The majority of service businesses are established in response to market demand for a product or service. Many build their businesses by serving that demand and enjoy growing profits without putting much effort into long-term planning of how to dominate the market. However, what happens when demand slows or stops? What happens when the competition sets up shop with a “new and improved” version of your product or service down the road? How do you keep your offering fresh while growing and maintaining your client base? The answer – innovate your business and offer extraordinary value by creating a “market-dominating position.” Consider this. Every choice you make when buying a product or a service represents a point of differentiation between one company and its competitors.
These differences, whether subtle or distinct, determine which customers will buy what they sell. Take the well-documented case of Domino’s Pizza as an example. Why did Dominos become a billion-dollar behemoth in an overcrowded market in just a few years? Did Dominos make the best pizza? No. Did they offer comfortable in-house 4 dining? No. Did they offer the largest selection on their menu? No. They pretty much offered the SAME PIZZA as all of their competitors! They dominated by adopting and implementing one major strategy. They created a market-dominating position in an area with lots of colleges, which was fast, hot pizza targeted specifically to hungry college kids. Ask yourself what, if anything, makes your service business different from your competitors as perceived by your targeted prospects and customers. For the vast majority of businesses, the answer is price.
Many years ago, Nike offered the top-selling Air Jordan 3 for $150. At the exact same time, Target sold an excellent imitation of the Air Jordan for around $40, but Nike outsold them, ten to one.
When you create your own market-dominating position, you will consistently get businesses and individuals to choose your business over your competitors.
But what exactly is a “market-dominating position”? It’s simply any value-added customer perceived benefit, or a combination of benefits, which differentiates you from your competitors, and does so in a strong enough manner it makes your business the logical choice in the minds of your prospects and customers. As an example, a dry cleaner who offers pick-up and delivery would be the only logical choice for any prospect or customer who values convenience. This simple distinction represents a market dominating position. The key is to create added value in everything you do. Prospects and customers DON’T buy based on price; they buy based on the value they receive for the price they pay.
Creating added value is a marketing or customer relations strategy that can take the form of a product or service that’s added to your original offering for free or as part of a discounted package. Like all other elements in your marketing toolkit, it’s designed to attract new customers and retain existing ones.
Everyone can add value to their business. And adding value doesn’t have to blow your marketing budget or take up hours of your time. There are many ways to enhance your business. The key to adding value is determining what your customers and target market perceive as valuable. You must understand their needs, wants, troubles, and inconveniences in order to entice them with solutions through added value products or services.
DIFFERENTIATING YOUR BUSINESS FROM YOUR COMPETITORS
Differentiating your service business from your competitors to dominate the market involves a five-step process to determine your market-dominating position (MDP).
Step 1: Determine your strategic position in the market.
What specific niche market or segment of the marketplace should your service business focus on? Determining this involves combining the skills your business has with the unmet needs of your targeted prospects, and then designing your product or service to fulfill those needs. Domino’s strategic position was “fast, hot pizza for hungry college kids.”
Step 2: Determine your primary MDP.
This is the most dominating advantage that separates you from your competitors. Domino’s Pizza claimed it could deliver its pizza in 30 minutes or less, or they would give it to you for FREE! This was the primary advantage that met the needs of their newly defined market position – hungry college kids who wanted food fast.
Step 3: Determine your supporting business model.
How will you specifically deliver what your strategic position and primary market-dominating position promises? What changes, if any, do you need to consider making to your service business to ensure you deliver consistently on your position and your promise? Domino’s Pizza built a supporting business model enabling them to consistently provide their promised primary advantage – fresh, hot pizza delivered within 30 minutes. To make good on this promise every time, they were forced to create a supporting business model where they built low-cost, plain-vanilla stores strategically located near college campuses.
Step 4: Determine a secondary MDP.
What additional competitive advantages does your service business offer that your customers will perceive as being different from your competition? Domino’s secondary benefits might include special pricing, assorted sizes, a much broader selection of toppings, or additional menu items.
Step 5: Create your MDP statement or elevator pitch.
This is a simple statement you can create by combining steps one through four. This helps you to state unequivocally what differentiates you from your competitors to your targeted prospects and customers. Domino’s market-dominating position is neatly summed up in its slogan, “fresh, hot pizza delivered in 30 minutes or less or it’s free.”
Now we need to define your market-dominating position, and then we can help create a powerful and compelling elevator pitch that will effectively communicate your value to your marketplace. Click here to set up a strategy call.