Ask the Expert: Find a point of difference
Small business guru Pavlo Phitidis, chief executive of Aurik Business Incubator, answers your business questions.
Mike Byrham from Absorbetech Environmental: A number of competitors who operate in our industry all are far larger than our company, causing us difficulty in entering new markets. We wish to increase our market but need help, both financially and advisory.
Make yourself special in the experience of the customer
Mike, remember you cannot be all things to all people. If you try, you will land up being nothing to anyone. Given the industry you are in, which is very commoditised, you need to find a few points of difference that make you special and that will distinguish you from your competitors in the mind of your customers. Your perception of this point of difference is irrelevant. You might think you are a really good looking guy but if a bevy of beauties don't think so, then that has more truth than your perception. You are not going to get lucky!
But it’s not all up to looks. Developing some fine features and talents, some great accomplishments that are unique is the way into any damsel's heart or at least one worth knowing.
This is going to find itself in one of three areas.
If you are trading in commodities that are available to anyone and everyone and you are a latecomer to the industry, this is not going to provide a very pleasing result. You will be bashed on price, locked in supply agreements, relationships based on years of trading and nothing you do will unseat the current incumbents in your trade. However, if you develop a suite of products, special and unique to you that offer true value, then you are in with your customers irrespective of how long competitors have been around. What’s the meaning of true value? It lies in one of two places only. Cost or innovation. Cost speaks for itself and it needs to be meaningful. If you save me 7% on R500 per month compared to 7% on R50 000 per month, one is more meaningful than the next and the momentum it takes for me to change suppliers will be worth my while.
There is a world of difference between a huge customer and a big customer; a national customer and a local customer; customers who use thousands of litres of your product and those who use much less. There is a massive difference between customers in different industries and sectors. Know which customers you are going to target; which customers you want to serve is crucial. That way, in learning about them, listening to their problems, the opportunity to provide them with a price or innovation suited to their needs will set you apart from a big player who treats all the same.
Your business always boils down to … customer experiences and operations guide and determine customer experiences. The distribution efficiency of low value chemical products and related products is a distribution game in many ways. If you don’t outstrip or at least meet the capability of your big competitors in this instance, then look to the two ideas above to make yourself special.
You can be standing there with Brad Pitt, Johnny Depp and George Clooney with the bevy of beauties looking on. But make them laugh with a great sense of humour and they will flock around you well beyond the first date!
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