The idea of eking out a bit more margin by beating up your vendors, tweaking manufacturing processes, or hiring a new channel sales manager may sound good, but these moves will minimally affect the bottom line.
Turning Point Strategies
Edited by Lawrence Kren
If you truly want to set a goal of gaining significant market share this year, make a commitment to a new and better business strategy.
When reassessing your current business strategy, start with three main objectives:
- Establish your company's difference in the marketplace. Identify what truly makes your customers buy from you and not your competitors.
- Clearly articulate that difference across all aspects of the company.
- Consistently and boldly focus on exceeding your customer's expectations based on your unique claims.
First, when identifying and establishing your competitive advantage, be sure to understand what really matters to your target market. Differentiating your business on something your customers don't care about makes no sense. Second, your difference must be something a competitor isn't known for. Lastly, when choosing a differentiating claim, be sure it's something you do well and can deliver on time and time again. The worst thing in business is to underdeliver on what you've promised.
And remember, one of the most important points when establishing your difference in the marketplace: what not to differentiate on. Never differentiate on price. Low prices are difficult to sustain over time and will only serve to chip away at your margins and profits.
Once you choose a unique and compelling differentiator, you'll want to unleash it across the whole organization. This may force you to change business processes in production, sales, compensation, human resources, or other departments.
For instance, should your differentiating claim be to promise products with zero defects, you'll want to change your compensation structure for factory workers. Rather than basing compensation on the volume of products produced, you would shift to a structure offering bonuses based on zero defects.
Finally, once your differentiating claim is established and you have implemented the claim across your organization, you will encounter the toughest part of all sticking to your guns. Prospects and customers aren't interested in your company's "business strategy." They're interested in what's in it for them. If your communication with customers and prospects is anything but overt, clear, and consistent, they simply won't get it. They won't understand why they should choose you over your competitors.
From marketing collateral, to your delivery drivers, to the phone demeanor of your receptionist, your claim of uniqueness should shine through. The goal is to make a statement. Your employees, as well as customers and prospects, should be able to recite back to you what the statement is.
Ed King is a Corporate Rejuvenation Specialist for Turning Point Strategies, a brand consultancy (www.TPStrategies.com)