It’s a classic good news/bad news story. The good news is that you have competition. The bad news is that you have competition.
It’s good news because if you didn’t have any competition it would mean there’s not a very real/urgent problem that needs to be solved by a large number of people in your market space (which would be a very bad thing).
On the other hand, it’s bad news because with many competitors, prospects tend to see each option as a commodity play, which then drives down your pricing—unless you can differentiate your products and/or services from your competitors in such a way that those same prospects are willing to pay a premium for your business’ solutions (i.e. think most cell phone makers vs. Apple).
So, the question is, how can you differentiate your business in such a way that your prospects will perceive your products and/or services to be more valuable than your competitors and therefore the preferred option in your market space?
This is critical because if you want to scale your company fast, you need to the preferred option in your market space so it’s easy to drive demand while creating the margin necessary to fuel rapid growth.
To help you out on that journey, here are a few ideas to get you started.
I. Add Something To Your Offerings That Your Competitors Don’t (or Can’t)
One of the reasons why I’m such a fan of the subject of competitive advantage is because it’s a truly strategic question. The reason that matters is because strategy isn’t about what you’ve been, strategy is about who you want to be … and who you want to be may have nothing to do with who you’ve been.
In other words, just because you currently don’t offer anything that’s significantly different than your competitors doesn’t mean you have to remain there. You can, at a strategic level, decide to add something that hasn’t been a part of your past offering.
So, what should you add? Well, in order to make that decision you need to know two things well.
- What your competitors claim
- What your target market prospects urgently want
In other words, you can’t create a competitive advantage sitting alone in your office or talking with other members of your team. You actually have to do some research because you can’t differentiate your products and/or services if you don’t know what your competitors are offering/claiming (i.e. you could be going to market with the same offer/claim they are and not know it).
Likewise, if you don’t know what your ideal prospects urgently want, you could be differentiating on something they really don’t care about, which would technically be a differentiation, just not a competitive one since it won’t drive consumption.
The easiest way to do this is to create a competitive advantage spreadsheet. Write the names of your competitors on the left hand side and then list different categories along the top of each column (like guarantee, delivery, locations, features, etc.). Finally, fill in the columns with what each of your competitors claim on their websites or in their marketing materials.
Once you’re finished with that, you should be able to quickly find where some open space is. Then run that through your grid of urgent wants in your target market until you find something that could differentiate your business that your prospects care about and then figure out how to add that thing.
II. Subtract Something That Virtually Everyone In Your Market Offers
In every market, there are assumptions about how “everyone” should operate. The problem with that approach is that when everyone is operating on the same assumptions, everyone tends to look the same. So, while adding something can differentiate you, subtracting something may be the way for you to differentiate your business as well..
For example, in the banking world, everyone knows you’re supposed to open up a physical branch with tellers, safety deposit boxes and a big vault. However, Ally Bank (and others) have done quite well without any physical branches, tellers, safety deposit boxes and vaults (plus their lower cost basis allows them to do things their competitors can’t).
In fact, I think you’d often find that a lot of truly differentiated companies have done so by subtracting. Another classic example would be Cirque du Soleil. By subtracting three rings for one ring, or by subtracting live animals for costumed animals, etc. they were able to differentiate themselves, while demanding a premium price with a lower cost basis which then created the margin for them to fuel even more growth.
In other words, the future of your company might have more to do with subtraction than addition.
So, take that spreadsheet from above and look at what you and your competitors are offering/claiming then go back through it and ask, “If we subtracted this, would that help drive demand or not?”
You may lose some customers but you just might pick up more. Remember, not everyone wants complexity. Most people just want their solution to work. For example, Basecamp has differentiated itself because it’s not an overinflated complicated project management SaaS product. It’s simple and easy, which means it doesn’t offer everything that everyone thinks you should offer if your offering project management software. However, they’ve done quite well in spite of that. Clearly a lot of people like the simplicity of Basecamp.
III. Speed Your Offer Up
If there’s one thing that virtually everyone wants, it’s more time. If you can offer something faster than your competitors, you can almost always gain a significant competitive advantage. Most of us simply hate waiting. We love speed.
For example, I’ve told the story before about one of my clients, TruPlace (they offer virtual floor plan tours for listing agents and vacation rentals). When we were going through this process several years ago, we discovered that it took, on average 7-10 days from the time a listing agent placed a call until their tour was up online. This was true for all of their competitors. What I knew about their ideal customer (a listing agent) was they wanted to place a call to a vendor and have that tour up “yesterday.”
As we discussed it, it because clear, from a strategic viewpoint, that if we could get a tour done in 24 hours or less, that would be a huge competitive advantage (remember, in strategic thinking, a competitive advantage doesn’t have to be something that’s true of you today, just something you intend to make true of you). Once the decision was made to decrease the cycle time (i.e. increase the speed) from 7-10 days to 24 hours or less, the rest was simply problem solving. No one else was offering this kind of speed in their market space. Even better, no one could easily duplicate it. So, strategically, it was a great decision—and it differentiated them in a crowded market.
Virtually everyone loves a solution that either operates faster (e.g. why do you keep buying new computers) or is delivered faster (think, Amazon two-hour delivery).
So, as you look at your products and/or services, how can you speed up either the process or the delivery? If you can figure that out, you’ll definitely stand out in your crowded market.
IV. Raise Your Prices
In a crowded market space, the natural tendency is to move price downward. This makes complete sense. When you have MaDonalds, Burger King and Wendys all on the same block, it seems “obvious” you should be competitive towards their prices (i.e. play the commodity price game and offer a $1 menu).
However, that’s not your only option because price is more elastic than you think and, in every market, there are plenty of people who will pay a premium price if they perceive they’re getting more value from it.
For example, in the hamburger/cheeseburger world, Five Guys charges $6.89 for a cheeseburger (vs. $1 at McDonalds). Ruby Tuesdays charges $9.89. Cheesecake Factory charges $13.95. A high end restaurant will typically charge around $25 for a cheeseburger. And if you go to the Paris Las Vegas Casino, you can pay a whopping $777 for their glam burger (I know what you’re thinking. What do you get for $777? You get a Kobe beef burger with Maine lobster, imported brie cheese, cartelized onions, crispy pancetta and a bottle of Dom Perignon to wash it down—oh, and the “bragging rights” to tell everyone you know that you once ate a $777 burger when you were in Vegas).
So, don’t always rush to lower your prices. You can often stand out from the rest of your competitors simply by raising your prices (i.e. refuse to play the price wars game). For example, in my market, Jay Abraham, played this card well years ago by claiming to be “the worlds’s most expensive consultant.” That made him standout and he’s done quite well.
Note: just raising prices doesn’t work if people don’t perceive there’s more value for the differentiated price between what everyone is offering and what you’re offering. So, if you raise you prices, make sure you add more value to the price increase or you won’t get the demand increase you desire.
V. Spend More to Attract More
The final way to stand out from your competition in a crowded market is to simply outspend your competitors. In other words, to be omnipresent (i.e. to appear “everywhere.”).
The winner in most markets is rarely the best solution or the best provider, it’s usually the best marketed product and/or service.
Note: spending more money is not a guarantee for growth. There are plenty of companies that no longer exist even though they spent a lot of money on advertising. The problem was their solution. In other words, if what your offering doesn’t deliver exceptional results don’t use this strategy. It will simply bankrupt you.
However, if you do have a great solution that does offer your prospects the result that they want and they prefer your solution over your competitors, then fueling ATTENTION can be a great way to stand out from the crowd. Why? Because most businesses are under-marketed and one of the biggest issues that every company wrestles with in our day and age is … attention.
So, if you want to stand out from the crowd, and you have a great solution, spending more money on advertising so that your ideal prospects can’t avoid but pay attention to you because you’re omnipresent, spending more could be the right way for you to stand out in your target market.
So, as you take a look at your business today, which of these strategies do you think could help you stand out in your crowded market space?
- Add something to your offerings that your competitors don’t (or can’t)
- Subtract something that virtually everyone in your market offers
- Speed your offer up
- Raise your prices
- Spend more to attract more
Whichever one (or ones) you decide on, make sure you start implementing it (or them) today. Speed really does matter here if you want to dominate your market and build a more scalable business.
To your accelerated success!