should start by looking at 17 critical "competitive lock-out" activities, says Professor Colin Coulson-Thomas, head of the Centre for Competitiveness Studies at Luton University, who has published research on the subject.

Coulson-Thomas, executive editor of Developing Strategic Customers and Key Accounts … the Critical Success Factors (published by Policy Publications in association with the University of Luton at £395), says threatened companies need to raise two sets of barriers. The first keeps existing customers in. The second keeps competition out.

By studying 194 companies, Coulson-Thomas's research team found that those companies which are most successful at developing their important customers are more effective at a whole range of activities that raise both barriers.

The top three critical "lock-out" activities, at which the most successful excel, are offering: value-added services (78 per cent of the most successful are very effective at this), improving product/service quality (78 per cent), and building and nurturing working relationships (72 per cent).

Other important lock-out activities are: being easy to do business with (69 per cent), treating the customer as a partner (75 per cent), providing fast-track complaint resolution (60 per cent), and anticipating special requirements (60 per cent).

Researchers divided the 194 companies in the study into eight groups. They found that the top group – those most successful at developing customer relationships – were "very effective" at an average of 11 of the 17 lock-out activities. The least successful were not "very effective" at any of the activities.

Coulson-Thomas says: "Bricks and mortar businesses face a major challenge from their clicks and mortar competitors. In many cases, the bricks and mortar firms have advantages because they possess large customer bases which the e-business start-ups don't.

"Bricks and mortar businesses also have existing fulfilment, service and support processes and systems which new businesses do not necessarily have.

"But unless the bricks and mortar firms become more effective at competitive lock-out, which includes using e-business techniques themselves, they'll lose ever larger numbers of customers to their new competitors. And they should beware: many start-ups will be wising up to competitive lock-out as they build their own customer bases."