Working Your Competitive Advantage

Published: Jan 24, 2019
Modified: Mar 25, 2020

By Jaynie L. Smith

How important is your customer?
Recently, I decided to upgrade my PDA and, rightfully, feared what an undertaking it would be. (A techno geek I am not.)

The salesperson at the phone store was bright and eager to solve my problems. Unfortunately, I had a “lemon product.” I have, to date, spent nine hours at his counter—and I’m not done yet.

Here’s the point: the salesperson was reprimanded repeatedly by his manager for helping me. "We are not supposed to do this,” the salesman said. "We are told to wait on new customers and make new sales."

He then lamented, “But if I don’t help you and others, then you will return the product and no one wins.” He told me his friend worked for a competitor and got in trouble if he did not help the customer.

"You won’t be here long, will you?” I asked. He told me he was already working on his résumé and had only been there four months. He explained, “Management doesn’t understand the customer. They don’t listen to feedback from the customer on the products. They make bad management decisions, such as keeping the store open on Sundays with a consistent record of no traffic, when we have another store one mile away.”

This is an example of a good salesperson who will leave an undesirable employer. Because he’s good, he’ll likely end up working for an employer who cares more about overall customer satisfaction and good service.

Why the best sales people work for the best companies
Good companies spend time answering the question, “why us?” In other words, why should I buy from them and not their competition? Good sales people can smell a company that can answer that question as well.

I speak to CEO and executive groups nationwide and am continually told that their sales managers complain that the sales staff wants them to “lower the price” so they can sell more. However, when a company creates, measures, and maintains strong competitive advantages that are most valued by the customer, that company will attract the very best salespeople and customers. It starts with strategic decisions and operational changes that make a difference.

What does your customer want?
In my book, Creating Competitive Advantage (Doubleday, 2006) I devote a chapter to what I call “dangerous disparity.” This is the gap between your customer’s priorities and what you offer to the customer. It directly affects your bottom line and retention (customer and employee) rate.

Here are some of the “dangerous disparities” that can topple a company:

  • Use of imprecise, vague language that customers don’t notice, believe, or understand. Sometimes the sales message is loaded with clichés and jargon, that is, “Our superior customer service will exceed your expectations.” The same old blah, blah, blah.
  • Claiming a competitive advantage you don’t consistently deliver, that is, “We respond within 24 hours,” when in fact it may be days before someone returns a call to the customer.
  • Stressing advantages that are not important to your customers, that is, “You should buy from us because of our advanced technology.” Gee, that’s great, but perhaps what the customer really wants is more user-friendly customer support.
  • Failure to stress specific advantages for each target market. Each market has its own specific hierarchy of buying criteria. You can determine these criteria by making a small investment in market research. When you clarify what each target market values, you will close more sales.

Good salespeople seek out companies who excel at avoiding dangerous disparity. If your company avoids these issues, you will close more sales and price will be less of a differentiator.

Sometimes even the very best companies struggle with this issue. I have asked over 3,000 CEOs and nearly as many salespeople to state their number one competitive advantage. The results were astounding. Only a handful could state their company’s differentiator. Here is what I have found:

  1. Companies don’t have a competitive advantage.  Jack Welch said, “If you don’t have a competitive advantage, don’t compete.” There are thousands of companies who have painted themselves into a commodity corner. They allow price to be the “deadly” tiebreaker. It is deadly because these companies often race their competition to the bottom of the margin ladder. When they have a clear competitive advantage, price is much less of an issue and sales close rates increase substantially.
  2. Companies mistake “strengths” for competitive advantages. Here are the top responses CEOs, executives, and sales and marketing professionals give when asked to name their number one competitive advantage: good quality, reputation, knowledgeable employees, responsiveness, great customer service, flexibility, innovation and trustworthiness.

    These words are subjective and have lost their power due to hackneyed usage. They are simply strengths that at best, place you at parity with your competition. Here’s a better strategy: JTech, a Florida manufacturer of restaurant “table ready” beepers held competition at bay by touting, “Of the 50 major restaurant chains in America, 100% use JTech pagers.”
  3. Companies don’t use metrics to support their competitive advantages. You can often turn subjective claims into meaningful competitive advantages with use of company metrics. For example, instead of saying “good quality,” you might boast “less than one-half of one percent returns.”
  4. Companies don’t consistently communicate their competitive advantages. My company has done scores of in-house competitive advantage drill downs. We ask 25 employees in one room, “What is your company’s number one competitive advantage?” Guess how many different answers we get? About 25. What does this suggest? Try it at your company and see what responses you receive.  If you don’t internally agree on your competitive advantages, how can your customers and potential customers understand what you are known for? Once you identify your competitive advantages they must be communicated internally and externally-—loud, clear, and often.
  5. The voice of the customer is often ignored. Large companies spend big bucks on customer market research but often fail to heed its findings for any number of reasons (fear of change, internal bureaucracy, lack of resources, etc). On the other hand, midmarket companies don’t invest in it at all. (My research shows only bout 10% of mid-market companies invest in customer market research.) They say “We know our customers well so we don’t need it, and they don’t understand the ROI."  It is only through solid, frequent “outside” market research that a company learn the hierarchy of their customers' buying criteria and hence, know which competitive advantages matter.

It’s a veritable battlefield out there. We have to be much more disciplined about where we stand in the competitive marketplace. Competitive advantages don’t fall out of the sky; they require operational decisions and strategic planning. Salespeople absolutely must be armed with meaningful, quantifiable competitive advantages that build confidence in the buying decision. When one builds confidence in the buying decision and removes risk for your customers, they will minimize price as an issue and you will close more sales.

What are you waiting for? One way to get started is by taking AMA’s seminar Selling Your Competitive Advantage. This course will help you determine your company’s competitive advantages and how to use them in the sales process so you can close more deals without lowering your price.

Smart Advantage, Inc. © 2007. All rights reserved.

About the Author(s)

Jaynie L. Smith is president of Smart Advantage, Inc., a marketing/management consultancy. She is the author of Creating Competitive Advantage (Doubleday Currency, 2006). Her “Competitive Advantage” proprietary workshop was selected as one of AMA’s leading new courses for the 2007 curriculum.