While the business world has always been subject to change, the pace of that change has increased dramatically. What worked last year might not work this year. Failure to adapt to this change could put you and your business in the group that includes Eastman Kodak, Woolworth, Johns Manville and countless others.
But how do we adapt? Obviously, we must continue to provide what the market demands. But there are countless competitors that provide the same product or service that we do. How do we differentiate ourselves in the marketplace? In other words, why should a consumer choose us over our competitors?
One answer is price, but we all can’t be Amazon, nor should we want to be. By competing on price, you will, by definition, lose business to any competitor who is willing to offer your product or service for less than you do.
Another answer is quality, but the problem there is the definition. At what point does a product (or service) become “quality?” If it’s better than 50% of its alternatives? 75% better? 90%? Sure, we should strive to make our offering “quality” (unless we’re selling disposable razors and the like), but even more important is for the consumer to perceive it to be quality. Some, but certainly not all, consumers will pay a premium for something they perceive to be quality.
I recently attended a talk where the speaker addressed this very issue. He worked for Harley-Davidson, and asked how Harley could sell its Sportster model for $24,000 while Honda sold a similar motorcycle that was indistinguishable to the untrained eye for $8,000. It certainly isn’t quality, as Honda is virtually synonymous with quality.
The same is true with the iPhone. Androids with just as many features are available for sometimes less than half the cost. Just because many iPhone users (and Harley owners) may not be able to articulate why they are willing to spend (considerably) more for a product that does the same thing, you can be sure that the executives at Apple (and Harley) know.
The speaker said that the businesses that survive and thrive in the future will be those that are able to articulate the difference that they bring to the marketplace. Those that don’t or can’t articulate that difference will be reduced to competing on price, and he gave flat screen TVs as an example.
I believe Emerson was right when he said that thinking is the hardest task in the world. I’ve devoted many hours the last several days thinking about and trying to articulate what it is that makes my business different from my competitors, and will devote many more in the coming days and weeks. Because the alternative is to become a commodity. Or worse, irrelevant.