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Your business decisions must support your competitive advantage. When faced with a formidable competitor, many firms will unwittingly undermine their competitive advantage by either mimicking the competition or making decisions that don’t support their advantage. A recent example from the political arena is John McCain’s choice of running mate in Sarah Palin. McCain seemingly abandoned his advantage over Obama in experience with his choice of Palin. Mirroring Obama’s strengths with Palin’s vitality and public speaking abilities eroded his own competitive advantage of experience. As you define your strategies for addressing the current economic situation, evaluate the impact they will have on your competitive advantages both now and in the future. Here are some words of wisdom from the author of one of my favorite books:
All this negativity is beginning to paralyze people. People are just afraid to do anything. It’s like we’re all waiting for the other shoe to drop on this crazy economy. Here are 5 things you can do today to change the mood, improve the attitudes of the people you come in contact with and start to see opportunities instead of negativity. - Start coming to work 30 minutes before everybody else and read one chapter of a good business book. Suggested Reading: Blue Ocean Strategy, Rebel Rules, From Good to Great, Groundswell, The 7 Habits of Highly Effective People. Start your day off with possibilities not barriers. Challenge yourself to find at least one useable idea per day. Write that idea down.
- When you pass fellow employees in the hall, instead of the cursory nod ask: Hey, let me tell you what I just read. Tell them what you learned, ask them what they think and listen.
- End your day with 30 minutes of calling customers you haven’t talked to in the last 60 days and asking what your company can do to help them thrive in this economy? They’ve had a hard day of people asking them to do things. You will end their day with an offer to help them.
- Say please and thank you to everyone for everything.
- Instead of walking around with your head down, look up and notice things. Challenge yourself to think of something nice to say to everyone you pass by. “Mary, you look great today.” “ Sam, I loved your email yesterday.” “Karen, great work on the Smith project.” “Herb, there’s that smile that always brightens my day.” When you really get good at this you can start saying nice things to people you don’t even know. “Wow, I love those shoes. They’re great.” “You look like you are out to conquer the world today. I hope you do.” Etc.
You’ll be amazed how good you will feel and how contagious that feeling is.
It’s tough out there right now and a lot of business leaders are struggling with the challenges brought on by our sluggish economy. But here’s the question: Will you have a better shot at figuring out what to do if you continue to learn or if you crawl in a hole and wait it out? Now is not the time to stop spending money on learning. It’s the learning that allows you to figure out what to do when times get tough. So don’t stop going to conferences, don’t cancel your subscriptions and don’t stop interacting with your peers. That’s the stuff that makes us smarter. But if you still think reducing your “get smarter” expenses is going to save you from ruin, here’s another question. What are the chances that a business leader you compete with is learning something right now that can help his company beat you? Kate Dunn President Digital Innovations Group
I facilitate a peer group of business owners and the topic of competitive advantage comes up a lot. We have been talking about this for years but when the economy was chugging along, the owners would acknowledge it was important but rebuff any attempts on my part to get them to actually define or develop some. Not surprisingly, many of these same owners are now discussing ways to cut costs so they can maintain profitability while the economy flounders. I can’t help but wonder what would have happened had they developed some sustainable competitive advantages while the economy was hot. Would they have been even more profitable? Would they have narrowed their focus and developed some real expertise in a few markets that would be especially valuable to businesses in those markets today? Would they have streamlined or invested in their operations strategically so they could maintain their competitive advantage and offer a service that provided a high ROI for customers who are scrutinizing every decision in a struggling economy?
What do you think?
I just read a book called What Sticks and in the book the author relays this story. The media director for a major Detroit agency was working on the account of one of the big three automakers. This media director was surprised to learn that the level of TV spending was based on what their competitor spent across town. No complicated study of effectiveness, no analytic model – just a “me too” approach. The current economic climate just cries out for a better approach to advertising and marketing. There are now cost effective ways to track response define ROI. Attach unique urls to billboards, to print ads, to radio commercials and see how much interest they generate. Use purls to track response from direct mail and email. Give it enough time to work and if it isn’t move on. Try something else. This same book recommended a breakdown of your marketing spend this way: 70% goes to tactics already proven to work. 20% goes to tweaking those tactics to improve response and 10% goes to totally off the wall things. What’s totally off the wall – well the person who thought of putting Snapple in Jerry Seinfeld’s refrigerator – would qualify. (That’s the first overt product placement that I remember seeing). Or the person who realized one billion people a day would go to Office Max to “Elf Themselves.” What’s the next way out thing?
If Buick’s goal was to increase awareness, decrease the average age of its buyers and increase sales outside the US, they would have been successful with their $7M spend for Tiger. The actual ROI would be complicated and have to look at the profit on the cars they sold and the propensity to buy again Buick owners display since the lowering of the average age extends the potential lifetime value of the buyer compared with not only the Tiger spend but all of their other advertising spend. The other thing they would have to look at is what their trends were before the Tiger endorsement. If sales had been dropping at a faster rate than they actually did with Tiger, that would indicate that Tiger potentially had helped to minimize the losses. However, the important thing to note here is that if the objective was to increase US sales the Tiger sponsorship did not work. On another note though, you can see that GM is cutting back on their overall advertising spend. If the authors of What Sticks are correct this will only impact about 15% of their short term sales which they will undoubtedly blame on the economy but the question if GM survives is what does the loss of Tiger do for long term brand awareness and sales? Do you lose the Chinese market, does your average age stop going down and start going up again which would be a huge problem as boomers get past their car buying prime. Maybe this is rocket science  Happy Thanksgiving!
– and Rackham’s overall advice is to go after half the number of customers and shower them with twice the attention. Take five minutes and watch his insightful interview on Gazelles.tv (right hand column) - and then watch it again with your sales team (these interviews were conducted at the Sales and Marketing Summit a few weeks ago). BTW, Rackham shares an interesting stat — the top 10% of a sales force typically outperforms the bottom 10% by a 3:1 margin! This is where opportunity exists.
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