My Approach to Business
Typically speaking, all businesses are in one of two positions: they either own the market share and are trying to maintain it, or they have a small market share and they want to increase it. Over the past twenty years, I’ve had the pleasure of working with countless business leaders. Regardless of which of the two positions their company is in, when they come to me for advice, my first step is always to talk to them about their competitive advantage.
What do they do better than anyone else? What is their unique value proposition? Why does their company exist?
This is my go-to starting point, because like businesses, consumers are also in one of two positions: they either use an inferior product/service because they don’t know that something better exists, or they don’t use any product/service because they don’t know that the category exists for the solution to their needs.
For example, I’m a first-time pet owner and a few years ago, I ran into several health-related issues with my pet. After spending several thousands of dollars at the vet, I learned that there was such a thing as pet health insurance! I obviously knew about health insurance for people, but I had no idea there was a category of health insurance for pets. Once I became educated on this category, I quickly became a customer.
As this example shows, the key to aligning the position of a business and the position of a consumer is always education.
Which brings me back to a company’s competitive advantage. Obviously the first step is to identify the benefits that makes your product/service unique. Next, make sure it is clearly defined in both internal and external communications. Finally, determine why consumers are not buying from you. In my experience, it’s usually one of two reasons.
Reason number one: the competitive advantage is not strong enough to compel the consumer to change what they are currently doing. The fear of loss is three times greater at motivating people than the opportunity for gain, which means your competitive advantage must be at least three times stronger than your consumers’ fear of loss if you expect consumers to make a change.
Reason number two: your competitive advantage is strong enough, but your consumers don’t believe your truth claims. They’re thinking to themselves, “If your product/service really does what you say it does, it would be foolish not to buy from you, but it sounds too good to be true.” Consumers have been taught that if it sounds too good to be true, it probably is, and this kicks in their fear of loss.
This is where marketing comes in. Once my business clients have identified their competitive advantage and made it as strong as possible, my next step is to help them educate their consumers. I do this by telling my client’s story. A story that validates their truth claims. That way, when their consumers are finally in a position to purchase the product/service and are exposed to the competitive advantage again, it has been reinforced so much by my marketing materials that they not only believe it, they act on it.
The end result? Consumers discover a product/service that is either better than what they were already using or they learn about a new solution that they never knew existed. Businesses see a positive shift in their market share. It’s a win-win.