3 Ways to Differentiate Your Business in a Competitive Market
These days, it’s increasingly difficult for an entrepreneur’s business to stand out. Extreme competition has led to consumers having high expectations. Oftentimes, simply offering above-average quality products won’t cut it. Business owners need to reject the dangerous idea that differentiation is about what their company does uniquely in terms of process, packaging, delivery, marketing, etc. It’s all about what the customer gets out of a product, whether by way of greater utility, better features, lower cost or other impactful benefits.
As management guru Peter Drucker famously stated, “A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes quality.”
Competitive advantage, as Jeff Bezos likes to say, is about customer obsessiveness -- providing uses and advantages that make consumers happy and inspire them to re-order from the business again and again. Here are three credos businesses should keep in mind when seeking a competitive edge over rivals.
1. The importance of quality can't be understated.
As Drucker says, quality should be looked upon from the customer’s perspective, not the supplier’s. More specifically, it should meet or exceed the buyer’s expectations when it comes to reliability and durability, safety and security, efficiency, user experience and customer service.
High quality also leads to potentially millions of dollars in free publicity. A recent example is Tesla’s Cybertruck. Its 2019 unveiling generated extreme worldwide buzz and rave reviews from auto experts. Elon Musk’s company subsequently received a quarter of a million pre-orders in less than a week. And while most companies can’t match Musk’s bold vision and designs, let alone resources, Tesla can serve as an inspiration to entrepreneurs who strive for superior quality and long-term, loyal customers.
Another example is Tael, whose anti-counterfeiting tech allows consumers to verify product authenticity with their mobile phone. The company even built a whole ecosystem of quality around its users, who are rewarded with tokens that can be used for high-quality goods and carefully selected services.
2. Consumers expect speed; it's your job to deliver.
Speed doesn't mean what it used to. People aren’t easily impressed when Apple, Google and Amazon are spoiling them with superb devices and services delivered virtually in real time. Speed now means instant transactions, immediate customer service and one-day shipping or same-day, door-to-door delivery.
In the blockchain industry, speed is essential for mass adoption. Transactions can be slow and, depending on the network, can take over an hour to settle. That kind of cycle time is unimpressive for a payment system. Speed is also essential in the food sector. Multiple studies show that diners get exponentially angry if they wait more than 20 minutes for food.
Speed and quality are reasons why Instant Pot is the No. 1 selling product on Amazon. In the late 2000s, founder Robert Wang bet his savings that a multi-purpose pot that cooks fast would be well-received by busy moms and professionals. As for his continuing success, Wang invokes Drucker's principle, reading all negative reviews and improving the manufacturing process based on negative customer feedback.
3. Privacy is a growing concern for buyers everywhere.
Revelations of Google and Facebook's data-mining practices are making people concerned about the use of personal information. Legislation that would classify personal data as private property has stalled in Congress, but technologists won’t and shouldn't wait for Washington, as companies can earn consumer trust by implementing user-friendly privacy policies and innovations.
Take ARPA, a blockchain venture that enables organizations to collaborate and share computational data without compromising privacy or data security. The firm uses privacy-smart contracts and enables participants to communicate via a trustless network, protecting sensitive info from hackers with a propietary method that includes message-authentication codes and secret-sharing.
Without recurring sales, a business slowly dies, and happy customers are what drives recurring sales. That's why it's crucial to keep in mind that quality, speed and privacy can give any businesses an edge in today’s competitive marketplace.