Do you REALLY have a Competitive Advantage? In March, our CEO groups were treated to an eye opening presentation. Jaynie Smith taught us that while WE think our companies have a Competitive Advantage (CA), that doesn’t mean prospects and customers do!
Leaders think their companies have a CA, because their teams try to produce the best possible products/services and market/sell it to their prospects. We forget that a CA is in the eye of the beholder: the customer. Prospects have lots of options (and with mobile search engines and e-commerce and related rating systems, it’s easier than ever to check out competitors). Similarly, if customers have not had an A+ experience from all perspectives, it’s easy to be picked off by a vendor with CA that outshines yours.
The solution is to understand what a real CA is! As we went around the room, CEOs told us that their companies had products with superior quality, more efficient and effective, delivered on-time, had stronger customer relationships, had more expert staff; were more customer-responsive, etc. As Jaynie pointed out – we all use the same “blah.. blah” – without proving it. that’s why prospects move on to someone else.
A true CA is something that simultaneously offers desired benefits (e.g., ROI, convenience, etc.) and also reduces risks. Using objective, measurable criteria, you need to quantify it for your target customer.
For instance:
- TD Bank is “America’s Most Convenient Bank for small businesses who use branches because they are open 7 days a week and longer hours on week-days. But if you’re a “digital” banking customer, it’s not.
- Vistage Worldwide’s has helped CEOs become more effective to grow their companies better for over 60 years; Dunn and Bradstreet evaluates its impact regularly and finds that companies who join, grow 2-3X faster than competitors. That’s a CA to leaders committed to growth; not to status-quo lovers.
It reminded me of a story about a company selling sunk pumps. The industry leader was selling a $30,000 unit. A new competitor entered the market and sold theirs for $25,000. As sales dropped, the sales people demanded that their company drop the price – which would have made sales unprofitable. A consultant was hired to compare the two units; they discovered that their competitors’ unit needed to be replaced every 3 years, which meant major disruptions to company operations on that day, and that service cost was $5000. The main company’s unit had to be serviced every 10 years at a cost of about $3000. With that, management changed its marketing and raised the price! The result: sales increased and surpassed initial levels!
You can learn more by reading her books Competitive Advantage and Relevant Selling.
When was the last time you really analyzed whether the CA you developed years ago is still working for the different client/prospect segments you serve? How easy is it for a prospect who quickly scans competitors to see your CA? Share with us your experiences and what you’re doing to develop a more effective CA.