Wednesday, September 03, 2008

Competitive Advantage

Seth Godin explains Competitive Advantage. When I work with clients, we always work on messaging (or USP). What is your Position in the marketplace? It is usually defined as the Customer asking "What's In It For Me?" Your USP is the answer. And it isn't a list of features nor a larger bucket of minutes.

Seth explains: "Some of the ways you might build or maintain a competitive advantage:"

  • Access to hard-to-replicate Talent
  • Hard-earned skills
  • Higher productivity due to insight or organization allowing you to be cheaper
  • Low cost of living for you and your staff allowing you to be cheaper
  • Protected or secret technology or trade secrets
  • Existing relationships (switching costs working in your favor)
  • Virally organized product and organization
  • Large network of users already and a network effect to support you
  • Focus on speed
  • Monopoly power and the willingness to use it
  • Unique story that resonates with the worldview of your target audience
  • Shelf space due to incumbency
  • Large media budget
  • Insight into worldview of prospects--making what they care about
  • Emotional intelligence of your salesforce or customer service people
  • Access to capital and willingness to lose money to build share
  • Connection to community
Not on this list, at least not prominently, are "we are #1!", "we are better!" and "we try harder." Cheerleading skills are not a competitive advantage in most settings. And, with few exceptions, neither is "we are new." Also, "we are better and I can prove it," is rarely a successful argument.

I get lists of reasons people should use this CLEC or that ISP or the other VOIP guy. Think about it like you are a Band. Why should people listen to your Music? If you were an artist, why should someone buy your painting? If you were a personal injury attorney, how are you better than that big firm? If you are a Realtor, why you? In some of these cases, it is about WOM (word-of-mouth) spreading and referrals - a great technique that most companies do NOT use. But that will be slow, unsteady growth and has a limit. You need a message and a plan to get it out there. And it is easier today than ever before because great messages spread quicker today.

One final point: It is easier to be the competitor in a smaller world. Find a target market and spread the message there. Not every where to everyone. Disqualify people and prospects. The truth is not everyone IS a good fit for your service. Aim carefully at those that are. Take your best customers - profile them and then duplicate them. Now go sell something.

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