You are probably going to have a more effective strategy and a more profitable business if you think of strategy in terms of how you are going to be different from your competitors rather than being better. I know I have repeated this a lot, but that’s because it is not just important! It is uber important!
The difference may be subtle. For example, you may emphasize and focus more on one aspect of your business than your competitors do. For example, Home Depot focuses more on serving the supply needs of professional contractors than does key competitor Lowe’s.
The key to ask, though, is, “Does my strategy really make me appear substantively different from my competitors in a way that is significantly valuable to my customers?”
“To Be the Best”
Utilizing a “best” or “highest quality” approach as a strategy is, generally, not the best marketing tactic. Think about it. What does this tactic say to a potential customer? Nothing. Everyone says their products or services are the best. Instead, develop a strategy that instantly sets you apart from the competition.
In a service business, particularly in a situation where you are personally providing service, competing on price is a very common strategy. Until you have established your business, price competitiveness is often necessary to break in, but it should be only one component of your strategy. It would be ideal to have a strategy so powerfully differentiated that you wouldn’t have to compete on price at all, but that may not be a realistic objective initially.
However, in a product business, especially one in which you are competing with larger firms, you usually shouldn’t base your strategy on price competition. No matter how hard you try, you probably won’t be able to achieve the cost efficiencies of a larger firm that are necessary to compete on price alone.
Is It Working?
Do a survey of your customers and ask them if they can express, in one sentence, what makes your business different from the competition. If they can’t, your strategy isn’t working. Don’t be surprised if you find that your business is viewed in a different light than you intended. In this case, take a look at how you are transmitting your strategy “message” to your customers. Don’t hesitate to make adjustments in advertising, customer service, sales pitch, or other “message” channels to effectively communicate your strategy.
Chances are that, after being in business for a year or two, you may determine that it is necessary to modify your strategy to a greater or lesser degree. Fine. But avoid adopting a completely different approach. All of the goodwill and name recognition you have worked to achieve will be wasted.
Shout It Every Day!
Don’t keep your strategy a secret! Any competitor on the ball will see exactly what you are trying to do—whether you try to keep it a secret or not. Be absolutely sure that all of your employees know what the strategy is, and that through their work they communicate that message.
Don’t forget to reinforce your strategy—your competitive edge—in the minds of your customers on a continuous basis as well. However, as you will see in my marketing presentations, you will often present your message to your customers and in your advertising in a way that is somewhat distinct than how you might describe or summarize your strategy in your marketing plan. For example, a simple way to describe my strategy for my Bob’s Rent-A-Bike would be “older used bicycles delivered to your location by Bob using his mother’s station wagon.”
That’s probably not going to win any prizes for advertising copy! Instead, the advertising slogan was closer to “Bike rentals delivered free to your location!” plus fine print noting that to qualify you need to rent at least two bikes for two days.