Competitive Advantages
How does your company stand out from its competitors?
By Rachel Kellogg
Do you know your company’s competitive advantages? They’re the reasons customers have for choosing to buy from your company over the competition, according to Jaynie Smith, author of Creating Competitive Advantage: Give Customers a Reason to Choose You Over Your Competitors (Currency, 2006). And they clearly and easily answer the question, “Why us?”
“When you have and can articulate competitive advantages, you build confidence and remove the risk of clients going elsewhere,” Smith explains. “But companies aren’t identifying their advantages because they don’t know how.” And not being able to tell your customers why they should pick you, Smith says, can be detrimental to your business.
Only two out of the 1,000 CEOs of middle-market companies Smith questioned could explain how their companies are different (and better) than their competition. But it isn’t just CEOs who need to worry about advantages. “Anybody who touches or sees the product needs to be able to communicate the company’s advantages,” Smith says. “Everyone else just needs to support them.”
Your competitive advantage is probably something that you don’t realize you already have. Smith recalls one oil company that realized it hadn’t missed an oil delivery in 45 years, and that became one of their advantage statements. “You don’t have to use money as a competitive advantage,” Smith says. “Compete by doing things differently.”
Here are five ways to identify yours:
1. Get your team on the same page. Everyone in your department needs to be able to agree on at least one competitive advantage. Ask the group to tell you what they think the competitive advantage of the company is to find out how many different perspectives you have to work with. Then you can narrow it down and communicate the best ones to the group.
2. Examine all of your deliverables. You can start by thinking about every process that happens in each department of the company. What are your company’s deliverables besides the product? How you deliver the product is often more important than the product itself. What does the company do to get results? How outstanding is your response time – or anything else that you don’t charge for?
3. Make competitive advantage positioning statements. These statements are measurable, objective, not stated by the competition and not clichéd. It’s best when you can be specific with statements like, “Ninety-five percent of our calls are answered in less than a minute.” Saying you offer great customer service or have a great reputation is expected – and are things your competitors would also claim.
4. Conduct market research. Ask existing customers what is most important in their buying decisions. Why did they pick you? Would they recommend you to their friends, and why? Fewer than 10 percent of middle-market companies conduct research, so 90 percent are just guessing what their customers want.
5. Integrate and communicate your competitive advantage. Consider putting policies and procedures in place to make sure what you’ve determined to be important continues to be a priority. If you’re going to say your advantage is that your response time is better than the rest, you’ll want to make sure it really is. And don’t forget to spread the news to everyone, not just your managers. Your sales team and customer service reps need to be able to tell clients why they should do business with you and not the other guy – or gal.
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