Over the years, it’s been interesting to observe unique and innovative ways that businesses create value for their clients or customers. One of my favorite questions in interviewing prospective clients is “what is the one thing you do better than your competitors”? In short, what is your right to exist?
Often, business owners can clearly articulate their ability to identify and curate assortments or services to a specific target customer. Some deliver the lowest price or have a product whose uniqueness alone creates unusual demand. Others can’t clearly identify how they create value for their customers or clients, and when questioned further, claim to be average to good at most things that matter. Those are the ones that are in real trouble; if not today, then certainly tomorrow.
I define value as benefits received for burdens endured, and there are many ways to create value for customers or clients. Businesses that compete on price, service, assortment, or convenience can all be successful by understanding what their customer values, then organizing themselves to deliver that unique value. In the retail arena, Costco and Family Dollar deliver value based on price, Apple and Uniqlo on fashion, Walgreens of CVS on convenience, and Lexus or Ritz Carlton on service. These retailers focus on the ONE thing that separates them from their competition, and find ways to continually improve their value proposition to extend their competitive advantage in the marketplace.
But sometimes, businesses organize themselves to fail by trying to be all things to all people. I once listened to a business owner opine that his strategy was not segment the market, since everyone was a potential customer. Others I remember chased the latest fashion trying to emulate their competitors without knowing really knowing why. These businesses were invariably a day late and a dollar short when it came to building the founder’s net worth.
Growing a business profitably isn’t easy. It’s even harder if you don’t have a right to exist. Think about that one thing your business can do better than any of your competitors; then focus relentlessly on what competencies your organization needs to grow, partner with or acquire to enhance your competitiveness. If you take good care of your customers or clients, they’ll take good care of the rest.
As always, we welcome your comments and feedback to our point of view.
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