Four ways to gain competitive advantage

We are often asked how organizations can better differentiate themselves in highly competitive industries. They understand that not being able to stand out minimizes their ability to secure new business without lowering prices. Those organizations that do a better job at differentiating – and communicating their differentiators – cave in less often.

Here are some strategic considerations that can help your organization better differentiate, and in the process, better stand out.

  1. Discover what you are delivering but not taking credit for in your sales message

Even if it is a given in your industry, it can help to build confidence with prospects, and remind customers why they choose you. Always make sure statement metrics can be validated, as in true!

We’ve learned in working with organizations in hundreds of industries that there is often similar messaging within a market that everyone feels compelled to say. It can be things such as “in business for x years,” “we’re the company you can trust,” or “we’re there when you need us.” Because everyone says them, claims like these lose their ability to help any company close a sale.

Yet, we’ve also learned there are many items that companies deliver every day that no industry company is touting. This may be a good starting point for building your message that better differentiates you. For example,

  • A bank could claim: “We passed 100% of our regulatory compliance checks during the previous year.” (Even though regulatory compliance is a fundamental responsibility of banks, not all banks pass 100% of their compliance checks).
  • An architecture firm could claim: “90% of our clients came from referral or are repeat clients.” (How many competitors are claiming this, even if they can?)
  • A manufacturer or distributor could claim: “We have had less than 1% return for the last 3 years.” This is something potential buyers want to know, and it can impress them that you care enough about this deliverable that you track it, and then communicate it.

Tout your performance record every chance you get, do so in a way that is true and accurate for your company and relevant to your customers. If competitors don’t do this, good for you.

  1. Same product or service commoditized but with a competitive advantage message

Some companies have a hard time finding their competitive advantages (aka unique selling point, differentiator, etc.). If you are in an industry where every competitor does things pretty much the same way, what reason does a customer have to choose your business over any other?

One of the best ways to stake out a competitive advantage is to take credit for what everyone else in your industry is already doing. State “it” before your competitor does.

An interior design firm claimed: “Our AutoCAD design allows for same day changes and saves you ten days in project scheduling.” If most design firms have that capability but don’t spell out the value to the prospect, they might think their technology is inferior.

  • What if your product or service is considered a commodity but you have different attributes?

One of our clients a few years back was a regional pest control business that was trying to find new ways to differentiate itself from the competition. At one of the workshops we led with the top management, we went through all the possible competitive advantage statements, and talked about everything that might be considered special and noteworthy about the business.

One of the top executives mentioned, “Well, we do a lot of training.” One of the other executives was not convinced that this was a valid point of difference – “Heck, everyone in our industry does that – it’s required.”

Don’t homeowners paying for any service want to know the individuals delivering the service are well trained? Of course, they do, but companies rarely talk about this as an attribute. Don’t take for granted that which is taken for granted!

We dug deeper with the team. It turns out that this service company, like all of its competitors, spent a significant amount of time training its employees every year – everything from technical requirements to safety regulations. But no one – not this company or any of its competitors – used “training” as part of its competitive advantages in their marketing or sales messages.

This was a great opportunity – a hidden gem of competitive advantage.  We did some more research and were able to accurately describe that the company spent over a million dollars a year on technical, safety and environmental compliance training for its employees – and this became one of the key elements of the company’s revised marketing and sales messages.

Subsequently, we have had other service companies – a commercial HVAC firm, window installers, landscape companies – reveal the same investments.

So even if “everyone else is doing it,” there still might be a competitive advantage lurking in some of the most mundane or expected practices at your company.

Even if “everyone is doing it,” they might not all be “saying it.” So maybe you should – in a way that is true and accurate for your company and relevant to your customers.

  1. A competitive advantage is the best strategy to counter price negotiations

If you and your sales team are not able to spell out the value of what you deliver, then you are accepting commodity status in the marketplace. Caving in on price is the path of least resistance for sure but shrinking margins is the sure path to losing. Hold your price position by spelling out what you deliver that customers and prospects take for granted:

  • If you deliver frequently on short notice, tell the customer how often and how much added manpower it took you to do that for them. If you can quantify that investment, even better.
  • If your business provides documentation, explain how much you invested to keep your accuracy rate significantly above industry average. If you can quantify the cost to your customer of an inaccurate order (time invested by their staff, lost productivity, lost production), and add that to your competitor’s bid, then that might give you a value that exceeds competitor pricing.
  • If you have an extraordinarily high immediate resolution rate of customer issues, tell them. Once again, the cost of a complaint to your customer may be high in terms of time and resources. If you can provide a value to your quick resolution, that could be valuable.
  • When your staff are more qualified than your competitors and you invest annually in keeping them above the fray, describe it. This can be especially critical in highly technical fields where it may take considerable research and training to address customer issues.

But do it before you get into price negotiations (the best defense really is a good offense); tout your differentiation on your website, in your brochures, in your line card, at the beginning of your sales presentation.

If you wait to express your organization’s differentiation from competitors until you are deep into negotiations, that might be too late. Your organization needs to consistently and constantly communicate your value proposition all the time. That way, when you communicate a capability that is better than competitors, buyers will already associate that benefit with you, and may have already done the cost-benefit analysis that leads them to paying more money up front.

  1. Set up Strategic Partner Alliance strategic partner alliances where you may fall short

No business can be all things to all customers, but we can deliver the majority of what customers need from us by making good arrangements with strategic alliances. If you are having trouble with delivery, make an alliance with outside vendor who does just “delivery,” freeing you up to focus on your product.

By contrast, companies often evaluate their “core competencies” and determine they could benefit from outsourcing. When this happens, it’ll be a lot easier to secure that business when you can communicate a quantified value.

We worked with a PEO (Professional Employer Organization) that was able to quantify how much less time a each week (down to the hour!) an organization would spend managing payroll, benefits, and other HR activities if they were to outsource to them. When they converted that time investment into money, the PEO suddenly looked less expensive.

Never claim a subjective competitive advantage

We are all bombarded by sales and marketing messaging every day, so much so that most of us have learned to tune out the noise. But, when you stop and listen, or read what is being communicated, you will often find inflated claims about a company, their service, or the results their customers experience. When you see those and they are not validated, confidence is lost.

We call those “self-declared” competitive advantages. If you are claiming to be the “best in the industry,” “the largest,” “the premier,” “the most resourceful,” or “the most experienced,” you are inviting ridicule when you cannot support those claims with facts.

Subjective claims are no substitute for quantified proof that you can, and have, delivered as promised. We have worked in more than one industry where a website review of a dozen providers revealed that nearly every company in the industry claimed they were the largest.

If any of those providers had said they “sold 500 units more than anyone else,” or “have 20 more offices for local presence than anyone else,” then that could have been viewed as proof (if the claim were true). But no company clarified their claims of being the largest, so it felt like comedy when the next provider makes the exact same claim as everyone else, with no supporting proof.

If you are the largest in the industry, then you might say “we serve 25% more companies than our nearest competitor.” Be sure you can prove it. Rest assured, your competitors will check to see if you are telling the truth, and if you’re not, then they will use that against you in a sales encounter.

Self-declared or self-aggrandized claims lose credibility, and most people have learned to tune them out. We frequently see companies whose entire communication relies on unsubstantiated self-declared claims. In other words, most of what is conveyed gets tuned out.

It is so much better to validate and then communicate a substantiated claim. When you are able to do this, you are able to differentiate effectively.

As you review your verified messaging, you may come to realize that in some instances, your organization is the only one in the industry that offers something, or does something no other provider does. These claims can be especially powerful, and they might look like the following:

  • We are the only company that offers same day shipping up to 6 p.m.
  • Our company is the only one with the technology to cut and deliver your materials within 4 hours
  • We are the only company that stocks ___ (fill in the blank; this is a good claim when you are a sole supplier for your territory)
  • We are the only company who staff our help line with degreed engineers
  • We are the only company whose service techs are all industry certified

Many companies have competitive advantages, yet don’t communicate them, or don’t understand how powerful they can be as differentiators in a highly competitive market.

Getting competitive advantages should start by looking within to see what is currently being delivered and how. Chances are, you’ll find value that may seem obvious to you, but somehow remains hidden to prospects and customers.

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