Business isn’t as complex as we often make it. Big companies pay millions to external consultants, MBA students spend two years studying every part of business, big companies generate hundred page annual plans, and countless books are written each year on what you actually need to do to make more money in business.
Well, I earned my MBA, I’ve written an annual plan for a billion dollar brand, and I’ve been a consultant. During my career in big business, what I’ve really learned is that much of business can be simplified into one short statement:
Be different from competition in a way customers value.
This applies to any business that exists to make money. Whether you’re a huge brand, an early-stage start-up, a product maker, or a service provider this applies to you. With all the work it takes to run a business, it’s easy to forget that this is the simple foundation of why your business exists. This is how successful businesses get big and stay big. They continually refine their understanding of what their customers value, and deliver it in a way that stands out from competition.
Positioning your business distinctly from your competitors may seem obvious, but it’s amazing how many companies, even large ones, fail to do it.
It’s useful to think about it this way: Customers today don’t buy products, they choose between options. Our lives are packed with options for spending money, and many products seem the same. It’s more important than ever to create a unique space in the mind of a customer. If you try to take a space that’s already filled by another company, it’s very hard to get attention; but if you create a new space that makes the customer’s life better, you’re in.
In 1959 Volkswagen launched an ad called “Think Small.” This is a great example of doing it right. At a time when Americans were obsessed with big muscle cars, the ad showed that the Beetle was different, and how that was valuable to customers. The ad pointed out that the car uses five pints of oil instead of five quarts, it can drive 40,000 miles on a set of tires, it doesn’t need antifreeze, that your insurance will cost less, and that you can actually fit into a parking space. While the ad hit on rational reasons that were valuable to customers, the shape of the car and the personality of the ads hit hard on the emotional reasons why a customer would want the car. It was a powerful one-two punch.
Once is not enough.
Small companies get big, and big companies stay afloat by continually adjusting how they provide value to customers. Not changing with the changing needs of customers can bankrupt large companies just as well as small ones.
For decades, Kodak stood for “Film I trust.” They built a strong brand around ideas like quality, family, and memories. However, they were slow to innovate as digital cameras were introduced. What customers value changed quickly, and competition leapfrogged Kodak by providing a product that met customer’s new needs. Between 2000 and 2010 Kodak’s stock dropped by over 90%.
You can do it for free.
Not only is being different in a way customers value the foundation of any business, you can create the foundation for free. This is thinking part of being in business. There is a lot to do in any business, but the time you spend thinking and understanding is what sets you up for long-term success. Survey the landscape of your business. Who are your competitors? What do customers think about them? What do they think about you? Whose offering makes the customer’s life better? How you’re different in a way that customers value makes all the difference.
Now you’re ready for marketing.
Once you’ve figured out how you’re providing value different from competition, you’re ready to do marketing. What you say in your marketing messages will be simple if you’ve done the work to position yourself upfront. Spending marketing dollars is like cutting a board. You should measure twice, and cut once. Once you cut, its cut, and once you spend your dollars, they’re gone. Best to be sure your message matters before spending the money.