Why Choose You?
Why Choose You is a common question buyers ask of sales people. The reality is there needs to be several reasons for Why Choose You and we call these Competitive Advantages. Few would disagree that 2, 3, 4, or 5 compelling Competitive Advantages are core to every business and the stronger and more compelling these advantages, the easier sales become, at least with the right Demand Generation strategies. Many companies have come up with brilliant ideas and successfully taken them to market, and with the first mover advantage have built dominant positions in the market. Unfortunately like most things in Sales, they are neither simple nor easy and what can happen is your Competitive Advantages struggle to stand the test of time, changes in the market and often a full blooded assault from your competition.
Competitive Advantage Degradation
One of the key elements of successful Competitive Advantages is the Position or Niche you find in the market. Poor positioning can leave you entering competitive markets which then forces you to compete for business on Quality, Service and Price. (We don’t believe any of these are good differentiators). The flip side is when you find a niche that no one else is fulfilling and you have no competition, price then is not an issue and with first mover advantage you can dominate, sometimes for years. Often however, your competitors are not going to roll over and allow you free reign in the market. The minute others see your business as a success, others will investigate and where they deem appropriate they will follow the money and come after you. As we’ve discussed the benefit of first mover advantage is great, however it is not Kryptonite and will not defend your Competitive Advantages for ever, as the followers in the market look to equal or better your Competitive Advantages. Unfortunately as soon as the Value Proposition is equal to your competitors, and often this is perception in the Buyers mind rather than reality, a price war can erupt. We call this Competitive Advantage Degradation.
Ultimately all our Competitive Advantages are tested in the market and either fail, stumble or succeed. Those that fail and there are many, are better off than those that stumble. Typically the stumblers, stumble along for years and survive via several rounds of external investment, some niche sales and by founders who take little or no pay in the hope things will turnaround. For those that do succeed, again Sales is never simple and easy as often times when companies have just managed to build profitable, sustainable growth, the market changes, consumer trends move and they are back to square one.
A Case in Point – The Body Shop
The Body Shop was founded in 1976 by Anita Roddick and sold naturally scented soaps, oils and lotions achieving 50% growth annually. Listed on the London Stock Exchange in 1984 the Body Shop became known as “the share that defies gravity”, as they increased by more than 500%.
The Body Shop successfully took the position of using only natural scents, no animal testing and campaigning for the environment, all with brilliant branding. They are some who would say, the first ethical brand.
Surrounded by giants like Boots, Loreal, Estee Lauder, Clinique, Olay and Coty they truly had a Unique Value Proposition and thus reaped the benefits. Unfortunately however, The Body Shops competition recognised the Competitive Advantages and set about negating every one.
Companies like L’Occitane, Yves Rocher, Lush and Waleda all flocked to the high street with similar Competitive Advantages and gradually ate away at The Body Shops market share. No longer was The Body Shop the answer to Why Choose You. The perfect storm came when the market became flooded with local entrepreneurs with home made soaps, oils, lotions, candles and The Body Shops customer base was being attacked from every angle. The results speak for themselves with annual sales down over 40 million euros and the chain now up for sale by parent company Loreal who had purchased them at their peak in 2006.
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