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Positive strategies create competitive businesses

Marketing | May 1, 2008 | By:

They cut your profits, bid for your jobs and entice your best customers with special deals and useless gimmicks. Those Other Guys. Whether your head-to-head competitors do business across town or across the ocean, their successes can bring you anxious days and sleepless nights if they’re coming at your expense.

One nightmare that wakes business managers at 3 a.m. is the nagging realization that the competitor may not be the real problem. A quote by Randy Littleson, vice president of Kinaxis, an Ottawa, Canada, response-management firm that assists businesses with rapid fluctuations in supply chains, says it all: “Today, whoever can deliver the product a customer wants, how and when [they] want it, wins … period.“ If your business isn’t delivering the goods, someone else will.

Experts in successful manufacturing and textile businesses have practical tips on how to prevent Those Other Guys from making you edgier than 10 cups of caffeinated java before noon. Their solutions don’t require duels at daybreak, bad-mouthing competitors or industrial espionage. Instead, they recommend customer research, process improvements and clear vision for building a competitive business.

Ask the customer (who’s always right)

“Know what the competition is doing,” says Shelly Alex, vice president of sales and marketing for Moss Inc., Lincolnwood, Ill., a leader in tensioned-fabric structures. In the fabric world, most companies are privately owned and don’t produce annual reports with facts, figures and projections, so Moss goes to the source: the customer.

“We gather customer intelligence,” says Alex, who conducts customer surveys every 18 months and ensures that sales staff ask how Moss is doing. “We talk about the competition with our staff and let them know how it affects the business. When a customer says ‘So-and-so does this better than you,’ we’re bringing that back to management for discussion.” She also pays attention to the competitor’s public face, including Web sites, marketing materials, ads and news releases about changes in leadership or direction.

Bring out your best

Ask your managers and employees: “What do we do better than anyone else?” If you get hesitant replies, long silences or diffused responses, it may be time to identify your best thing. Kim T. Gordon, writing in Small Business Now, advocates an easy exercise to determine a company’s tangible and intangible benefits to customers.

List company features, products or services down the left-hand column of a page. “Features may relate to price, convenience, location, customer service policies, your educational background, awards, billing practices, length of time in business, delivery practices and all the special characteristics of your products and services,” Gordon notes. In the right-hand column, translate groups of features into customer benefits, such as saving money, low maintenance costs or superior product performance. “Look over your list of benefits and string them together into a single sentence that begins with the name of your company and states what your clients or customers will receive when they select you,” Gordon advises. Use this statement to signal who you are and why you’re better, both inside and outside your company.

Find and fix the flaws

Continual process improvement distinguishes a business that takes change seriously from one stuck behind the curve. By analyzing every step and feedback loop in a process that isn’t working well, companies can find and eliminate inefficiencies, delays and bottlenecks. Control Design magazine’s Dan Hebert and Joe Feeley reported on SpaceKraft, Salem, Ore., a maker of corrugated boxes that worked with Concept Systems, Albany, Ore., on process analysis. Using Rockwell Automation’s PlantMetrics™ software, SpaceKraft found that the bottlenecks were far different than the ones that managers expected to find. “The results from removing the bottleneck have shown an improved increase/output by a measurable 31 percent,” says Glen Lawson, SpaceKraft production manager.

Set your sights high

Greg Schmieler, general manager of Laurel Awnings Co., Apollo, Pa., uses a 1-percent rule to set targets for the business year (see the Review March 2007 issue). Add 1 percent of last year’s total sales revenue to total sales revenue for next year’s goal. Subtract 1 percent of last year’s total costs from total costs for next year’s target. Then subtract your target costs from your target total sales for a new bottom line. Schmieler also works alongside his employees and asks questions&mdah;and refuses to accept the I-always-do-it-this-way line. “Develop a self-imposed goal (SIG) for every job,” Schmieler writes. “SIGs are the only way any company can gauge itself on productivity levels.”

SWOT the competition

When your own business is fit and in fighting trim, Tom Dorr, director of the Small Business Development Center, Western Washington University, Bellingham, Wash., recommends that you SWOT the competition. Make a list of competitors and analyze their strengths, weaknesses, opportunities and threats (SWOT) to help identify your differential advantage. “Your differential advantage becomes the foundation of your sales and marketing message,” Dorr writes. “It helps you target your market to those who need your products and are willing to pay for your differential advantages.”

Combine and conquer

If you want to expand your scope to capture more customers, a merger or partnership with another business might be a good bet. Moss Inc. makes tensioned-fabric structures, but following a merger with Nichols Inc., Salt Lake City, Utah, a large-format printing operation, the combined company “has the widest breadth of product offering in the business,” Alex says. “We can fit almost anyone’s budget, a big plus for markets such as retail interiors. It allows us to clearly say we’re the best.” Partnerships formed to realize an innovative or specific product line are becoming more common, as businesses search for superior product performance without investing in huge technology upgrades or learning curves—and benefit from the efforts of two sales forces instead of one.

Know what’s next

Textile software, machinery and science changes from minute to minute, and if your business doesn’t have a human radar dish—an employee or department constantly scanning the horizon for innovation or pitching wild ideas to colleagues who mutter and grumble—get one. These Radar O’Reilly types read technical journals and industry trade publications, subscribe to relevant listservs and actually read computer software reviews on their lunch breaks. Match these innovation junkies with hard-headed engineers, chemists or plant managers who want proof of success, and when they agree that it’s time to leap into new technology, go for it. You want to make sure that you’re “on the cutting edge, not the bleeding edge,” according to Moss’ Alex

‘E’ all that you can ‘E’

Web sites are gateways where prospective customers can find tools, ideas, locations, interactive forms for price quotes, detailed product information or FTP sites to upload art and graphics. Attractive and functional e-commerce Web sites cost money, take time to develop and require long-term commitment to updating and upgrading. If you haven’t upgraded your Web site or established an e-commerce portal, a competitor with a 20-year-old geek Web designer who was surfing the Internet as a toddler can eventually pose a real threat to your future.

Don’t forget to blink

Now, wait a minute. You’re eyeball-to-eyeball with your competitor, and you should blink? Author Malcolm Gladwell, writer of the best-seller Blink: the Power of Thinking Without Thinking, gives an overview of new science about the “adaptive unconscious,” the ability to make fast decisions based on information we don’t realize we know or data that we process as part of daily life. “There are moments when haste does not make waste,” Gladwell writes, “when our snap judgments and first impressions can offer a much better means of making sense of the world.” So ratchet down the caffeine, get a good night’s rest and follow your instincts. After all, you didn’t get to be successful by trusting anyone else’s gut.

Katherine Carlson is a freelancer and technical editor based in St. Paul, Minn.

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