How Do You Compete? - 6 Rules to Win

What happens when thoughts like these cross your mind, "The competition is bigger than us, they have more money, how do we compete?" Let me answer that question with another question, "Do you know why your customers choose you over the competition? If not, it is time to learn why and give your customers a reason to choose you over the competition.

Compete with a Strong Competitive Advantage

Jaynie L. Smith, author of Creating Competitive Advantage says this, "The biggest marketing flaw in most companies is their failure to fully reap the benefits of their competitive advantages. Either they think they have a competitive advantage but don't. Or they have one and don't even releaze it. Or they know they have a strong competitive advantage but fail to promote it adequately to their customers or prospects." I recommend Jaynie's book.

Create a Competitive Advantage

So how do you create a competitive advantage? First, grab a pen and paper and get ready to go into brainstorm mode. You have your paper and pen, right? So spend a few minutes writing down why you think your customers choose you over the competition. Once you have a good list, let's make sure it passes the competitive advantage rules.

6 Important Rules

In Jaynie's book she says a competitive advantage must follow 6 important rules:

1. Competitive advantage is objective, not subjective: You can't just say people do business with you because you have great customer service or good quality.

2. It is quantifiable, not arbitrary: Let's compare the following statements, "We have great customer service." or "Ninety-five percent of our business comes from referrals." The second one passes rule #2.

3. Is in not claimed by the competition: You need to know what the other guy doesn't offer that your customer wants and claim it first.

4. It is not a cliche: Once again you can't say you have great customer service, you'll be tuned out, be specific. Something like, you provide service twenty-four hours a day, seven days a week.

5. It has to be true: It has to be true, if it is not true this can ruin your creditability and turn away customers.

6. Your customer has to care about it: You customer must really care about the competitive advantage you are touting, if it doesn't resonate it will do no good.

Here are a few examples of a good competitive advantage statments from Jaynie's book:

Company:

Seitlin Human Resources

Competitive Advantages:

"We save clients $30k to 50K annually in human resource management costs"
"We maintain a 97 percent client retention rate"

Once you have created your competitive advantages and vetted them with your customers. Make sure your employees know your competitive advantages by heart, so if anyone ever asks, "Why should I choose you over the competition?", everyone is on the same page.

Warren Buffet said this regarding competitive advantage, "The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and above all the durability of that advantage."