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How can we separate ourselves from our business so we can look at it in a fresh way? What’s a quick and simple process for bench-marking against the best the market has to offer?

Find our analog.

Every business has an analog, a commercial doppelganger that shares its business model or competitor makeup or customer metrics, or (almost) all of the above. By studying our analogs, we can see our own challenges, and solutions, more clearly. We can shed some of our baggage and filters when we look at the way another business or industry parallels our own.

Recently, for example, we met with a colleague whose client, a high-end restaurant company, was looking for strategic direction. What would be the best way to market the brand to its diners and how could that be done in a way that would add to the company’s exit value?

Instead of seeking comparisons within the restaurant industry, we considered other industries that had similar operating/marketing challenges. One that came to mind was casinos, especially the high-end casinos that target high-stakes gamblers who will make repeat visits. The restaurant company anticipated generating a substantial amount of its revenue and profitability on high-net-worth individuals willing to drop $1,000 on a four-top, and the corporate gatherings that would wow their clients’ clients. Families that save up for a yearly dinner are nice, but they don’t quite pay the rent. In our restaurant example, my friend’s client had much more in common with the gambling industry than with most of their peers in their own industry.

In another situation, we found a surprising number of parallels between hospitals and shopping malls. Both develop and operate large facilities, but each relies on allied businesses to bring customers into those facilities. For shopping malls, it’s the stores that drive most of the traffic, while hospitals rely on doctors to bring in the patients. Both malls and hospitals will develop a branding mission for themselves, identifying their niche or the type of end user they will seek to attract. Then, they will invest in their facilities to service that user and ally with retailers/physician practices that can bring those end users to the door. A high-end mall, for example, might invest in landscaping or courtyards, sound systems or seating areas that appeal to upscale customers. In order to get a return on that investment, they will seek retailers, restauranteurs, and other tenants who seek the same clientele. A hospital might invest in equipment and facilities that emphasize diagnostics, research, cancer, cardiology, gynecology, or other specializations and then work to cultivate physicians who will make sure that capacity is utilized.

No analog is a 100% match, of course, and it is easy to stretch the comparisons too far in looking for commonalities. When seeking the analog for our own businesses, it’s important to avoid our tendency to see patterns that aren’t really there. Why, then, should we look at analogs at all? Why not stick to our own industries and our own competitors, comparing ourselves with the people we know best?

The benefit of analogs is, in fact, our lack of familiarity with them. Free from the constraints of our careers, our filters, and our industry slogans, we can use analogs to gain a fresh perspective on our own world. There is no perfect mirror image in an analog, or in any company other than our own, but the reflection we see in another industry won’t need to be refracted through our professional prisms, either.

Analogs are the friend-of-a-friend in competitive analysis. They’re really about us, but we remove the personal connection enough to get a more dispassionate view.

When we benchmark against a specific competitor, it’s easy to get bogged down in discussions about the salesman they hired away from us, the contract they won with a shady bid, the product customers like for no apparent reason, and so on. Our deep insight actually gets in the way of our understanding, as the details of our experiences clutter our view.

Finding analogs is a stimulating exercise, especially for companies embarking on a new marketing campaign or developing a new strategic plan. Sometimes, we have to look elsewhere in order to see ourselves most clearly.

Quadrant Five taps the full potential of strategic customer relationships to build both today’s profitability and tomorrow’s exit value. We make the critical connection between internal financial drivers and the value perceptions of A-List customers, generating returns for clients who must:

• Identify the shortest path to stronger profitability.
• Build enterprise value in advance of a liquidity event.
• Develop a strategic plan that can be implemented successfully.
• Perform customer/market due diligence on an acquisition target.
• Accelerate profitable integration of a merged business.
• Protect against customer turnover or lost sales.
• Recoup the cash that is wasted on unprofitable marketing/sales initiatives.

To learn more, please contact Michael Rosenbaum (michael@quadrantfivefocus.com) or visit our website (www.quadrantfivefocus.com).