As accountants and business advisors, we regularly get asked to review business plans and cash flow forecasts. One of the key areas that quite often seems to be a stumbling block is the business's key point of difference.
If you have a business product or service that cannot articulately describe its point of difference to the competition, the default position will usually come down to price. After all, why should a customer or client pay more whe they can get exactly the same from any one of your competitors?
Here are some tips on what you need to do to work out your point of difference.
Figure 1: The country town of Nyngan has decided that (some say controversially) the Big Bogan will attract more tourists.
1. research your competition
How do you keep up to date what your competitors are doing or offering? When was the last time you reviewed their offers and prices?
If you aren't doing this simple exercise, you may be missing out on sales conversions without realising why.
2. compare what they offer in terms of price and other add-ons
Once you have listed down what your competitors are doing, set up a table and compare your product or service to what they are doing. Are you just offering the same thing and if so are you dearer, cheaper or the same price?
If you are dearer, can you justify the value to the potential customer?
3. brainstorm with your team
Sit down with your accountants or business advisors and team and work out how you can sell your product or service differently to your competitors. For example, a pub may offer a courtesy bus for free to take patrons home within the area every hour so they can enjoy a drink without the worry of drink driving.
Can you offer things like:
- After sales service if there is a problem;
- SMS texts when servicing is due;
- Free maintenance and servicing for say the first 2 years (car dealers sometimes offer this);
- Greater warranty terms;
- Money back guarantee;
- Loyalty rewards;
Figure 2: Those that don't work out their point of difference should be shot!
4. Develop a sales script so the message is clear
Once you know what your competitors are doing and what you can offer that is different, make sure you build this into your sales scripts for your selling team. Do role plays and ensure they can clearly get this message across so the customer can compare apples with apples.
5. review quotation templates
Do your quotes actually make it easy for customers to compare to other quotes they have received from competitors so you have a greater chance that they will see the extra things they will receive with your product or service? Or is it just a brief description of price and the product?
6. update marketing materialNaturally you should promote why you are different in your quotes, website and brochures and any other marketing material. See if the local media will run a story on what you do that is different and innovative. This will give you not only free marketing but create credibility within the market place.
When you work through your business planning process, make sure you consider on what you do differently compared to the competition. If you are selling exactly the same thing, it will become a price war and those with the deeper pockets such as public companies can play this game until you go out of business. A point of difference will typically see a higher business valuation price also.
Do your research, be creative and don't be shy in telling the marketplace and not only survive but thrive!