Commodity businesses like industrial manufacturing tool sales are more competitive than ever. To differentiate your business and remain profitable, you must compete in many other ways than just on price.
By developing your competitive advantage and by making sure you communicate it with your inside and outside sales teams and throughout your entire organization and sales process, you set your business apart.
Here are some tips on how to do just that, gleaned from an interview that Jaynie Smith, “the Competitive Advantage Expert,” gave with Future Thinkers. Jaynie Smith is the author of Creating Competitive Advantage, and has spent years developing a process that teaches companies what constitutes a competitive advantage in today’s environment—and how to achieve one in business.
Competitive Advantage Defined
According to Smith, around 85% of products and services available today are commodities. When you get away from this commodity corner and commodity pricing and set yourself apart, that’s when you gain a competitive advantage.
Competitive advantage is the answer to a simple question: “Why should I do business with you and not your competition?” Your competitive advantage is the benefit you have over your competitors by being different in a way that they can’t copy.
The two key things to remember about competitive advantage are that it must be unique, and it must convey value. In other words, a competitor can’t also claim the same advantage, and the advantage you offer must be something that your customers care about.
Most companies get competitive advantage wrong. Ask them to list their competitive advantage and they say something generic like:
- We are a family-owned business
- We have been in operation for three decades
- We sell a wide range of quality products
- We offer excellent service
As you can see, none of these claims are unique and none of them communicate value. Quality, service, and experience are table stakes. To claim a competitive advantage, your claim must be unique and something relevant to your buyers.
According to Smith, most companies are mistaken about their competitive advantage. These companies:
- Don’t have a competitive advantage—but think they do
- Have a competitive advantage but don’t know what it is – so they lower prices instead
- Know what their competitive advantage is but neglect to tell clients about it
- Mistake strengths for competitive advantages
- Don’t concentrate on competitive advantages when making strategic and operational decisions
How to Discover Your Competitive Advantage
Here’s an exercise you can conduct to discover why your customers should do business with you instead of a competitor.
Step 1: Name Their Pain. Draw up a list of the pain points and challenges that your customers face and that you solve with your products and services. If you are in doubt, ask your customers and prospects to name their pain.
Step 2: Search for Your “Only.” Draw up a list of statements that all begin with the phrase, “We are the only company that . . .” Remember to only include claims that buyers care about.
Step 3: Look for Convergence. Look at your list of customer pains and your list of “only” claims and look for convergence. Look for places where you are the only company that offers something that solves a buyer’s challenge.
Step 4: Look for Proof. Your competitive advantage can’t be a promise. It must be provable. For example, you can’t simply state that you ship all orders within 24 hours, hoping to persuade skeptical buyers that this sets you apart. You’ll need empirical, quantifiable evidence to back up your claims. A 98.6% track record of delivering orders within 24 hours is much more persuasive.
Communicate Your Competitive Advantage
A competitive advantage that’s not communicated is no advantage at all. Your competitive advantage works in the marketplace only when you communicate it consistently.
This is where your marketing team comes in. Work with them to analyze customer pain points and how to best communicate your competitive advantage. Then, align with them to make sure this advantage is communicated consistently across all channels and by all people.
In other words, a buyer visiting your website should read your competitive advantage worded in the same way as it is worded on your LinkedIn company page, your Twitter account and in your advertising.
Another place it needs to be integrated? Your selling process.
Integrate Your Competitive Advantage into Your Selling Process
Two quick and lasting ways to increase your sales are to discover your competitive advantage and to document your sales process. When you discover the unique value that only your company offers, and when you ensure that your sales team communicates that value by following a documented selling process, good things happen.
The first place to use your competitive advantage is with your prospecting. Make sure all your sales reps understand and can articulate your competitive advantage. Document it. Then measure performance to ensure that reps are describing your competitive advantage during prospecting calls, in cold emails, in LinkedIn outreach and during discovery calls.
The next place to integrate your competitive advantage into your sales process is in written proposals. Find out what sets you apart, then state that clearly and confidently in your proposals so that prospects see a valid reason for adding your firm to their shortlist of candidates.
Finally, set your sales team up for success by integrating your competitive advantage into all of your sales presentations and sales collateral. Ensure that your team tells prospects at every stage of your pipeline:
- How you are different from your competitors
- The value you offer that none of your competitors offer
- Why you are the better choice
A Selling Process that Stands Out
One of the primary reasons to create and communicate your competitive advantage is that it increases sales. When you stand out in a crowded marketplace with a unique claim that buyers care about, and that no competitor can claim, a larger percentage of prospects will choose you over competing firms.
From your buyers’ point of view, though, your competitive advantage reduces their risk. It increases buyer confidence, giving them a factual, proven reason for choosing you.
If you are a manufacturer of industrial tools, and if you’d like to communicate your competitive advantage to the marketplace, consider Durrie Sales. We are an industrial manufacturers’ representative agency that helps you grow your pipeline and increase your revenue without having to hire, train, and manage an in-house sales force.