(As published in the Sunday Star Times, August 2, 2015 – you can read it online here)
Figure out why it is your customers or clients choose you and you’re on your way to gaining a hefty competitive advantage.
Why do people choose, say, Xero over other accounting systems? Why do people fly Air New Zealand over other airlines? Why do people choose Apple and Samsung brands over similar products? Why use Google over other competitor search engines? Why one tradesman over another?
Why do your customers choose you over other competitors?
Do you know?
It pays to know – make the most of it and you’ll grow your business.
So let’s figure out your competitive advantage.
There will be some compelling reasons as to why your customers decide to buy through you. The tricky – but profitable – part is knowing and understanding what these reasons are. Figure that out and you have the opportunity to bring in more potential new customers, which means growth. Go profitable growth!
When I put this question to my business coaching clients, usually their first answers are what I call hygiene factors. They might say their points of difference are: we are really timely, well priced, friendly, professional etc. Whilst these might very well be true, all your competitors will be listing the same things too which makes them hygiene factors – every business has them. These things do not make you original, they are not points of difference, they don’t set you apart in the market.
In saying that, if you thought about some of your hygiene factors in a lot more depth (ask the “5 whys”), you might actually be able to find a true competitive advantage.
Perhaps you are really timely because you have a fantastic GPS system that re-routes you to miss traffic jams to get to jobs. This could definitely be a competitive advantage. Knowing that you were awesome at being on time, you might consider trading on it with a guarantee such as, “We are so sure of being on time that if we are more than five minutes late, we will give you $50 off your job”. Your potential customers might find this attractive and compelling and it will certainly set you apart.
So how do you identify your competitive advantages? Brainstorm with people in your company. Ask your customers. It will be interesting to see how many surprises you get from your customers’ thoughts compared to your own list! Once you have a long list, go through and cross out the things you think your competitors will have also such as those hygiene factors. Prioritise the true points of difference that set you apart and come up with a top five list. This is your gold.
Now you know your five competitive advantages, what can you do to maximise new sales as well as retention of current customers? Does the list help you to better identify what sort of customers you should be going for in terms of potential new business wins? It may require an update and change of your sales and marketing approach…
Are you making the most of these competitive advantages? Spend time thinking deeply about them and identify some new tactics to try to take advantage of them.
And remember: competitive advantages are not timeless. What is leading today could be gone tomorrow. Think Encyclopedia Britannica, Nokia mobile phones, paper phone directories, video and cd stores. The way to stay ahead of the game is to not rest on the laurels of your current competitive advantage, but to have an idea of what your customers will want in three years, five years and beyond. It will put you in great stead for being successful in the future. Have you put enough time into thinking about this? Why do your customers choose you?
Still struggling to define what your competitive advantage is? Why it is customers choose you? Contact me for some business coaching Auckland and I’ll help you nut it out and get to the crux of what can set your business apart from your competitors: firstname.lastname@example.org