Competitive products, superior service and killer relationships -
the need
How do you build a sustainable competitive advantage for your
company? With so much changing these days, where does your product have
to be? How about your service levels? What about your relationships?
To build and maintain a sustainable, competitive advantage, you need
to have competitive products (i.e., as good as your competition);
superior service (better than your competitors); and killer
relationships (i.e., to die for).
Products
Many people try to build an advantage by having superior, a.k.a.
killer, products. Any advantage gained here will not be sustainable.
Hard products (i.e., goods) are most susceptible to reverse engineering
and replication, quite often at a lower price.
This is the most competitive category, and as a result, most
price-sensitive as well. Given there are six billion people out there,
it is very difficult to stop others from taking your products and
improving on them, and usually for a cheaper price.
Reverse engineering is common these days. To maintain a competitive
sustainable advantage at this level is nearly impossible.
Services
Services are a little easier to maintain as an advantage over
competitors.
They are more intangible, and therefore less price-sensitive. As a
result, you might be funded better with services, and you will be able
to deliver services that are superior to your competitors.
To go killer in this area, however, is just too expensive to provide
in a cost-effective manner. There are financial parameters and
constraints to the services you may provide. Additional service costs
money. As a result, a sustainable competitive advantage does not lie in
this area alone.
Here we are at last.
The area that doesn't cost a fortune, and that generates big rewards
for those who use it.
You care, and you need and want to demonstrate this care to your
customers. You can do this through your relationships with them.
A relationship, developing that human connection with another person,
is most cost-effective, paradoxically yields the highest results.
The more that can be done in the area of relationship-building, the
better. Think about it. How many places do you shop right now that
aren't necessarily the cheapest, but you go back anyway? It's all
because of your good relationship with the people there. Relationships
People aren't interested in how much you know until they know how
much you care. The impact of relationships on competitive advantage is
amazing.
We have heard many stories of people going out of their way,
including one person actually driving over 100 miles to get his car
serviced with a particular company, because "the people really care."
Priceless
In this case, the owner of a Mercedes dealership (near where the
customer used to live) had heard about the life-threatening illness of a
customer's nine-year-old boy, a child who happened to love hockey. The
dealership owner made arrangements for the child and his dad to attend
an NHL hockey game, where the son was also acknowledged by the team
(complete with a hockey stick autographed by all the players).
That special night and the stick made a significant impact. They were
tokens of hope for the boy as he went through numerous difficult
surgeries. The cost to the owner of the dealership was a pair of his
season tickets and a phone call to a friend.
The impact on the boy and his dad was priceless, and now, after
moving, the dad will never consider having his car serviced anywhere
else, even though there is another Mercedes dealership in his new town.
The advantage of superior or killer products may be anywhere from six
months to two years, but after that it is gone. Due to market forces -
hungry competitors willing to offer the same for less - the advantage
gained will become unsustainable from a cost point of view.
- MAKEiTBUSINESS |