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How to Create Competitive Advantage for Small Business Growth

What is Competitive Advantage?

Competitive Advantage occurs when you develop a Unique Value Proposition, the Why we Exist (Our Purpose) combined with the Values, Personality, Cultural and Operational Approach we employ to deliver our Products & Services in a way Customers find uniquely valuable and the obvious choice.

Developing a Unique Value Proposition involves more than just being different.

Creating Competitive Advantage is a discipline, a habit of never ending growth thru the continual improvement of your Unique Value Proposition, that begins with the mindset of the business owner or operator. The cornerstone of the most successful mindset is a purpose founded in the joy of serving others and a fascination with understanding how your team can, thru the delivery of your products and services, impact the lives of people in a positive manner.

4 Key considerations of a Unique Value Proposition that creates Competitive Advantage

People / Product / Process / Promotion

Here are three Case Study examples of what happens when leadership focuses on creating the Competitive Advantage of a Relationship based Culture focused on serving others.

#1  Chick-Fil-A is Quick Serve Restaurant selling Chicken Sandwiches

Are their sandwiches better than say, Zaxby’s, who makes a quite tasty chicken sandwich, or any of 8 other Quick Serve Restaurants that sell Chicken as a primary item?

And why is Chick-Fil-A so successful without selling burgers when most QSR’s who sell burgers also sell Chicken Sandwiches?

How is it that Chick-Fil-A has less menu selection, is open fewer days per week (only 6) and yet they are by far #1 of all the QSR’s?

A Relationship focused Culture is the Competitive Advantage which makes them by far the #1 most profitable per unit fast food chain with average profit per unit at 310k in only 6 days of weekly operations.

When compared to #2 McDonalds Chick-Fil-A makes 25 – 29% more sales and profit per unit per day.

And the operators are completely off on Sundays = more FREE TIME

Source Facts: click: Top 50 QSR Report

#2  Then there is the Story of Southwest Airlines who, while among an industry plagued with Bankruptcies and year over year losses of 2 Billion dollars from legacy carriers like American Airlines and others, have managed to remain profitable each and every year of its 41 years of existence.

So is value price the only differentiator that makes Southwest so Popular?

Or could it be their well-articulated shared purpose that has been fully embraced by the Southwest family?  Watch the Video below to see what you think.

Friendly (Relationship Focused)

Here’s an example of how Southwest creates Fun Memorable Experiences

 

#3  Then there is Delta who recognized it had gotten away from founding principles of Culture and so while coming out of Bankruptcy court in 2007 they embarked on a 4 year turnaround focusing on developing Culture as a Competitive Advantage leading them to being ranked as the 10th most profitable airline in 2014.

 

It was thru aligning Strategy, Leadership and Team Culture that they were able to rebuild a foundation for Success.

See the Ted Talk

Why creating Competitive Advantage leads to faster Growth

Creating a Unique Value Proposition that leads to Competitive Advantage means that your business is benefiting the people in the community in the best possible manner. A goal worthy of pursuit. It also means you are likely becoming highly effective at getting the right people on your team and becoming increasingly effective at transferring your skill sets to the leaders among your team which is an executive level skill known as Transformative Leadership.

Without thinking about Competitive Advantage many small business owners and operators don’t see the benefits of their hard work. Instead, they fall into the mindset trap that the only way to differentiate their business is to get into a coupon war over price, which leads to a slow agonizing profit death and the eventual death of the business. In contrast focusing on the steps necessary to differentiate your business based on performance or customer intimacy can have a positive effect for everyone concerned.

The ability to differentiate your local small business thru Competitive Advantage opens the door for your business to grow while you also have more free time to spend with your family.

How to Create and Maintain Competitive Advantage

The 2 most important questions to creating a Unique Value Proposition are;

  • In priority order what specifically are the needs and wants of my Customer?
  • Are you able to meet those needs in a significantly more effective way than any other local small business competitor?

Understanding the needs and wants of your customers will help you define which Value Disciplines to pursue first. If you are uncertain look for Survey Reports conducted by Trade Associations in your Industry. For a list of Trade Associations visit our Resource: Small Business Trade Associations

Next, as a part of your Marketing Plan consider the four key parts of your Value Proposition, people, product, process, and promotion. Here are a few questions that will help you define the Value Disciplines to pursue;

  • How can we consistently get the right people on the team and help them grow?
  • Do we focus our efforts on delivering a product or service that aligns best with my customer’s needs and wants?
  • How can the processes we use provide the highest level of performance?
  • What is the best way to help the people in our community become aware of our products and services and how it benefits them?

Selecting Value Disciplines for Competitive Advantage

The following Guide will further help you consider your Value Disciplines to build a growth strategy and Competitive Advantage.

Process

  • Cheaper
  • More Convenient
  • More Efficient

Process Leaders

MORE EFFICIENT

“Leaders in Operational Excellence”

Process Leader Factory

Raises the bar of competition thru increasing Efficiency,

Systems / Process / Supply Chains

Sets Standards for:

  • Minimal Cost
  • Minimal Waste
  • Maximum Convenience

Organizationally:

  • Highly Standardized and Centralized Operations with tough penalties to eliminate waste

Process - eliminating waste

Example:  Motel 6

Process - Motel 6

Value Proposition
“Clean comfortable rooms at the lowest price of any chain”

= Quality & Value

Product

  • Better Technology
  • More Features
  • Cooler Style
  • Superior Quality

Product Leaders

BEST PRODUCT

“Distinctive & Superior Product”

 

Pricing not focused on bargain

Service may not be the best but these factors are compensated for by performance or features of product itself

Raises the bar of competition by constantly increasing product Performance,

Sets Standards for:

  • Technology, Style, Features, Speed
  • Imagination, Invention, Innovation
  • Heavy investments in R&D & new Market Exploration

Organizationally:

  • Loose, Flexible, Fluid & quickly adaptable to new product initiatives
  • Rewards rare product success without punishing for the many failed attempts that are necessary to achieve rare success
  • Engineering is #1 even if Cost or Service is Secondary

 

Example:  BMW

 

BM-W is No 1

Value Proposition
“The Ultimate Driving Machine”

Customer Intimacy

  • Better Service
  • We Listen
  • Anticipate Needs & Wants
  • Tailored Solutions

Customer Intimacy Leaders

SERVICE/WHAT THEY WANT

“Outstanding Service”

“Providing the Best Solution Tailored to each customer’s Unique Needs”

Pricing not focused on bargain

Performance may not be the best, nor will product be most distinctive or cutting edge but these factors are compensated for by the Superior Service the Customer Intimacy Leader uses to anticipate, understand and fully meet the needs of each carefully selected customer.

Ultimate Goal: To create a lifelong bond with customer

 

Raises the bar of competition by giving customer all they want

Sets Standards for:

  • Service
  • Convenience
  • Customer Intimacy

Organizationally:

  • An extreme level of delegation and decentralization so decisions are always made by employee who is close to the customer.
  • Requires implementation of information systems that keep track of each customer’s unique needs and preferences

Custom Systems for Competitive Advantage

 

Example:  Ritz Carlton

Value Proposition
“A place where the genuine care and comfort of our guests is our highest mission.  We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm refined yet relaxed ambiance.  The Ritz Carlton Experience enlivens the senses, instills well being and fulfills even the unexpressed wishes and needs of our guests.”

= Quality & Value

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How Online Review Management can grow Small Business Sales by up to 18%

Review Management is one of the most overlooked and yet simplest ways to grow your business Sales by 9% up to 18%.

According to a report by Harvard Business School professor, Michael Luca,  Privately owned restaurant’s sales grew by 5% for each star rating acquired on Yelp.

According to a report by Econsultancy improved reputation accounted for Sales growth of 9-18%. Share on X

Why is a Reputation Management tool necessary?

First, it’s important to understand that manually entering reviews does not give you Google Review credit.  This means Google does not recognize it as a Review but rather sees it as content. Reviews are one of the ranking signals Google looks for when assigning a website’s Ranking value.

Second, the manual process of requesting and hoping customers post a review to Google or one of your Social Sites is not a practical process as the vast majority of customers will forget.

Here’s why is a Review Management Tool considered one of the best low cost and simplest Marketing strategies:

To briefly summarize a good Reputation Management Tool will:

  • automate the process of asking for reviews thereby increasing your success rate by 5 X or more

  • allow you to first gauge Customer Intent so you may be able to Recover if a customer is unhappy before they leave a review online

  • direct customers to review sites that matter to you, including niche industry sites

  • give your website’s Google listing a search engine ranking boost because the tool streams your reviews to your website and social media sites in “rich snippet markup” format

To learn specifics of how Google Search Rankings work and how much a Review Marketing Tool can boost your reputation and sales check out this short informative video.

Review Management_Explainer Video

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Host Beneficiary Marketing-Part II Step-by-Step Guide

Here is a Step-by-Step Guide to develop your Host Beneficiary Marketing campaign:

Host-beneficiary marketing is a great low cost strategy and fairly simple technique that will help you gain new customers.  Before we move into the steps let’s review a few key concepts.

Key Concepts:

Why should I define a target or customer group?

  • Defining a target customer group allows you to narrow your focus and conserves valuable time and resources to be used on potential customers who have the best potential to become a good fit for the products and or services you offer. These well defined targeted customer groups are also sometimes referred to as your ideal customer.

How can I define a target customer group?

  • To define a target customer group use Demographic and Psychographic segmentation.

Demographic Resources

What is the difference between Demographic and Psychographic segmentation?

  • Demographics is a consideration of the quantitative makeup of a population. This helps us determine quantifiable subsets of a population.  Some demographic considerations include; Age, Gender, Education, Geography, Income,  Mobility,  Race and Ethnicity.

  • Also consider the Psychographic Segmentation of your customer which are qualitative lifestyle considerations like values, interests, attitudes and traits. These lifestyle considerations help you understand where to meet your customer by understanding what’s most important to them.  For example if you are in the shoe sales industry and have a line of cross training shoes thru some research you may learn your target customer group is most commonly also concerned about the kind of foods they eat so you would develop a host beneficiary marketing campaigns with host businesses where healthy living products and services are the predominant offering.

Answering these questions are the steps to create your Host Beneficiary Marketing campaign strategy.

To answer question one and two about your target audience consider Demographic and Psychographic Segmentation using your available information and the resources noted above.

  1. Who is your target audience?

  • Be as precise as possible defining your target audience. “Men 35 to 55” might be a start, but it’s likely not good enough. You need to create a detailed profile of your target customer. The more precise you are the easier it will be to find potential hosts and generate quick results.

  1. Where is the best places to meet my customer?

  • Once you have established a clear understanding of your target audience it’s time to consider host business organizations that may be serving the same target audience.

  1. What other businesses are serving this same customer group or segment?

  • When considering these businesses also consider the accessibility of necessary decision makers.  For example large box national brand retailers will be more difficult to connect with key decision makers versus privately owned local business operators.

  1. What can I offer as a value ad consideration “gift” that will benefit my business and the Host business?

  • Develop a clear offer for each prospective partner. Your offer could be a free or deeply discounted product or service that has a high perceived value for the consumer with a low cost for you.  In most cases a $50 discount on a $500 item is not going to cut it.
  • Talk to the host business who will become your partner and convey the value of the relationship. For example you will help them understand that this is a great no expense way to reward their customers and how this will take very little effort.
  • Take action and implement quickly. You can give the host business gift certificates or providing a draft “offer” via email, or a letter that the host can transfer to their letterhead and then share with customers. This will help your host partner to see how easy the process will be as well as help them put the plan into motion quickly.

  1. How will I most effectively develop good relationships with potential customers as well as communicate our business offerings when prospects arrive with the special offer?

  • Develop a strategy to convert first time customers to repeat customers. This, after all, should be your long-term goal. The strategy is to get new customers at little or no upfront cost, and then getting them to come back and patronize you again and again- which should be easy if their first time experience with you was pleasant.

  1. Track your results to assess your ROI and ways you can revise for even better results on your next Host Beneficiary Campaign.

Whatever the specific plan, the host-beneficiary method is the single most effective way to quickly attract sizable amounts of qualified customers to a new business and jumpstart sales.

Host-Beneficiary Marketing

Is Host-Beneficiary Marketing better than coffee? There are a few of us that may think nothing is better than a good cup of joe.  And if you are a Starbucks fan well that’s a whole ‘nother level of jump up and down, can’t live without it, coffee love, right there.  But we will leave that fun for another post.

Today I want to share with you a commonly overlooked low cost technique to grow your business called “Host-Beneficiary Marketing“

If you’re a business owner or leader one of the most overlooked and often highly successful ways to develop new customers in your business is a method that involves forming “host-beneficiary” relationships. To accomplish this you develop a mutually beneficial relationship with businesses that are potentially further along in their business lifecycle stage and serve a demographic or psycographic audience similar to yours. That business is the “host”.

Using a well thought out special offer provided as a gift from the older business, the “host”, you are able to market your business to their base of customers making you the “beneficiary”.

The host business benefits by being able to offer an additional value add consideration to their potential or existing customers without any additional costs, while your business can soon connect with sizable numbers of highly qualified prospects with an indirect and implied endorsement of the established business, the “host” leading to new customers.  In the best cases the host business will also directly endorse you.  This creates a mutually beneficial relationship.

Here is a Host-Beneficiary Marketing example: One “beneficiary” new business owner who just launched an upscale self serve dog wash facility meets with several dog breeding businesses in the area and offers free dog wash gift certificates for customers who purchase certain expensive breeds of large dogs.  The breeders then give away one dog wash gift certificate to any customer who purchase a dog as a thank you gift.

Over the next three months 750 Dog wash gift certificates are given out thru the dog breeders and of those 300 come to have a free dog wash and while there learn about the new business.  75%, or 225 customers, make purchases of ancillary items for sale at an average sale of $18.00.  Additionally 35% of the 300 sign up for monthly memberships at the dog wash yielding 105 new memberships.

The cost of each free self serve dog wash was $1.05 or a total cost of $315 and yields $4,050 in ancillary sales and 105 new monthly memberships x $19 per month x 12 months = $23,940.

While variables will be different in your business situation you can see the major ROI potential of this kind of low cost small business local marketing strategy.

To learn more and gain access to a specific Step-by-Step strategy guide see Host-Beneficiary Marketing Part II at www.growology.com/blog

Growology.com “Local Marketing Made Simple” We love the work of helping small business owners grow.  We build responsive wordpress websites and can manage your local marketing strategy to give you more time to do the things you’re most passionate about.

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3 FREE Tools to help you find Email Addresses

In Local Marketing finding a prospects email address is often one of the most difficult aspects of making a connection or presentation.   Let’s say you just met John Smith at a networking event and you some how misplaced his business card or maybe he was all out of them but you remember the company he works for and would like to connect with John.

In addition to that scenario having the ability to obtain email addresses may help you in any of these areas as well:

  • New Business Development

  • Lead Generation

  • Product or Service Promotion

  • Growing your Network

  • Public Relations

  • Local Marketing, Inbound Marketing, Content Marketing, Direct Response Marketing

So here are a few tools that can help you find email addresses of people you want to connect with and achieve your new business development growth goals.  I have used and found some of these tools quite useful and hope you will also.

3 Free Tools to help you find New Business Prospect Email Addresses Share on X

Email Finding Tools  – all have at least partial Free access. 

www.anymailfinder.com   /  Free  but limited number of daily searches / API Access / Has bulk email finder tool

https://emailhunter.co/  Email Hunter Helps you find email addresses if you know the company url.

www.Findthatlead.com      / Free up to 10 searches per week / Chrome Browser extension that requires you to be logged into Linked.  /  Paid programs have a CSV Import feature.

Find Other Contact Info Including Social Networks

www.Vibeapp.com  / Free / App that can be installed in Chrome Browser, Outlook or on iPhone / Effective across several email platforms.  Hover over an email address and Vibe will give you the ability to see their contact info, email address, social networks etc.

Know of other great FREE tools for finding email addresses?  Let me know.

Cory Pantelakis-growology.comReady to grow your business?  Growology.com is “Local Marketing Made Simple” We love the work of helping small business owners grow.  We build responsive wordpress websites and can manage any degree of your local marketing strategy that is the perfect fit for you.  Ready to have more time to do the things you’re most passionate about?  Call us today and lets launch your next phase of growth.