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What Do You Do Better?

What Do You Do Better?

What Do You Do Better?

John Holobinko, Managing Director, Business Reimagined, LLC

In a declining or flat market, growing a business can be challenging. But similarly, in a rising market, growing your business faster than the market is a challenge.  Great businesses are capable of achieving above average results compared to their peers in both scenarios.

The one thing that high performing businesses can point to, is how they differentiate themselves.  It is key to their identity.  They know what they do better than their competition.  Typically, companies can differentiate themselves by concentrating on performing as “best of breed” in one of three areas:

  1. Provide better customer service than the competition throughout the entire sales cycle, from pre-sales through post sale customer support
  2. Provide differentiated, higher value products/services than your competition that deliver a clear, measurable benefit to your customers
  3. Provide the lowest priced product/solution with relatively comparable or slightly less capability than your competition

There are two common mistakes that businesses make in this regard:  The first and most common is to not know, i.e. not choose which of the three areas to focus on for differentiation.  For example, providing differentiated customer service requires a significant investment in multiple systems and processes, and the means to measure performance throughout the process.  How you do this as a small company versus larger company may be different, but the fundamental execution is the same.

The second most common mistake businesses make -  especially larger businesses, is to believe that somehow the business can be successful simultaneously in all three area.  The reason it is virtually impossible to do all three superior to your competition is that in many ways they are in conflict with each other.  For example, if I choose to be best at customer service, then my operations costs are necessarily going to be higher than the company with average customer service. But if I want to be the low cost provider compared to my competition, this means I have to have an extremely lean organization across the board, including a lean customer support organization, because my lower prices mean I have to operate on thin gross margins.

Think about your business.  What do you do better?  Can you easily describe which area you focus on that differentiates you to your competition

Here is a test:  Imagine you are meeting someone for the first time at a social event.  The person asks you about your business.  What would you say?  Would you simply tell the person your company’s name and what your company does?  Or would you be able to say, “This is the business we are in, and this is what we do better than virtually anyone else”.  If you can do so, you have a clear identity and focus.

If you can’t describe what you do better, it’s time for some serious contemplation.  And if you do know what you do better, make sure everyone in your business understands your identity.  When requests come to invest time and resources outside your strength, consider whether they help you or defocus you from your strength – what your business does better.

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