In the past the business was fairly successful. Now it’s barely providing a living and the outlook is no better.
You are worried about surviving.
You are worried about your competitors taking away your market share and your customers.
Nothing is helping.
The cause could be any number of things such as:
The business has weaknesses that are overwhelming it
The business team needs strengthening
The environment has changed and the business has not kept pace
The competition has grown stronger
We can help with all of these and today we will address the competition.
We claim that if you don’t possess a competitive advantage , that is if customers have no specific reason to chose you then you are seen as a commodity and your prospects look for the cheapest provider.
A competitive advantage starts with thinking about customer needs and and your planned solution to those needs.
Take our firm for instance. What competitive advantage does Aron Brajtman CPA’s possess?
We do several things that other accountants don’t:
We help in creating growth in the value of the business.
We charge a flat annual fee paid monthly. We never charge by the hour.
We charge based on the results to be delivered.
We partner with other CPA’s for tax work and other compliance services.
Unless a CPA firm provides features and benefits desired by its customers but not available elsewhere , prospects will look for the cheapest alternative since all CPA firms are the same. That’s what attracts our type of customers to us as opposed to choosing someone else.
A business owner who wants more than just a job for life must design the business to attain some form of competitive advantage.
Your competitive advantage is what drives your customers to call you first instead of going elsewhere.
Competitive advantage leads to above average performance in one’s industry. Lack of competitive advantage implies at best an average performance, or being the same as the rest of the industry. I often hear from business owners that “business is slow, but it’s the same for all of us”. As a result, they all tend towards the average profitability for the industry. Actually, this means that business is slow for all who do not have a competitive advantage. Those with a competitive advantage do better in good times and in bad.
All businesses have their unique strengths and weaknesses, but there are two types of competitive advantage available to every business; low cost and differentiation.
Low cost means the ability to generate a service or product at lower cost than others because of some cost advantage. Selling at lower prices without a cost advantage will fail in the long term. Others will lower their prices as well and everyone will go broke.
Cost advantage may be achieved through economies of scale, proprietary technology, etc. Cost advantage is of benefit in commoditized industries such as chiropractors, accountants, lawyers, window installers, car dealerships and basically anyone selling a product or service that has many competitors selling the same thing. Instead of claiming you are the best, offer the same value at a lower price.
In a differentiation advantage, the vendor provides some value or attribute valued by the consumer that is unique and not elsewhere available. For that unique value a buyer will pay more. As opposed to low cost advantage, there may be several differentiation strategies available to all industry participants. For instance, lawyers may specialize in specific crimes; accountants may specialize in wineries, etc.
Achieving a differentiation competitive advantage means deliberately focusing on serving well defined, specific markets and rejecting those that will not see value in the differentiation. We all can choose our competitive advantage, assuming we have one. Not having one compels us to be an average performer financially, and our business will remain stuck like its many competitors, with everyone waiting for better times.
Basically there are three main ways in which you can compete in the marketplace:
By serving a niche market better than anybody else
On the individuality of your product or service
Which of these is the better long-term strategy? Undoubtedly a lower price than the competitor is an immediate advantage – but will it deliver a continuing competitive edge? Differentiating your products from your competitors will provide a much harder to match advantage for your business.
No because your competition will not roll over and die. They will lower their price. So you are both making less.
Differentiating your products from your competitors will provide a much harder to match advantage for your business.
Differentiating your offerings provides the business with a focus on who it wants to serve and it provides you as the address that your market will turn to.
Perception is the reality-people buy based on differences They Perceive. It’s the differences that potential customers perceive that make them choose one business over another. And those differences make the customer feel more confident about their final decision as well.
Unique Core Differentiators (UCDs) clearly articulate what makes your business different. They are the special things about your product or service or business that compels customers to buy from you rather than your competitors. Well-formed differentiators target your customer’s ‘hot buttons,’ real buying concerns, or key frustrations. In one statement it educates them about exactly why they should buy from you.
The best sales people are ‘canned’. They know better than to wing it through a prospect meeting. They have a systemized sales process to work with. And the most effective system is relationship selling – selling based on getting to know a customer’s real needs and fitting your product to them.
Relationship selling doesn’t involve high pressure or manipulative methods. The salesperson here is a problem solver, a helper, and an advisor to the customer. They learn to identify the customer’s needs and sell them a solution that fits the need – not just a product. It moves the emphasis from price to value as a differentiator and provides a powerful advantage over competitors.
Do you know…
How to use objections to further the sales process
How to prepare a sales pitch so that saying ‘yes’ is the next natural thing to do
How to build relationships so strong that your clients won’t think of going anywhere else
Guarantees, and especially those that are in some way even better than ‘money back’, are a proven way to attract prospects. But how to develop such a guarantee?
The best thinking on the issue of developing guarantees now involves using the concept of ‘risk reversal’. There is no better way to change the perceived benefit of a product or service than to offer an ‘extraordinary guarantee’ that switches the risk of making a wrong choice from the buyer to the seller – risk reversal. In effect a risk reversal guarantee inspires the prospects trust by announcing: “I’m so confident in our products, services and business that I’m prepared to put my own money where my mouth is and make it impossible for you to lose out on this transaction.”
By knowing what the customer really wants, and then making it clear that they will get the result they’re after from this deal or else the seller shoulders the consequences, makes their buying decision so much easier. And that’s what offering an extraordinary guarantee can do.