Red Ocean vs Blue Ocean Strategies

Red Ocean vs Blue Ocean Strategies

(Disruption versus Displacement)

By Ian Richardson, Managing Partner, Richardson & Richardson Consulting LLC


The first time I heard about Red Ocean vs Blue Ocean was in the book “Blue Ocean Shift” by W. Chan Kim and Renee Mauborgne. The basics of the terminology break down to (and I’m paraphrasing) a competitive market (Red Ocean – ‘blood in the water’) versus a greenfield opportunity (Blue Ocean – no competition yet). Any organization needs to define which strategy they are going to pursue for which market – you need to figure out red ocean vs blue ocean strategies.

(Red Ocean) Displacement Sales

In certain markets, there is a very small or non-existent “Blue Ocean” opportunity at first glance. Tax Planning for business owners is one such example – everyone generally has a tax accountant. You’re looking to market and “displace” your competition for new business. I.T. managed services are another example – Most businesses have an MSP already, so if you’re trying to acquire a client, you’re going to be displacing the current provider. These displacement opportunities stem from either a better price (reduced cost), better value, or some combination of the two.

Marketing for a displacement sale is all “luck and consistency”: You get lucky in terms of someone being receptive to your messaging due to a precursor event. That event could be a service delivery issue, loss of revenue that dictates reassessment of budget, ownership or management change, or simple due diligence process. Knowing exactly when those events occur is impossible to predict with any level of accuracy, so consistent marketing and business development activities “creates” luck – If you happen to call Company A every 60 days, then you’re only ever 60 days away from an “event” that causes them to be receptive. Pretty good odds you’ll get a seat at the table when that event occurs.

(Blue Ocean) Disruption Sales

Blue Ocean, or “disruption” opportunities are a bit different. You still need consistency (all marketing requires consistent action to be successful), but you’re focused more on education of your prospect. An example is cryptocurrency – Not everyone is aware of “what cryptocurrency is”, much less the financial opportunity in investing in Bitcoin or some other blockchain driven commodity. Education around the topic to qualified prospects allows someone to capture the initial market – you’re “creating” demand for the offer through education. This “disrupts” normal thinking (I need to invest in stocks, bonds, and mutual funds) with a new concept (I should buy cryptocurrency).

Education generally means you need to develop “content” for your prospects to consume. Blog posts, webinars, podcasts, whitepapers, case studies, and other such collateral are good examples of content.

Red Ocean vs Blue Ocean: What content should I create?

A common question Carrie and I come across is “what content should I create?” It’s difficult to know what your target audience wants to consume. You can always connect with your current customers and ask for feedback around their experience. Questions such as the list below can be helpful in gathering why current customers buy from you and can be turned into content to attract new customers.

  • What are the top three things you find valuable about our relationship?
  • What makes you continue to be our customer?
  • What items do I need to focus on improving to make your experience that much better?
  • What problems do you wish my team could help manage for you?

Another option is to ask your target market what they’re struggling with. Entrepreneurs enjoy talking about their own businesses. Three questions that have been helpful for me to explore with my own target market have been:

  1. What’s the most recent achievement your team has accomplished that has made a difference for your business?
  2. What’s the opportunity you’re planning on pursuing next?
  3. What’s a challenge you’re currently working on or planning to work on?

These questions are liquid gold in terms of content creation – your prospect has told you what they’re proud of, what they’re planning to pursue to make money, and what they’re struggling with or focused on fixing. All you need to do is create valuable education around those topics, with clear calls to action on how you might be able to help, and your prospect will engage further.

A final thought

Figuring out  how to pursue your Red Ocean vs Blue Ocean opportunities is a challenge and consistency is paramount. Plans do not self-execute, but if you plan the work, and work your plan, your plan will work.

My dear friend Walter Crosby of Helix Sales development has a recent article around Sales Teams and the concept of Predator vs. Prey sales reps that fits in nicely into this category. Take a read when you have a moment here. 

If you’re struggling to figure out a Red ocean vs Blue Ocean opportunity strategy, or get your team onboard with the need to do so, Richardson & Richardson can help. Check out our case studies for stories of organizations that we’ve assisted with similar issues and download our white papers for deep dives on tools you can use in your organization. If you’re wondering where to start, book a complimentary session with one of the Richardsons today to come up with a plan on how to move forward.

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