What's Your Competitive
Advantage?
by
Dr. Tony Alessandra
How many
times have you been in a selling situation where the customer's sole focus
was on price?
Anytime your
customers can't tell the difference between your product or service and
your competitor's product or service, the customer will buy based on price.
You must be able to differentiate your company, your product, your quality,
your service, and yourself if you want the customer to stop focusing on
price and start seeing you as a partner, and not just as a supplier. You've
got to show him how you are different.
I've traveled
around the country giving keynote speeches the past 22 years, I've been
so amazed to find how many salespeople do not know and cannot articulate
their competitive advantage to their prospects and customers!
How can they
expect their prospects and customers to give them their time and attention
when they cannot tell them in a concise way what they can do for them
that no one else can do?
Companies
or sales reps who don't understand their competitive advantage say things
like, "Our product is better quality" or "Our service is
better."
Even if a
company is has better quality or better service, it won't convince its
customers just by saying so because many of it's competitors will be saying
the exact same thing! You have to define quality. You have to show what
outstanding service looks like and how your service differs from the competition.
How can
you demonstrate your competitive advantage?
Suppose
someone walks up to you at a business conference or social gathering,
introduces herself, and asks you what you do for a living.
What would
you say?
Did you have
any trouble? Did you stumble? Do you know what sets you apart from your
competitors? If this was hard for you, you're not alone. If you were to
ask the average car dealer, computer store or furniture manufacturer what
they do for a living they'll probably say, "I sell cars, computers
or furniture." But what does every other car, computer or furniture
company say? Exactly the same thing!
So what
should the businessperson who understands his competitive advantage say?
How about
this for the car dealer.
"My
name is Mike from Competitive Motors. We've found that there is a lot
of confusion in the automotive market today because there have been over
150 new models introduced in just the past three years. We've developed
a computer book that profiles everything the buyer wants in a car and
in less than five minutes, identifies the models most likely to fit their
needs."
Your Statement
of Competitive Advantage has four components:
- a statement
about a typical problem experienced in your target market
- an intriguing
statement about how you can help solve that problem
The statement
of competitive advantage is a 30-second statement of what differentiates
your company in the marketplace.
Here's
another example:
"My
name is Marlene, and I'm owner of the company 'The Prescription for Doctors.'
Physicians today are being pressured by insurers, employers, and patients
to cut health care costs. Yet overhead costs for physicians are constantly
rising. We provide a service that allows the physician to spend more time
with patients and cut overhead costs at the same time resulting in better
quality care at a lower cost. It's just what the doctor ordered!"
Here's
one last example:
"My
name is Beth. It's nice to meet you. I'm with a company called 'The Greatest
Advertising Agency in the World.' We've discovered that almost every successful
product has either been the first entry in it's category or it has been
able to create a new category in the mind of it's customers. What we do
is help companies who are launching new products or having trouble with
old ones ensure that their product is positioned to win!"
That really
does set you apart from the competition and it makes you sound like a
polished expert right form the start. But how do you determine exactly
what your competitive advantage is?
The best
way to determine your competitive advantage is to first break down the
components of your product or service into four distinct categories, Competitive
uniquenesses, competitive advantages, competitive parities, and competitive
disadvantages.
Let's
look at each one individually.
Competitive
Uniqueness:
What can
I do for my customers that no one else can do? What can I offer that no
one else can offer?
Competitive advantage: What can I do for my customer that my competitor
can also do, but I can do it better and I can prove it?
Competitive parity: My competitors and I are the same here -- no real
differentiation.
Competitive disadvantage: Where does the competition have an advantage
over me?
You may want
to do your analysis by market segment, by competitor, by product, or all
of them. But knowing your competitive position will quickly get you on
your customers wavelength.
Let's say
a pharmaceutical company just got FDA approval to sell a new drug. This
company now has a competitive uniqueness with this drug, no one else has
it.
An example
of a competitive advantage might be where two companies market the same
drug, but one is a large well-known company and the other is a small relatively
unknown company.
Even though
both are selling essentially the same product the larger company has an
advantage because it's well-known and people ask for the drug by its company
name because of its wide name recognition. If no real competitive advantage
exists in your product, try to focus on your company reputation, your
excellent service, your responsiveness and reliability or any other factors
than can positively differentiate you from your competition.
Next,
let's look at what things are the same between the competition and you?
What do you
have that is exactly like the competition but is still important to the
customer? Birth control pills are a good example. Several ethical drug
companies make different formulations, but all with similar records for
preventing pregnancy. This is competitive parity.
And finally,
what specific disadvantages does your product possess?
What does
the competition do better than you do? Your drug may have more side effects
than the competitor's. That's a competitive disadvantage.
In the examples
I've just given, we were talking about the whole product as being unique
or the same. But what do you do if you have a product where some features
may be unique, some may be advantages, some may be the same and some may
be disadvantages.
Say for
example, that you are selling a fax machine that is plain paper, that's
(parity), because others do too. But yours will interface with your phone,
computer or car telephone, that's (uniqueness). Yours also has the highest
resolution available, that's an (advantage), 300 number memory, another
(advantage), but it will not do broadcasting and polling, that's a (disadvantage).
Here's
an example in a service business.
Federal Express
will get it there over night, but so will other companies, so that's (parity),
by ten-thirty (used to be an advantage but now that's also parity). But
FedEx has a provable better track record, an (advantage), and they can
tell you in real time, exactly where your package is, that's a (uniqueness).
I can't stress
enough the importance of doing this analysis and knowing your competitive
advantage. By doing this analysis you'll be in a position to help your
customers distinguish between you and your competition. Once they see
your uniquenesses and advantages, it will be easier for them to make a
decision in your favor.
I'm sure
you can see now why it's so important to know what you have to offer that's
unique. But you may be wondering, what you'll do with that information
once you have it? How will you get it across to the client?
You're going
to use this information in every step of the sale. Your entire selling
effort will be built around your competitive strengths.
When you
are targeting your market, you'll be looking for those clients whose needs
are most likely to match your uniquenesses and advantages.
When you
contact clients you'll open the conversation by letting your clients know
what you can do for them that no one else can do.
During the
exploring phase, you'll be asking questions that will uncover client needs
in the areas where you have uniquenesses & advantages.
When you
are collaborating with the client, you'll keep the clients focused on
your uniquenesses and advantages and show him how they match his needs.
During the
commitment phase, you'll be summarizing all of the competitive advantages
that your product has to offer and during the assuring phase, you'll be
measuring how well your uniquenesses and advantages are serving your customer.
If you clearly
know your competitive advantages and uniquenesses and are able to articulate
them clearly to prospective customers, you will rise above your competition
to make more sales, more profits and more long-term satisfied customers.
©2000-2003, By Tony Alessandra, Ph.D. All rights reserved, including
the right of reproduction in whole or in part in any form, without permission
in writing from Dr. Tony Alessandra. For more information about Dr. Alessandra's
products and speeches, call his office at 1-800-222-4383 or visit his
website at http://www.alessandra.com
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