SUMMARY
Passion, obsession, and a laser-sharp focus on customer needs can all help in the growth and success of a business
Innovation can help companies discover new markets and higher margin products, allowing them to find lucrative opportunities while driving down costs over time
The best companies do not focus on the competition; instead, they concentrate on solving the most pressing problems of their customers
Have you ever noticed a disparity in sales performance between two or more seemingly similar companies? Despite facing the same market conditions and being located in the same city, one appears to be in command and the other appears to be struggling.
So, why do certain companies rule their market while others struggle to keep up?
Should companies that lag obsess over their competitors in order to win, or should they focus on customer feedback to improve their product/service?
Staying One Step Ahead
Two problems often plague businesses obsessing over their competitors.
First, companies obsess over their competitors by comparing feature-to-feature, shifting their focus from innovation to catching up. This obsession with competitors’ products and solutions limits their future roadmap.
The second is competitive myopia, which translates to having a narrow definition of competition. When companies consider direct competitors as competitors, they lose sight of the peripheral vision and fail to spot disruptive companies on the horizon.
For instance, in 1996, Barnes & Noble noticed that Amazon had launched a website to sell books. Barnes & Noble was generating $2 Bn in revenues at the time, while Amazon raked in $16 Mn. Barnes and Noble founder & CEO, Leonard Riggo, who was laser-focused on the competition, stated that the company would soon develop a website to sell books and crush Amazon.
While Amazon initially sold books at a lower price, the online retailer eventually expanded its product catalogue to include toys and furniture, disrupting Barnes and Noble’s business model and eventually eating away at its market share.
Amazon founder, Jeff Bezos famously said, “If you are competitor focused, you have to wait for a competitor to do something. Being customer-focused allows you to be more pioneering.”
This underlining strategy resulted in Amazon’s victory. It also explains why taking a customer-centric approach is the best way to go.
Employing A Customer-Centric Approach
The most valuable companies in the world are those that prioritise the needs of their customers over the strengths of their competitors. Leading companies position themselves to win by taking the time to understand their customers’ needs and effectively thinking about how to meet them. The key to growing a business is to prioritise positive client experiences over concerns about competition.
By being customer-centric, companies can generate higher sales through organic, word-of-mouth marketing. When customers feel unappreciated, they take their business elsewhere. Businesses that employ a customer-centric approach to product development can improve customer loyalty and reduce customer churn, thus increasing customer retention.
When a company is obsessed with perfecting its customer experience, it inspires its employees to create one-of-a-kind products and services based on market feedback, resulting in increased sales. Listening to customer feedback can also help bring relevant offerings to market in the long run.
Innovation can frequently help companies discover new markets and higher-margin products/services, allowing the company to find lucrative opportunities while driving down costs over time. Finally, delivering a great customer experience can result in long-term value creation. Testimonials and word-of-mouth help create a sense of trust among potential customers, thereby improving the company’s long-term outlook.
Focusing On Long-Term Growth
When businesses focus on competitors, they mainly look at defining rivals through metrics such as market share, revenues, and profits. Concentrating on beating the competition may lead to short-term gains, but it comes at the cost of losing the long-term reputation. Furthermore, a company obsessed with beating its competition will find itself in a pickle once the competition is beaten. Businesses that focus on customer success, on the other hand, can grow revenues and profits organically, outgrowing their competition in the long run.
Customer value is optimised when companies excel in delivering service. If the organisation aims to meet the bare minimum standard of satisfaction and sell what the market needs, it stands to minimise its opportunity to expand its top line.
When companies focus on their customers and deliver a superior business model that addresses what the customer values, they can increase revenues over time. Furthermore, a customer-centric approach allows businesses to establish a reputation as forward-thinking, value-driven sellers who distinguish themselves from the competition.
Companies must strike a balance between delighting customers and staying ahead of the competition. Companies can accomplish this by creating a ‘What if’ scenario after gathering all of their competitors’ intelligence. Establishing a strategy by bringing together members from various departments, such as product, sales, and marketing, and putting themselves in the shoes of their competitors, can help businesses assess risk.
The Final Word
Passion, obsession, and a laser-sharp focus on customer needs can all help in the growth and success of a business. It’s critical to understand these nuances so that sales teams have the right tools to help customers with their most pressing issues. The best companies do not focus on the competition; instead, they concentrate on solving the most pressing problems of their customers. By focusing on these priorities, they can be sure that a competitor won’t disrupt them.
