Whether you’re starting or promoting a business, there are typically three fronts on which you can compete – service, quality, and price.  These are the three main cornerstones of competition for busineses, and the basis that we as consumers base our decisions upon.  While it’s possible that you can differentiate your services or products base on two out of the three attributes… you can’t compete on all three.  The reason you can’t compete on all fronts is because when combined, these characteristics are contradictory of each other.  Trying to focus on all three will leave gaps and weak spots and a business model that can’t be sustained.

Image Credit: Y

Quality

Differentiating your products or services based on quality is a great model to build a business around. When you produce quality products, you are able to charge more to your customers because they understand (hopefully) that quality comes at a premium price.  Even if you can only compete on quality, you are building a reliable and sustainable model.

Benefits of competing on quality

• You can charge more for your products or services
• Your products will stand up against those of inferior quality
• Quality is difficult to replicate (creates a higher barrier to entry)
• Often, your profit margins can be much greater

Disadvantages of competing on quality

• Can be more time consuming
• Volume will be lower

When you are differentiating your company or products based on quality, you are creating a business model that is more difficult to replicate than that of something that competes based on price.  Quality takes a longer time to build, uses better materials and services, requires more resources, and has fewer customers.  However, the main benefit with differentiation based on quality, is your ability to charge a premium and have larger profit margins in the marketplace.

You can have Quality+Service, but not Quality+Price

With quality you are able to effectively offer first-class customer service.  Quality and service go hand-in-hand and (if you’re able to do both) can offer you a tremendous advantage over the competition.  This is especially true in markets where competition is fierce.  You have healthy profit margins, thus you are able to put money into providing excellent service.

However, you cannot compete on quality and price.  You cannot have the best product and have the best price.  These two characteristics are polar opposites of each other and create a business model that is unsustainable.  If you have low prices, you cannot have the margins or revenue that you need to create quality products.  Trying to compete on these two aspects is a model that can’t work.  It’s like buying a Ferrari at a Mazda price (although that would be great, the math doesn’t add up).

Examples

There are many successful companies that compete on quality, or quality & service:

• Apple
• Mercedes, BMW, Ferrari, Bentley, etc.
• Rolex
• Virgin Air

You will notice that the companies above charge a premium for their products and are not the lowest price in their categories or industries.  They have chosen to cater to the consumers who value and are willing to pay for excellent products. You can be very successful when competing on the aspect of quality.

Should you compete on quality?

You need to decide which area you would like to differentiate yourself (price, quality, or service) and continually reinforce that position in customers’ minds.  When you compete on quality, it’s your job to make your customers (and potential customers) understand that you are the right choice because you are offering the best product available.

One more thing: If you are not the best quality product out there, try to compete on price or service instead.  If you try to fake it and compete on quality, your marketing message will be extremely ineffective because your customers already have made up their mind what you offer.  If Saturn started tellling us they made better cars than Bentley, not one of us is going to believe them.  Your job is to reinforce or adapt to your customers’ perception of you or build an awareness that fits naturally with what you offer – price, quality, or service.

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In the midst of building brands or businesses, we sometimes get caught up in the fast-paced world of business.  Deadlines, sales, meetings, they all take valuable little slices of our time each day, however, they are a necessary component of success.

With everything going on around us, it is easy to forget what got us where we are in the first place… our customers.  Whether your customers are those who directly purchase your products or services, your website visitors, or even those that never utilize your products, it is important to take the time to occasionally say “Thank You.”

Why show appreciation?

It is important to show that you appreciate your customers and those that are doing business with you.  It reminds them that they are working or dealing with someone who truly values their business and that they are not just another customer or client.  Gratitude pays dividends in the short-term and down the road.  It shows that you are sincere and actually care that they do business with you.  Remember the last time that you received a thank you, a birthday acknowledgment, or a holiday card?  It makes us light up, brings a smile to our face, and makes us truly feel appreciated.

It must be sincere

You cannot just send thank you cards and holiday wishes that have no sincerity behind them.  By not putting in the time and effort to express your gratitude sincerely, you are simply wasting time, money and even potentially losing customers.  Just going through the motions because that’s what others do, will get you nowhere, and people will see right through your actions.

Around Christmas, we tend to receive holiday cards from those that we do business with or associate with in a business setting.  This year we received several holiday cards from companies we work with that all said something along the lines of “Merry Christmas”, “Happy Holidays”, or “Looking Forward to a Great New Year.”  There is nothing wrong at all with telling your customers that you are thinking about them and you appreciate their business, however, imagine opening a blank card that says “Merry Christmas” and nothing more!  Needless to say, you can easily tell that the company didn’t really go to much effort to show their appreciation.

Another card that we received was very similar to the one just described, except that it had several things that showed this company really cared.  It was the same message as the first card “Merry Christmas,” however, when we opened it there were the hand-written signatures of the company’s executives as well as a personalized note from the person that handles our account.  It made us think that this company really cares about us!  They took the time to have everyone sign the card and the person that we interact with the most put forth the effort to write us a nice “thank you” and holiday wishes.  In this instance, we will remember that they care and want to help us.  They are sincere.

It takes time to show gratitude

To properly show that you appreciate your customers or clients, it will take some extra time, effort and energy, but the rewards you will reap far outweigh the cost.  If you are unable to say “thank you” to your customers properly, sometimes it’s not even worth saying it at all.  When you don’t invest in what is required to show that you really do care, you can actually turn off and upset customers.

It’s the season of giving, show your customers that you really care about them and truly appreciate them and their business.

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I am constantly perplexed by the things I see and hear from marketers and business owners.  The messages that some try to convey to their potential customers, visitors, or the public, often leaves me scratching my head in amazement.

It is our job to understand our customers or visitors and provide them with the information, resources and products that they are looking for.  Too many times we  have all seen marketers and business owners pushing products and services that customers could care less about, and in turn, ends up costing the business time, money and energy.  We need to reverse this habit of trying to sell customers on a product or service for which they have no need or desire… just because we (as marketers and business owners) think it is a great idea.

Often, what it all boils down to is that YOU ARE NOT YOUR CUSTOMER.  It makes no difference whether you are trying to sell cars or you are trying to attract visitors to your website, your goal is to serve your customer’s needs, wants and desires.  The goal is to overcome and view what your customers are looking for and facilitate that process.

Image Credit : Ole Begemann

Market to your customers, not yourself

Just because you may love some design, idea or product, does not mean that your customers or visitors will.  Billions of dollars have been spent trying to force ideas on customers who could care less about what you think is great or something you think they need, simply because YOU think it is wonderful.

For many of us, we are not the customer who utilizes the services we promote.  If you’re young and tech-savvy, what you like will not be what your baby boomer customers like, and vice versa.  You need to keep the focus on what your customers want and remove your own preferences as much as possible.

Try and Try Again

Of course your ideas and preferences will spill into what you are trying to promote, whatever those might be.  Introducing new products and ideas has led to amazing results in countless businesses and industries.  However, you need to know when to draw the line and move on.  If sales start slumping or no one adopts your new idea, trash it quick and remove all of your emotional attachment to your idea.  You may have thought it was the next best thing since sliced bread, but if it doesn’t work, it doesn’t work, and it’s time get on to the next idea.

Put yourself in their shoes

Study their habits and behavior, notice what they like and don’t like, get feedback from your customers.  If you keep noticing that your customers are asking for something specifically or they are complaining about one of your products or services, maybe it’s time to tweak your product.  Then again, maybe it’s something you cannot fix or provide and you need to move on to things that you know you can do well.

Stop trying to sell to yourself

At the end of the day it’s your customers that allow you to keep your doors open, or your visitors that allow your website to be successful, provide them with what THEY want, need, and desire.  Not what you think is good for them.

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It amazes me the time, effort, and energy that businesses put into attracting new customers, but once they get that new customer, they are now ignored or never followed up with.

No matter what business or industry you are in, you MUST follow up with those who have used your products or services!  You have devoted too much energy into getting that customer in the first place, to let them just sit there without hearing from you.

Great examples of following up with customers

My local hair salon has done an amazing job with following up with their client base and have done very well for themselves in the short time that they have been open (about a year now).  Their services are nothing spectacular, their pricing is fair, and there is nothing that makes them truly remarkable.  However, they have developed a great system of following up with their customers that has allowed them to continually keep growing and keeps them constantly in front of their clients.

What they do different: Follow Up, Follow Up, Follow Up

• Pre-Appointment Call:  If you schedule a hair cut, they give you a call a day or so before to remind you that you have an appointment scheduled with them and make sure that the time still works for you.  This is a lifesaver!  I can’t recall how many hair cuts I have missed over the years because I forgot what day or time it was scheduled.
• Day of Appointment Call:  A few hours before an appointment I receive a call to make sure that I am going to be able to make it to the hair cut.
• Post Appointment Call:  A couple days after visiting them I receive a call to make sure that I am happy with my hair cut and they ask if I am completely satisfied with how it looks.  How many times have you had a bad hair cut and switch to another stylist or business because they did not care to ask?
• Mailed Letters: This week I found a handwritten letter in my mailbox from the company that was hand-signed by all of the staff wishing me a Merry Christmas.  Not only is this extremely thoughtful that they went through the effort of hand-writing the letter and signatures, but they included a $10 gift certificate that can be used on my next visit that provides a lot of value.  This is a very wise move and they have figured out there customers and demographics.  Where I live is a very seasonal market and the winter months bring many layoffs and the income per person drops pretty dramatically, so this will allow those that could not afford to visit a salon the ability to do so.

They have mastered the follow-up and follow-through for what is (for the most part) a somewhat commodity type industry.  All of these different tactics that they use also contribute to increased business (each time I hear from them I am reminded that I need to get my hair cut), increased customer satisfaction (no should ever stay upset, because the company has followed up), and a feeling that this company truly cares (hand-written Christmas cards with a $10 voucher).

Many other companies provide some great customer service and follow-up.  I think that GoDaddy has phenomenal customer service, from tech to customer satisfaction, they have follow up process nailed.

What’s holding you back?

It only takes a few minutes to make some phone calls and touch base with your current or past customers to see how they are doing.  It only takes a little time to hand-write thank you or holiday cards and a little cost for stationery and postage but it makes a great impact on your customers.

Increase sales, satisfaction and loyalty

Every time you follow up with your customers, you are showing (in actions) that you really care.  Not only does this translate to satisfaction, but if done right you can turn the follow up into a great sales tool that can drive tremendous amounts of additional business even without gaining new customers.  You will be selling more of your products or services to people who already use your services.

Don’t let your customers slip through the cracks

You have put too much time and money to get your customers to use your products or services to let them go to a competitor.  Don’t let a little extra time or effort to retain them and satisfy them, hold you back from becoming successful.

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