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.
As I've traveled around the country giving keynote speeches the past 22 years, I've been amazed to find that 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. Exactly 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:
- Your name
- Your company
- 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 its 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 customer's 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 and 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? That is, 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? That is, 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.
ARTICLE TAGLINE FOR DR. TONY ALESSANDRA
Dr. Tony Alessandra has authored 13 books, recorded over 50 audio and video programs, and delivered over 2,000 keynote speeches since 1976. The ideas in this article, and many others, are adapted from Dr. Alessandra's book, The Sales Professional's Idea-A-Day Guide (Dartnell). If you would like more information about Dr. Alessandra's books, audio tapesets and video programs, or about Dr. Alessandra as a keynote speaker for your group, call (800) 222-4383 or visit his website at http://www.alessandra.com