When consulting with businesses, one of the fundamentals I look at is whether their business strategy and marketing efforts are in alignment. Just like a well-aligned vehicle will always move confidently in the right direction, so, too, will a business relationship – provided there’s the right connection between what your customers value, and what you provide.
Many times, I will hear companies boast of offering great quality, cost and delivery; how they are innovators; and how they have the best technical support teams. The reality is that it’s quite rare for a firm to be the best at everything – and often, pursuing such a superlative-laden strategy can often be a suboptimal marketing strategy to pursue.
In most industries, it’s better to simply be mindful of the standard level of performance that is expected to capture and retain customers. It’s a critical line in the sand that distinguishes the heroes from the also-rans. Fall below this level on quality, delivery, innovation or support, and you will lose business. Pricing outside of your value will also cause you to sub optimize. And trying to lead in all of these areas will result in you having no competitive advantage in any – instead, you’ll just be one of the pack.
I encourage you to ask this one question of your management team, sales and marketing team, and customers (both current and former):What is unique about us that compels our customers to do business with us?
If you get a consistent answer, it is likely that you are already aligned properly – you’re focused on winning on that one standard. If you get a wide range of answers, you and your management team may need to discuss where you will get your competitive advantage from, and from where you can shift resources to gain a greater advantage.
Here are a few suggestions to help in this strategic analysis:
- Look at your last five customer wins and drill down on why you won. What is it that led the customer to purchase your product or service, and did the customer easily understand it?
- Where might you be squandering resources on strategies that had little to do with these wins? For example, do you have a wide product range in an industry where a few models would do just fine? What is this breadth costing you? Are you introducing new products that are iterative at a pace ahead of what the market can absorb, and could these resources be more effective elsewhere?
- Are the reasons the customers selected you sustainable? Unless you have a significant volume and process advantage, lowest price is rarely sustainable and/or profit maximizing.
- What prevented you from charging 10 percent more on these deals? Do you understand the price elasticity of your customers, and the true value of your solution?
- Who was the closest competitor on these deals, and what could they have done differently to win? (Lower price is not what you’re looking for here – understanding their Achilles’ heel is what you’re after.)
Once you have completed this analysis, you or your marketing leader should be able to craft a short value statement that captures why your firm is different. Vistage speaker Boaz Rauchwergerchallenges his audiences, CEOs and business owners, to distill what they do to four words that include a verb and captures the essence of what their firm does. For one of my clients, the tagline, “We Turn Your Fuel Into Profits” captures the essence of what they do -- which is to ensure that their customers are always able use their equipment to refuel vehicles, upon demand and with minimal downtime.
Are there other questions that you’ve found to be effective in focusing your team on how you will strategically grow? Feel free to share them with me – they may be the topic of a future blog.