I was out mowing the lawn yesterday evening when I got into a discussion with my neighbor. He’s a sales manager for an audio sound distribution company who supply high end home audio equipment to retail stores and dealers nationwide. He manages western Canada. It was interesting to hear his frustration with lesser known dealers going up against more established stores like Sound Plus, who believe they can only compete through lower prices or product exclusivity. Everyone knows the price game is a never a good one, unless you are setup to be the lowest-cost provider like a Wal-Mart and have the operational efficiencies and buying power to support that model. And no one is going to give you exclusivity unless you can commit to a minimum buy that greatly exceeds the distributor’s opportunity cost of closing off his channels. For most small businesses, this isn’t even an option.
What is an option is to ask oneself, “What unique customer experience do I deliver that people still want to buy from me even when my prices are on par or higher than my competitors?” Once you get past the answers of “better customer service” and “better quality”, both of which everyone lays claim too, ask the question again. It’s a tough one to answer, but its worth asking because it’s the key to what makes a business different and compelling. After working it out, reinforce it in your message, culture and behavior every single time, at every customer point of contact.
I have a friend who took over a toner cartridge re-manufacturing business. The industry in general, looks the same, speaks the same, and sounds the same. It probably tastes the same, but I wouldn’t know. We set out to break through the clutter and have the company stand for something that would reverberate through his company. We changed the name of the company from “Digitech Laser Systems” to “Digitech, Renewable Printer Cartridges“. Along with a host of brand promises (fast delivery, live support, no contracts), the company stands for environmental responsibility. Customers learn that every time they use a renewable cartridge, they protect landfills of harmful plastics and conserve oil. They receive their cartridges via Digitech’s fleet of Toyota Prius hybrids. And they get an office plant when they become a customer, not to mention an overall friendly, high touch service attitude. The best part, the customer doesn’t pay more for these services and there is no sacrifice in quality. The value Digitech delivers is higher than the prices they charge, and puts them in a perfect position to become preferred in their industry.
Digitech is going one step further and looking into making their manufacturing plant energy efficient and green, as well as launching a blog to discuss easy environmental tips. What’s cool is that the behavior is being driven by the employees, which makes their brand promise authentic and powerful.