Innovate How You Deliver,
Not What You Deliver
What’s unique about your small business? What sets it apart from others (aside from the fact that you are the one running it)?
If your business is not unique — and unique in a way that customers value — there’s no compelling reason for them to do business with you instead of your competitor.
Now, occasionally uniqueness is an accident of geography. "I have the only store in the area that offers these products." But if that’s your competitive advantage, it’s a fragile one. It can evaporate overnight if another business moves onto your turf with the same offerings.
Genuine competitive advantage comes from innovation. From delivering your product or service in a unique way. In other words, competitive advantage comes from innovation in HOW you deliver, not so much WHAT you deliver.
Innovation in How You Deliver
Have you ever noticed how fast-food restaurants tend to cluster in a given area? Just minutes from my house is a two block stretch with about ten fast food restaurants.
And more traditional restaurants cluster the same way. I frequently meet clients for lunch in an area where an Olive Garden, a Red Lobster, and an Outback Steakhouse stand shoulder-to-shoulder.
At first glance, this may seem like a foolish business move. Why locate next door to another food-service establishment?
The answer is, it’s good for business. As counter-intuitive as it may seem, restaurants are generally more profitable if they are located near several other busy restaurants.
What this clustering does is to condition local customers to gravitate to the "restaurant section" of town when they are looking for a place to eat. The result is that restaurants in the cluster draw significantly more business than they might if they were in isolated locations.
The Distinguishing HOW
Once customers come to the "restaurant section," however, they must then decide which business to visit. In the case of the Olive Garden, Red Lobster, and Outback Steakhouse which I mentioned above, they do differ in WHAT they offer — one specializes in Italian food, another in sea food, the third in steaks.
But what if another Italian restaurant or another steak house were near the same cluster? What would set one Italian restaurant apart from the other? Or one steak house from the next? The distinction would most likely be in the HOW with which they deliver their WHAT.
We see this principle in bold relief in the fast-food industry, where competitors may differ little in the WHATs on their menu. Consider the Burger King, Wendy's, Whataburger, and McDonalds which I pass en route to my office. They sit within sight of one another. And they all offer hamburgers, fries, and soft drinks as their primary fare. Their WHAT is fundamentally the same.
Yet each is unique in HOW it delivers its fare — the flavor, the range of selections, how the store accommodates families with small children, the speed of the drive-through line, etc. Each business has put more effort into HOW it delivers than into WHAT it delivers.
Focusing On Your Startup's HOW
When people are launching their first startup, they are easily seduced into giving the lion’s share of their attention to WHAT they will offer rather than to the HOW within which they will package the WHAT. Yet that’s a terrible mistake. In today’s world, with its proliferation of goods, services, and commodities, it’s difficult to offer a WHAT that is unique or innovative.
I was reminded of this fact just the other day. I was meeting with a small business client who is bringing a genuinely innovative product to market. It’s a game-changer in a lucrative industry. And there’s no other product like it on the market.
But while talking to him, it dawned on me how unusual it is for me to have a client like this. In over a dozen years of coaching owners of business startups, this is only the second time that I’ve worked with someone whose unique innovation was a WHAT. For most small businesses, the key to success is innovation in the HOW.
The Customer's Experience
Done properly, innovation around HOW serves to solidify your brand. In the customer’s mind your brand becomes associated with the way in which you deliver. The way in which you deliver, in turn, determines the customer’s EXPERIENCE. And EXPERIENCE drives the buying decision for today’s public.
Think I’m wrong? Then spend an evening watching commercials on television. Pay special attention to commercials for big-dollar items such as cars, vacations, air fares, cellular service, or credit cards.
What do these commercials play up? Not the direct benefits of the product, but the EXPERIENCE which you will have as a result of adding this product to your life. Automobile commercials take you to scenic settings. Airfares take you to exotic locations. Credit cards take you to a world of thrilling events.
Put simply, EXPERIENCE sells. And if good experience sells, it's no surprise that poor experience turns would-be customers away.
A nearby restaurant recently received rave reviews in the local press. So my wife and I tried it out. The food was certainly good, the portions generous. But our overall experience was far from stellar. Even before the meal was over, we had decided not to come back.
You probably react to a poor buying experience the same way, don't you? Our lives are so hectic and packed with commitments that we don’t have time for a poor experience when we are paying money for a product or service.
That being said, what your customers or clients experience with your business is more a product of HOW you deliver than it is of WHAT you deliver. While you don’t want to ignore the quality and benefits of your product, your innovative energy will return its greatest dividends when it is focused on HOW you deliver.
Highlighting Your HOW in Marketing
Marketing around an innovative HOW is a time-proven formula for success. To cite just one example, notice how the major car rental companies distinguish themselves from one another in their marketing. Their advertising challenge is that they all offer customers a similar choice of cars. And rental fees are usually only slightly different from one agency to the next.
But Enterprise will pick you up, as their tagline constantly reminds us. And National will give you the choice of any car on the line, including a free upgrade to the next class. And who can forget the advertising punch line that Avis employed for decades: "We try harder."
In a word, they all offer the same WHAT. But in their advertising they distinguish themselves from one another in the way that they deliver. They bill their HOW — the experience that you have with them — as what makes them unique.
Which then brings us back to our original question. What is unique about your small business? As you see now, to be truly unique you must innovate in terms of HOW. So let’s expand on the original question and ask, "What is unique about HOW your small business delivers? How is it unique in the experience it provides for customers?"
Don’t ask these questions once. Ask them regularly. Innovate continuously in how you deliver. It's the primary way that you will set yourself apart in the eyes of customers when they are deciding where to take their business.