The second Secret of Business Success is to “Stay Different”. This tends to imply that your business is different in the first place. In fact all businesses are different from each other but, unfortunately, many of them behave as if they are a bit embarrassed or uncomfortable with being different and seek solace in similarity with competitors. Whilst you may win your share of a rapidly growing market with this sort of approach, you are unlikely to sustain it and it will not allow you to build real value over the longer term.
It is those things that are different about your business that can make it hard for others to emulate what you do and so provide you with something that allows you to stand out from the crowd. As long as this is an attractive attribute of your product/service it can form the basis of a competitive strategy for your business. It will form all or part of your Competitive Advantage.
Your competitive advantage comes from the one, two or several things about your business that, taken together, persuade customers to choose you above the competition. What is your competitive advantage? Why do people buy from you? I have asked these questions of many hundred business owners/managers and I normally get one of two responses: a blank look; or an uncomfortable few moments followed by something that has just occurred to them. If I sit quietly for a bit I normally then get one of three most common answers, which I have paraphrased somewhat below:-
- “We have better customer service than our competitors.”
- “We are cheaper.”
- “I don’t know.”
The first answer is very common and if it’s your response too it just shows you haven’t really thought about this deeply enough. It is rarely this on its own or at all. There is normally something more distinctive hiding in the background in any successful business. Less successful businesses may not have developed or exploited their difference in a meaningful way.
If your answer is the second one, you are probably wrong. It is very unlikely that you will be the least cost producer of what you do and so you will not have a defendable price proposition in the market.
If you don’t know, then at least you are honest, but shame on you. You should know.Understanding, developing and protecting your competitive advantage is your principal responsibility as a business owner/manager, if you really want to build a successful business.
It is surprisingly difficult for most people to really pin down the source of their competitive advantage and to decide what to do with it, without a little help from someone else. Next time, I’ll talk a little about where your competitive advantage comes from, as there are very few sources, how you can identify it and just what you can do with it.
Bye for now.