We tend to think that our competitive advantages are based on our products’ performance, or our low costs of production.
Sure, these are important, but they are not your biggest sources of competitive advantage.
Your biggest source of competitive advantage: Knowledge of your customers.
Consider what happens if you know more about your customer than your competitor knows:
- You will know what your customer cares about in ways that your competitor can’t know.
- You will be able to customise your product or service delivery for your customer in ways that your competitor can’t.
- You will be able to personalise your communication with this customer in a way your competitor can’t.
- You will be able to address any problems or disappointments your customer has in ways that your competitor can’t.
Additionally, if you not only know your customer really well, but ensure your customer recognises that you know them really well, your customer will appreciate you more than the competition. This is due to my differentiation paradox: Customers often think we are different not because we are different, but because we recognise what makes them different.
Now, ask yourself: Is customer knowledge a proficiency and a priority in our company? Do we know a lot about our customers? Do we have good mechanisms for gathering customer knowledge?
If your answers to these questions are “no,” you are missing potential competitive advantage. Here’s what you should do:
- Create a “culture of customer curiosity” in your company. Imagine if everyone in your company had a burning, natural interest in knowing as much about customers as possible.
- Talk to them! Sure you can do surveys, but if you really want to know what customers care about you need to engage in deep, probing conversations with them.
- Watch them! You can learn a lot by observing customers’ behaviour. When do they buy from you? How often? What do they buy? What do they return, and when? When do they contact you? What do they say to you?
Steve Yastrow: Author, speaker, consultant and founder of Yastrow & Company, a Chicago-based consulting firm.
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