Six imperatives for competing effectively
Competing effectively in today’s market and in most industries requires a strategic approach to assessing and addressing the competitive landscape. While feature matching and differentiators may work for certain products — think printers or even many cameras — most products today require a more nuanced approach to positioning in the competitive landscape. Here are approaches businesses can take to compete more effectively:• Understand the market pains: When working with clients, many answer the question, “How would your clients and prospects articulate their pains?” with answers that reflect internal thinking and words they would ascribe to the market, not actual words they have heard. Very few can speak in the client’s lexicon, reflecting a disconnect with what their markets are actually experiencing. Often even when they do understand the pain, they do not understand the severity of the different pains. This spectrum of pain is essential to know so that product, marketing and sales efforts emphasize solutions to the pains that are most acute and most likely to affect purchasing decisions and behavioral change.• Know how prospects solve their pains in the absence of what you offer: Understanding prospects also means understanding how they currently solve their pains — with a competitor’s solution, operational changes, perhaps just inertia. Also important to note is how well the alternatives are working. If the solutions are working now, what are the key drivers that might impact change? Are there regulatory forces that might come into play — perhaps the prospects’ competitive landscape is also changing and a larger player is entering the arena requiring prospects to hone their competitive edge.• Demonstrate dominant competitive advantage: Having strengths is important, but strengths alone may not be enough to have your solution stand out from the crowd. Ken Edmundson at Northstar Institute defines a dominant competitive advantage as one competitors cannot duplicate, do not know about, or are not as good at doing. As an example, one recent client has patents that give it a dominant competitive advantage in the data center cooling market. Traditional solution providers cannot match this client’s solution, even though they may have individual strengths. These strengths are easily replicated by other players and are not compelling enough on their own. A dominant competitive advantage makes a buyer decision much more compelling.• Define the weakness in your competitors’ dominant competitive advantage: Even though your competitor may demonstrate a dominant competitive advantage, what is the weakness in that advantage? As an example, a company with intellectual property may have compelling solutions from an engineering perspective. The weakness that you might exploit could be that the company is engineering-driven. While that might be good from a product design perspective, it could also be a weakness because the competitor is not set up to handle customer service calls or maintenance issues — a weakness in their advantage.• Sell value, not features: Understanding market pains allows businesses to sell on value and impact — how does the solution save the prospect time or money, or make them money? A feature sale can frequently get bogged down in a sales cycle where the customer is trying to compare on a feature-by-feature basis, and takes a conversation into areas not meaningful to either party. In fact, the more a business can sell the value of the solution relative to the most severe pain, the less price-focused the sales dialogue will be. Worth noting is that great sales people will almost always go to solving the pains. Collateral that supports the solution approach will streamline the sales process.• Embed within your clients’ value chain: Demonstrating how a solution fits within the value chain of what a client delivers to its end clients is an exceptionally effective way to compete. This approach requires an understanding of the macro forces at play within the market realm. What are the political, economic, social and technological forces that impact customers’ customers and prospects? The more a business can demonstrate true value over time, the more embedded it can be — and the higher the switching costs to a competitor.Toral D. Cowieson, founder of SISUTEK, a market due-diligence and product strategy firm based on the Seacoast, can be reached at 603-828-1633 firstname.lastname@example.org.