How to Gain a Competitive Advantage in Any Market

Many business consultants will encourage you to keep your focus on the customer, which to a large extent is good advice. After all, you can’t build a business without customers, but is it really as simple as that? What is equally important is to focus on your core competencies: to identify and develop the things your business does particularly well. Your niche, if you will.

Ask yourself what your business does particularly well. Is it the way you manage customer relationships? Is it your ability to innovate in a particular area? Or is it a unique specialization of skills within your industry? Think about the people who work with you. Why are they there? Do they share any unique qualities? If your employees are few, or non-existent, think about yourself, your partners, or the people you would like to hire and consider the same questions.

Your core competencies are not simply your ability to produce a particular product or service, it is the one or two outstanding abilities of your business.

It is better to be outstanding in a few areas than to be average in many. In other words, focus on what you do well.

Building on your strengths can also be an effective way to distinguish and distance yourself from your competition.

For instance when Megan Driscoll founded EvolveMKD, a New York public relations firm, she carved out a niche by specializing in two subjects she knew well: beauty and health care. Driscoll’s decision to specialize led to so much growth in her small company that she had hired 10 employees within its first 6 months to keep up with demand.

Of course, you don’t like to brag, but if you were pushed, you would be able to come up with a few things that your company does very well. You may be masters of marketing, or you may have a secret blend of 11 herbs and spices that really set you apart. When people talk about your company, they talk about these things. These are your core competencies. They are the thing you do that makes you the most money. They make your company special, and your products desirable in the eyes of your customers. You will know you’ve landed on a core competency that can be developed into a competitive advantage if it is:

1. Valuable – it allows your company to exploit opportunities or neutralize threats in the business environment.

2. Rare – it’s a capability that few, if any, competitors possess

3. Costly or difficult to imitate- it’s a capability that competitors can’t easily develop either because they don’t have the ability, depth of understanding, or corporate culture to support.

4. Non-substitutable-Your offering can’t be replaced by another.

According to Leslie Balmorth, COO of Tauber & Balser, “Today, firms need to become famous for the specialized services they provide to remain competitive in the business marketplace.” A core competency especially has the potential to give you a competitive advantage when it is valuable and unique from your customer’s point of view.

Just remember to hold back from developing too many core competencies! You can get stretched thin, and have your focus divided. As Marty Neumeier says, “The three most important words in differentiating your brand: focus, focus and focus.”

Invest your resources into a few areas where you know you can make a good return on them. Identify and develop your company’s niche offerings and watch as you distinguish yourself from your competitors and gain the advantage in your market.

WHY QUALITY CONTROL WILL INCREASE YOUR BOTTOM LINE

If you want customer loyalty, your business needs quality standards.

Ray Kroc, the founder of McDonald’s was once visiting Canadian McDonald’s franchise and found a single fly.  Two weeks later, the franchise was shut down.

The founder of Mrs. Fields Cookies once tossed out over $500 worth of cookies and temporarily closed a store because its samples were not acceptable.

Colonel Sanders, the founder of KFC, once destroyed his proprietary cooking ware on the spot at a franchise that was not operating up to his standards.

What does quality control mean to your business?

Your first goal must be to meet your customers’ minimum expectations 100% of the time.  Fall short, and you may not get a second chance.  Your customers want to know that they can depend on your products and services to be everything they expect them to be; each and every time they use them.  From your customers’ perspective, quality means ‘dependability.’

Building customer loyalty demands that you consistently delight your customers.  Set your own minimum standards higher than your customers’, and then continuously raise the bar on quality.  Not only will your customers be pleasantly surprised, they’ll be induced to return to your business.  As J.C. Penney said: “It is the service we are not obliged to give that people value the most.”

Raise the bar on quality once, however, and you must never lower it back down.  Once your customers experience an improvement from your business, they will begin to expect it.  Anything less after that can shake your customers’ confidence in you.  This shouldn’t be a problem, if you take the time to properly prepare.  Make improvements to your business through rock solid systems, and they will stick like glue.

Build Loyalty.  Set your business minimum standards higher than your customers'.

Incidentally, maintaining the improvements you make to your business must go well beyond quality inspection checks.  Inspection checks are useful, but they only deal with symptoms.  True quality control will mean getting to the root of problems when they arise.  Tools that help track data within your business can be helpful to highlight elements that may not be performing to standard.

I like how H. James Harrington sums it up: “Measurement is the first step that leads to control and eventually to improvement.  If you can’t measure something, you can’t understand it.  If you can’t understand it, you can’t control it.  If you can’t control it, you can’t improve it.”

Keeping strong, lifelong customer relationships takes more than a smile and a friendly handshake, it takes consistent effort.  The effort your company puts into maintaining quality standards will be rewarded by your customers’ loyalty; an investment that is well worth the effort in the long run. When your customers can depend on the quality of your service or product they will trust the integrity of your business.  Hands down, this is the most valuable way to make a sale.  Gaining the loyalty of your customers and their network can mean multiple and ongoing sales, ultimately growing the bottom line of your company.

 

 

 

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