You have probably heard the phrase that “good is the enemy of great”. In today’s competitive marketplace, being good at what you do only works until someone else comes up with something great. So how do you go about finding a better way and enabling your company to become great at what it does? This begins by understanding customers’ needs and then addressing those needs in a way that separates you from the competition. In other words, find a way to differentiate your business.
This is traditionally done by differentiating your products and services. The launch of a new product or service can drive revenue by attracting new customers and by selling additional items to existing customers. When customers are willing to pay more for the item, this can also significantly increase profits. According to a McKinsey study, a 1% increase in price elevates an average company’s profit by almost 9%. When you combine the revenue and profit impact, differentiating products and services can make the effort very worthwhile.
However, differentiation can become a secret weapon when you differentiate your internal processes. Let’s say the industry norm for lead times is 2 weeks. If you create a process that delivers orders in 1 week, you have created a significant differentiator that can both attract and retain customers. This same concept applies to creating advantages with customer service, customer access to information, communication methods, or anything else your customers value.
When you combine the impact of differentiated products/services with a better customer experience, you have an advantage that can keep your business and your financials a step ahead.
You can find additional articles on our blog page or reach out to us at Anavo Growth Partners to learn more.
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