Compelling Customer Advantage – Are you Beating the Same Drum?
Ask a dozen business owners if they can give you their company’s value proposition, their favorite elevator pitch or vision and mission, and you’ll get mixed results. Some can rattle if off by rote with passion and energy, which ripples outward to key stakeholders, employees, customers and more. It’s a sight to see, but we often wonder if that translates to sales. Does the messaging resonate with customers, creating a unique market differentiator that puts them ahead of their competition? Is the messaging consistent across all digital and print materials, in training and onboarding documents, so that everyone is beating from the same drum? I’d like to say yes, but the reality is the messaging is across the board and very rarely consistent.
Not surprisingly, this is one of the key drivers that buyers look for when considering a company for sale, and they’ll pay a premium for companies that have a distinct, compelling market advantage and unique differentiation that separates them from their competition. It’s why we focus on this area during our exit planning engagements, guiding business owners through a series of exercises designed to strengthen this value proposition.
An interesting thing happens when we go through this. An epiphany is reached, and it’s not what you think. Many business owners we work with repeat the same thing: “We’re a commodity, so we have to compete on price to sell our products and services. We can’t go to market based on our value, because our industry does not work that way.” That’s worth repeating…. “Because our industry does not work that way.”
To break this line of thinking, which is critical to advance the discussions and build a defensible, market position for the owners, we share case studies and examples. It’s a time-honored tradition but vital to get everyone into a new frame of mind. Almost everyone has heard of GoDaddy, the domain name internet juggernaut with the great Nascar commercials. There are literally thousands of competitors competing in what is honestly a non-sexy space, but GoDaddy completely sets themselves apart. They’re edgy marketing machine is equaled by their unparalleled customer service and high satisfaction marks. When people do business with GoDaddy, they stay as customers for years. They’ve launched well ahead of their competition and are considered by almost everyone as a valuable commodity they can’t do without. Other examples like this resonate with the owners and get them thinking out-of-the-box.
When you’re thinking about selling your business, it’s vital you look at all aspects of your business to uncover your unique selling proposition. Accounting and finance, manufacturing and logistics, quality and operations, sales and marketing, new product development, training and onboarding, human resources and people management, and more. What makes you, you? And what makes what you do best relevant to your customers?
This exercise goes hand-in-hand with an effort to reach out to our owner’s customer base and key stakeholders to find out from them what they like, do not like, could use more of, and more. These efforts bear fruit and bring to light a wealth of information and insight that you could not get anywhere else. Deep-diving into the data and comparing it your research and market positioning statements will reveal an interesting trend or startling revelation that what your customers want and need is not what you are presenting and communicating to the market or to them.
Let’s look at an example of a client of ours that has absolutely hit this out of the park.
The craft brewery we worked with had double digit growth every year since their inception 7 years ago. They’re unique customer advantage was producing high-quality, consistent beer (think taste and flavor and note that this is not the case for all beer producers) combined with strong attention to detail – orders on time and complete, errors immediately corrected, bottling projections communicated and consistent, and more. While these may not resonate in your industry, they were unique and strong reasons for customers to rave about their beers and distributors scrambling for more. So much so, that they’re net promoter score – a score that measures the growth potential of a company by how much their customers are willing to re-purchase from them and likely to refer the company to their friends and colleagues – was an astounding 90. Considering that the best of the best, your Amazon’s and Marriott’s of the world, score in the mid-50’s, this was amazing indeed.
One final note – when you figure out what your unique competitive advantage is that gives you monopoly control in your market, streamline that messaging and get it out there consistently, every time, in all your communication, everywhere. Keep beating your drum the same way, and when you market your business for sale, you’ll find that buyers are looking for the same thing and will pay a premium, even compete for it, to purchase your business.