One of the most important questions that every business owner and entrepreneur has to have a great answer for is, “Why you?” Why should I or any other prospect in your target market choose you and your company’s products and/or services over every other product and/or service available in your market space?
Unfortunately, not every business leader has a great answer to that question. Frequently, their answers are generic (“We have great customer service”) or unsubstantiated (really, how many people can be America’s #1 ____________). They rarely move the market. And frankly, they’re rarely different.
In fact, today, one of my clients asked me about a referral for an online storage service. Wanting to do some due diligence since I haven’t checked on this for a while, I did a quick check of a few options and reviews in the market today and one of the top vote getters has on their front page the following words.
Why Choose _______? (I’m simply protecting the guilty). So here are their reasons why.
“________lets you store all your files online so you can access them from anywhere at anytime.
- PC, Mac & Linux Compatible
- Sync Multiple Computers
- 100% Automated
- Encrypted and Secure
- Access Files Anywhere
From their perspective, these are their competitive advantages. These are their answers to the “Why you?” question. Yet, as a consumer, don’t these all sound like the same kinds of statements that all of their competitors make? Absolutely, Which means that, by definition, they’re not competitive advantages (i.e. just because you call something a competitive advantage doesn’t make it one).
So, how do you know if your “competitive advantages” are actually competitive advantages? Well, if you use the following five tests, you can be pretty confident that your competitive advantages actually are.
1. Does This Clearly Position Us As Different From Our Competitors?
If everyone is saying the same thing (“We have great customer service”), that “competitive advantage” can’t be an advantage. Nor can being a little bit better. No customer or prospect can tell the difference between a business/product/service that’s 5% or 10% better. Who cares?
A few years ago, when I was working with a credit union and I asked them the “Why you?” question their response was, “Because we have great customer service (I told you I hear this one all the time)” When I asked them about their competitors and what they would claim to be their competitive advantages, no one knew what their competitors claimed. So, I pulled up their competitors’ websites on the video projector and guess what? Exactly. Every single bank claimed that they had the best or superior customer service.
On the other hand, one bank, TD Bank, went at this a different way. They redefined customer service as convenience and put some metrics to it. If you’re familiar with them, then you know that they market themselves as “America’s Most Convenient Bank,” which to them means that they’re open 7 days a week and from early morning to early evening (8:30 a.m. – 7:00 p.m. M-F with shorter hours on the weekends). Now, that’s a differentiator.
So, does your competitive advantage clearly differentiate what you’re offering as different from your competitors? If not, head back to the woodshed.
2. Is This Something Our Prospects Actually Value?
In other words, it’s not unusual to find a business that’s in love with their own ideas. “What do we think our customers would like?” seems like an innocent question. However, it’s usually interpreted as, “What would I like?”
As the creator of something, we usually fall in love with the thing we’ve created. Widget X can do 734 different things. It has the latest whiz-bang technology. It “slices, dices and makes thousands of Julienne fries.” but rarely are those the things that prospects value.
In general, prospects value the results or benefits far more than the features. They don’t value complexity, they value simplicity. They just want something that works and solves their problem as painlessly as possible.
So, if you’re creating a software product/solution and you’re talking tech, that’s rarely what the prospect wants (unless you’re selling to another techie). It’s not what normal people value. What they value is the end result. “What used to take you 20 minutes and 32 steps to complete can now be done with 3 steps and in less than 60 seconds using our new proprietary XYZ system.”
If you want to create market moving competitive advantages, make sure you focus on what your prospects value, not what you value.
3. Is This Specific/Can it Be Quantified?
If you were listening to a pitch and someone said, “We can save you money?” and another person said, “We can save you 22.4% a year on your office supplies,” which one is more powerful? Obviously, the one that’s more specific.
I have some clients who have a real estate brokerage and when we were wrestling with how to differentiate what they do from others, one of the things they said was, “We’re really good at helping people find their homes fast without having to look at a lot of homes.” I said, “How many homes on average do you need to take someone to see before they find their dream home? They said, “We don’t know, maybe five to ten.” I said, “Why don’t you go back through your records for all the transactions you’ve done this year and count up how many homes people visited before they found the home they bought.”
So, they went back through their records and discovered it was an average of 4.7 homes per client. So, we created the “Five and Done” program, which truly is a great differentiator in the DC market. Busy people don’t want to “waste” their time looking at a ton of homes. Time is too precious. So, Barsch Realty effectively markets itself as the place where busy people go to find their dream home (where it takes their typical client only 4.7 home visits before they find the home they want to buy).
So, if you want to create competitive advantages that will move your prospects to take action, make sure they’re specific and quantifiable (if possible).
4. Is This a Deal Closer?
This is one of the best decision criteria for a competitive advantage. If you suggest that something is a competitive advantage and it doesn’t close the deal, then it’s not a real competitive advantage. On the other hand, when Zyrtec started using the ad campaign that Zyrtec works two hours faster than Claritin, it was a deal closer. First, because it caused prospects to doubt Claritin’s efficacy and secondly, because it promised to solve an allergy sufferers most pressing problem faster (by two hours over the market leader). If you’ve ever suffered from an allergy attack you know that two hours matters!
Likewise, when Southwest made the decision to not charge for bags when every other airline was, that was a deal closer. I can’t tell you how many people I know who just assume that going with Southwest will be cheaper because they don’t have to pay for their bags. Yet, when I check flights, frequently, even with baggage fees, other carriers are cheaper. That doesn’t matter. Because “Your bags fly free” is a deal closer for a lot of people.
That’s when you know you have a great competitive advantage—when it moves someone to choose you and your products and/or services over others in your market space.
So, when you look at your current list of competitive advantages, does each one move prospects to say, “I choose you!” If not, go back and rework each one so that each advantage you list actually moves your prospects to take action.
5. Is this Difficult for Our Competitors to Duplicate?
One of the great cries of the competitive advantage movement is, “Is this sustainable?” meaning, is this a competitive advantage that will last for some time vs. something that will be easy for others to replicate. For example, the TD Bank competitive advantage is difficult to replicate. Not because it’s hard to expand hours, but because few banks are willing to spend the money to pay for extended hours and hire additional staff. The cost related to those extra hours is a strategic choice very few are willing to make—which is why few have even tried to replicate it since TD Banks started doing it years ago.
On the other hand, if everyone in your industry offers a 7-day free trial and you decide to double that and offer a 14-day free trial, that’s not very sustainable because that’s a rather easy change for a competitor to make.
So if you want to find a great competitive advantage, look for something that’s hard for others to duplicate. For example, I live in Charleston, SC. For the last couple of years, the readers of Conde Nast have rated Charleston as the #1 Destination City in the US. That’s hard to duplicate (at least for 12 months, and then your city would have to make changes to unseat Charleston). I also love celebrity competitive advantages (like celebrity endorsements or celebrity names attached to a product like the George Foreman Grill or celebrity use, etc.). Why? Because that’s hard to reproduce. No one else can claim that (fill in the name of your favorite celebrity) uses their product because they use yours.
So, there you have it. Five tests you can use to measure whether or not an idea you have for a competitive advantage, actually is a competitive advantage.
1. Does this clearly position us as different from our competitors?
2. Is this something our prospects actually value?
3. Is this specific/can this be quantified?
4. Is this a deal closer?
5. Is this difficult for our competitors to duplicate?
To your accelerated success!
P.S. If you have any other questions you like to use or any examples of great competitive advantages you’ve seen others advertise, why don’t you add them to the comments section below so we can all learn from them (Note: If you’re reading this by email or RSS, click here >> to add your comments)