I’m currently working with a couple of SME businesses. They work in very different markets, but both have thrived in recent years, growing both revenues and profits.
It’s clear that they’re gaining market share and so there’s something that customers love about them that their competitors aren’t providing. Yet, when I’ve asked the leaders of these two businesses how they win and what sets them apart from the competition, they’ve struggled to articulate a coherent answer.
The problem is, if you can’t define how you win, you run the risk of being unable to sustain or improve your competitive advantage. The good news is that you can determine your competitive advantage by doing two things.
First, talk to your customers. One of my clients has been asking its customers to provide brief video testimonials and has been blown away by the response. Not only do their customers love this business, but they are happy to say why they love it. This has given the company’s leaders new insights about how to develop and market their products.
Second, identify the skills and capabilities that underpin your success. Given your customers’ feedback, ask yourself what it is that your business is particularly good at doing, and how much better or distinctive you are in comparison to the competition.
It’s the combination of this outside-in and inside-out perspectives that help you identify your real competitive advantages.
Take the success of Dyson, for instance. Dyson’s managers could have taken the success of their vacuum cleaners, and their customers’ love of the product’s design, to believe that Dyson was a design-led homewares business. This outside-in thinking would have meant that they could have decided to produce washing machines, kettles or TVs, for instance.
But they didn’t do that. Instead, the company’s managers combined their customer feedback with a clear understanding of the organisation’s core capabilities. They realised that what really set Dyson apart from the competition was the company’s unique air-moving technology. Yes, the products looked distinctive and visually attractive, but it was the performance of the products that made the difference. As a result, Dyson has built a £6 billion ‘air-moving’ business, creating hand dryers, hair dryers, air purifiers, humidifiers, fans and heaters alongside their vacuum cleaning ranges.
So, how does your business really win? And what steps are you taking to sustain, improve and drive the secrets of your success?
Off The Record: I Wanna Be Yours by Arctic Monkeys
I wanna be your vacuum cleaner, breathing in your dust
I wanna be your Ford Cortina, I will never rust
If you like your coffee hot, let me be your coffee pot
You call the shots, babe
I just wanna be yours