Your competitive advantage is how you treat your customers

Summary: You don’t need to come up with a completely new product or a ground-breaking innovation to be successful in business – make it easy for your customers and they will love you.

Last weekend I went to Warsaw (that’s where the featured picture is from) to meet with the other alumni of a great student organisation I had been part of during my university years (check it out here if you’re a Polish speaker). Every time I see them I come back home with two main thoughts / feelings:

  1. I am super pumped up, energised, motivated and inspired, as most of these guys are successful entrepreneurs, still promoting and spreading the spirit of entrepreneurship in Poland
  2. I am a little bit depressed as I almost feel like I haven’t achieved anything substantial in my life yet (my mind probably generates that thought because of the fact that I don’t have my own business yet)

This time, though, I also got a third point that emerged from multiple conversations I had with some of my entrepreneurial friends.

Tomek, a great guy I’ve done many successful projects with (that’s us leading the two groups during a flash mob on the Main Square in Krakow, Poland) currently works as a trainer for a big Polish bank. At the same time, he’s a partner in a company that offers co-working space and accounting services to small- and medium-sized businesses. Nothing innovative, you might say, and I will agree with you. But Tomek’s company’s competitive advantage doesn’t come from the innovative character of his service proposal.

Another guy I talked to is a Sales Director at a company that produces and sales specialist furniture for barbers, beauty salons etc. Again, chairs have been around for ages and yet this company has about 50% of the Polish market in that segment.

A different gentleman called Matt is currently alpha-testing an event management app. He combined different functionalities of the apps already on the market and offers his clients additional options, e.g. targeted event messaging based on detailed data, analytics tools etc., essentially rendering other apps unnecessary and therefore sparing his customers from having to download any other app apart from his. That’s a bit more innovative, but still not a never-done-before concept.

So what do all of these entrepreneurs have in common? Why – despite of not having a ground-breaking innovation that the world has never seen before – do their clients love them and want to do more and more business with them?

They understand their customers and make their lives easier.

Tomek’s co-working space is equipped with everything a freelancer / a SME needs. Fully resourced kitchen, a reception desk, Wi-Fi, meeting rooms, breakout area – you name it, it’s got it. His customers highly appreciate the fact that all they have to do is show up, open their laptops, work and leave – and all the maintenance will be done for them. They are even wanting to pay more than the initial asking price just to secure the office for themselves, just because they value the fact that Tomek has made their life easy. Minimising customer effort is a crucial competitive advantage.

The beauty salons furniture manufacturer and distributor on the other hand is not only making it easy for his customers, but he also deeply understands what they value. He knows that they need the chairs to be comfortable, preferably in dark colours (hair dying) and structurally strong enough, as they have to survive hundreds of people of different body types and weights sitting down and getting up throughout the day. He even told me a story of a competitor’s failure – they were manufacturing office chairs and thought “we’ve got the chair production know-how, we can do specialised barber chairs”. They didn’t make the effort to comprehend the real needs of their customers, though, and therefore their products weren’t durable enough, didn’t meet the specific requirements and ultimately led to the whole company’s (!) demise. Understanding your customers’ needs is decisive to your company’s very survival.

Finally, Matt, the guy working on the event organising app, has not only combined different functionalities of other applications, but he also merged the two points above. He’s making his customers’ lives easier, because they don’t have to put in additional effort into installing multiple apps or looking for their required functionality. All they have to do is download the app, install it et voila, they’re up and running. He also understood what his customers need and even went beyond that – he knew that they would benefit from an all-singing all-dancing tool, so he provided them with it; on top of that, though, he focuses on adding value to his customers’ businesses by allowing them valuable insight into all sorts of event data, cut in multiple useful ways, that is focused on maximising the conversion from an event-participant to a long-term client of the event-organiser. He could’ve just said “this is an app that you wanted, do with it as you please”; what he’s actually communicating is “this app will allow you to organise events with minimum effort and maximise your income through effective utilisation of big data – and we will teach you what that effectiveness looks like”. And that’s a huge difference.

I see it every day in my job – the customers of my clients’ value their time and effort and quite often are willing to pay more to avoid those two being wasted. I would love my gas provider to read this text – they are communicating unclearly with me, sending me invoices out of the blue, not allowing me to input meter readings online and in essence making me contact them pretty much every month to clarify something. I’d love to pay more to just be able to not have to do it! And there are many like me, so next time you’re looking for a business idea / thinking about your current business and how to improve it, understand where your customer is facing the most problems that are costing him / her unnecessary effort and start there. Resolve their problems, make their lives easier and they will love you.

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