By Jack Garson
(On The Edge from The Legal Edge, SmartCEO Magazine)
In today’s world, more so than in decades past, business is not a “build it and they will come” affair. To create and maintain a profitable business, you need a competitive edge. Your competitive advantage can both drive more business your way and critically protect you against copycats. It can also take a variety of forms. The keys are distinguishing your business from others, fending off imitators and then keeping that edge fresh.
What Works for Your Business
Every company is different. So the competitive advantage that works in one might not work at all for another company. Even in the same industry, your edge may vary. One drycleaner might be the cheapest, another might clean your shirt in an hour and a third might be that rare one that doesn’t smash my buttons (wouldn’t that be something!).
The point is that you need to identify what advantage makes your business different and, hence, profitable. Being the low-cost provider might work in one scenario but flop on Rodeo Drive. In fact, under the somewhat counter-intuitive “luxury effect,” higher priced goods attract business from certain customers. These buyers are looking for the prestige, exclusivity and the presumed quality that comes from high priced goods.
In services businesses, attentiveness and responsiveness often capture the gold. In fact, with contemporary dual-earner families, everyone’s time is highly prized. Even those who are unemployed or underemployed want great service, as they value their dollars ever more highly and want the most for their money.
Whatever the business, you need to understand your customer and how you can separate your company from the competition. I work with cosmetic dentists who fill their waiting rooms with patients eager to pay tens of thousands of dollars for movie star-beautiful teeth. I represent a construction company that always builds on time, never defaults and will fix “defects” that aren’t its responsibility to keep the customer happy. I work with a defense contractor that has such a vast array of hardware and software services that the government can one-stop shop with it for virtually every need.
You know your customers. Figure out what will make them open their wallets for services or products like yours.
Protect Your Lead
Once you know what your customer really wants, develop that advantage and guard it. Protecting a competitive edge can take a variety of forms. It might be as simple as a restaurant that not only has good food, but is meticulous about cleaning its bathrooms. What more could we ask for? Likewise, your edge might be as straightforward as training your staff. If your customers want certain things every time they buy from you, it’s critical to educate your team and make sure that every employee delivers your goods the same way every time.
But you can’t just have that edge. You have to protect it.
Jack Garson is the founder of Garson Claxton LLC and leads the firm’s business and real estate practice groups. Jack serves as a legal advisor for numerous local, regional and national companies, focusing on business transactions, commercial real estate, commercial leasing, and construction law. In addition to providing legal counsel, Jack serves as a strategic advisor and negotiator for many clients, providing guidance on issues such as the growth and sale of businesses, liability and risk reduction, the hiring and retention of key personnel, and protecting and enhancing profitability, as well as negotiating the resolution of complex commercial disputes.