The secret to strong competitive advantage

We keep hearing about how companies have to be more customer-centric in the digital era.

Theres no question that when customers can spread unhappiness with your company around the globe in minutes, youve got to take their views seriously.

In his new book, Tilt, and Harvard Business Review article When Marketing is Strategy, Dr. Dawar argues that for too long companies have looked to the production side of the business for sources of competitive advantage: how can we make the product cheaper or produce or ship it more quickly, for example.

That source of competitive advantage is gone. Anybody can match you on the production side by linking up with a good offshore manufacturer.

So How Can You Compete?

Instead, we need to focus on delivering more value at the other end: how, where and when we get the product into the hands of consumers.

This fits nicely with the case made by Doug Stephens, in his book, Retail Revival that customers are looking for shopping experiences, not products.

What Does This Mean For Your Business?

The exciting news is that you get to choose what to compete on. As Ive noted before, few retailers can compete with Amazon on price. But you can offer them something else they find valuable enough to pay a premium for it. For example:

  • eLuxe and Frank & Oak compete by providing style advice along with the fashions

  • Canadian Icons competes by providing the history behind the products it sells

  • Canadian Pet Connection competes with extra service touches, like sending a cookie to the human who ordered the pet food.

Take a look at what you offer.

  • What problem is it really solving for the customers?

  • What benefit could it provide that no-one else is currently promoting? (Before Volvo, no one was selling cars based on safety)

  • Can you create a new space to compete in?

Can Todays Companies Make the Shift?

Overhauling existing companies to focus on customer segments instead of on products requires a huge mental mind shift and long-term thinking. For public companies to be able to do it, they have to convince shareholders that investing in customer relationships is as valuable now as investing in a new, faster production machine used to be. Thats a tough sell.

The bad news may be for the new crop of Chief Customer Experience Officers. According to Dr. Dawar, theyll be howling into the wind unless the entire c-suite becomes focused on customers instead of products.

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By: Anna Smith