The Business Triangle of Death
What would you revenue be if you had no competition? How much could you price your services?
Keith J. Cunningham in his book “The Road Less Stupid,” gave really valuable advice on this topic.
He states that you cannot persuade a potential customer to buy your product/services and not the other guys’ unless you can communicate the difference in a clear message:
Buy me and get this. Buy them and get that. If you want this (and I think you do), buy mine.
Competitive Analysis is Paramount for Any Business
Nowadays, nothing is unique. By the time you’ll have an epiphany for a new business idea, which might seem authentic to you, there is a high chance someone has already invented it on the opposite side of the world. You just don’t know about it yet.
Studying competition is a core part of my UX strategy framework. It helps me understand not only the message we want to transmit to our customers but also define the internal priorities/focus (cost, speed, information density, quality of relationship with the customer, innovation, features, overall design, etc.).
Without a sober evaluation and understanding of how you stack up against competitors can result in failing with attracting, retaining, and deepening the relationship with your core group of target customers.
Why?
Because at the heart of a competitive audit lies an awareness of what your rivals are doing and what message you need to communicate to create a sale.
The core of any business strategy is the promise made to the customer of how the business will deliver a unique mix of products, services, and customer experiences.
Here is the key thought: The customer has the only vote on whether or not that promise was delivered.
Three Primary Value Propositions
- Operational Excellence (Home Depot, Walmart, McDonald’s) The internal focus is on costs, speed, and/or quantity of selection. Hint: It’s hard to be the low-cost provider if you are not the low-cost producer!
- Customer Intimacy (IBM, Nordstrom, the neighborhood drugstore) The internal focus is on both the quality of the relationship with the customer and exceptional customer experience (service).
- Product Leadership (Intel, Apple, Tesla) The internal focus is on innovation, functionality, features, and the overall design and performance of the product.
A big mistake small business owners make is attempting to be all things to all people!
In software development, there is a similar concept called “The Triangle of Death.” For any software development project, there are three moving parts: time, price (cost), and quality.
In other words, it’s almost impossible to find a business that delivers the highest quality, in the shortest period of time, at the lowest price, and has a world-class customer experience process. The reason is because that is not a formula for scaling a business or for being profitable.
That is a formula for trying to please everyone and, as a result, going broke.
Originally published on https://30kstrategy.com. Read the full article with key takeaways here.
Thanks for reading!
