Business is a minefield of complexity. One such that often goes unspoken of but may will be the most important is knowing your own product. In some businesses it is very easily to tell what it is, you manufacture a good and that’s it. Or perhaps you provide a service and that’s it. But the business landscape changes dynamically and new business models bring about new considerations.
First things first
This discussion is important because as business owners we need to know what we are doing to best decide how to do it. It’s about knowing where to focus our time and energy-so as to get maximum results. In our world where not only are 75% of goods sold manufactured in China but roughly 75% of our competitors are selling the exact same good as us, we still need to somehow carve out a competitive advantage.
Goods businesses
Let’s use a simple rule of thumb here; if you manufacture or uniquely modify the good you fall into this category. Businesses in this category tend to be heavily invested in product quality and quality control. Your competitive advantage is derived primarily from what you put into the product that nobody else can.
As a startup you may be heavily involved in the sale of your product to end users but with scale comes having to let go as growth may entail engaging distributors. Here matters such as brand identity are key. You need to create a brand that sells in your absence.
Service businesses
If you buy a good to sell it on or provide service your business falls into this category. Yes, even if you are selling physical goods it’s important to know that you have little to no say in the quality of the product. While you may have a quality buying process just remember that it’s highly likely your competitors have access to the same goods. On the other hand, a strictly must be focused on the processes through which a customer goes in the use of their service. Consider everything from the initial consultation to applying the service to their circumstances.
From a selling perspective service business are best served by keeping sales as central to the business as possible. While some can be homogeneously packaged and sold by third parties the personal touch is always important. This is even more important for businesses selling on goods. How you treat the customer in the sales and after sales process matter most because your competitors already have the same goods and offer equivalent if not identical quality. So, pay extra attention to your sales and after sales process.
Hybrid businesses
These are businesses where a manufactured good is provided but is coupled with the service provided by the business so much so that they cannot be separated, a restaurant is a great example. Hybrids provide unique opportunities to really cater the customer experience and create unique experiences that result in customer loyalty.
Hybrids enjoy the ability to heavily participate in the sales and after sales process like no other. And while this should be an advantage a quick look at service provider relationships in Zimbabwe will show you just how much this can go wrong. The danger here comes when the good in question puts your service portion of the work at risk. A mechanic in a fix and supply arrangement who uses a poor spare part in a repair may give excellent service to have it all ruined by a poor-quality input.
Competitive advantage
It’s important to know your source of competitive advantage to best inform your choices when it comes to promoting your business going forward. It may feel nice telling your customers that your Alibaba sourced goods are unique but once they know they are not you’re in a fix. The customer will always be more impressed by how you sell it. In addition, the trust customers place in your service skills gives you the opportunity to create a bigger (more sales) and wider (more products) back end. Hybrids must make careful choices when it comes to goods for input and always be cognizant that the nature of their offering ties the two very closely together. Service is more than smiling at and greeting customers. Service excellence starts in the design of the sales process. Are you complicating a process that could easily be streamlined? Make it easy for your customer.
