Warren Buffet was asked, “What is the single most important thing you look for when you invest in a business?” He replied, without hesitation, “Competitive advantage.” His practice was never to invest in a business that did not have a competitive advantage and a strong management team. Likewise, Jack Welch said, “if you don’t have a competitive advantage, don’t compete.” This focus provided tremendous results for these two men and their companies.
Yet as I travel around speaking, both nationally and internationally, to leaders of all size companies, I always ask, “How often do you review/consider/evaluate your company’s competitive advantage?” Remarkably, the two most common answers are, “never” and “once a year.” The “once a year” is during planning sessions and they admit they give it scant attention even then.
Because of this gap, businesses are leaving money on the table every day. My company spent the last ten years doing research for organizations of all sizes, from small startups to Fortune 100 companies. We tested, via double-blind research, what their own customers valued in their buying decision. We then compared the company’s view of what mattered most to what their very own customers and prospects told us.
The findings are both startling and, I might add, a bit frightening:
This gap is why I can state unequivocally that most businesses are leaving money on the table.
The common buzz word of the last decade has been “disruption.” Uber, Amazon, various apps and technologies, have disrupted the world as we once knew it. Warning: it is time for businesses to get focused on and embrace the disruption in how they sell a value proposition. Your value proposition is not an internally made up declaration, such as, “We are customer focused and treat our clients with respect and honesty.” It needs to be much more than a cliché in today’s environment.
If you are not yet focused on metrics that have everything to do with what the customer values, you may be painting yourself into commodity corner. This allows price to be more important in the sales encounter than it should be. You must be able to build confidence and remove risk in the sales encounter by demonstrating your past performance in the most critical customer areas. For example, if they value order accuracy, do you measure it? Do you provide the stats to your salespeople, so they can tout your success in that area? Do you update it monthly because you are, in fact, holding people accountable for delivering what customers value? Have you been able articulate the value you bring to your customers that may save them time and money? Is it consistently delivered?
Your ability to answer, “why us” with objective, quantifiable, unique differentiators that demonstrate your past performance in key operational areas is the first step to building your value proposition. We live in different times.
Jack Welch also said, “When the rate of change outside an organization is greater than the rate of change inside, the end is near." Our attention spans are not what they once were either. We must adapt our messaging to solid, meaningful deliverables to close more sales and protect margins. Businesses can either embrace this disruption or look forward to being disrupted.
Jaynie L. Smith is the CEO of Smart Advantage, Inc., a sales, marketing and management consultancy whose clients range from mid-sized to Fortune 100 companies. She consults globally to help companies increase measurable results to the top and bottom lines by defining their competitive advantages. Jaynie is a best-selling author and an international keynote speaker.