Instead of picking the competitors you’re “better” than, identify the customers for which you are the only answer.

What differentiates you? Do you feel like all of the words have been taken, twisted and used so often until they are tired clichés?

In a world of imitation and replication, whatever you bring to the market as your competitive advantage will soon be copied. So I’d like to challenge the premise of competitive advantage.

Inherent in the term “competitive advantage” is the idea that you are defining yourself against the standard of others, your competitors. That’s an interesting context–especially if you feel you are truly unique in your market.

Recently, a reader commented on my blog post about “What a 9-year-old Can Teach You About Selling”:

“I like this advice–Simpler is better. How would you explain your competitive advantage to a customer (without mentioning the piano lessons)?”

Here’s what I said:

“My recommendation starts with the customer. For a very specific customer that you or I would define for our own companies, there is not a clear competitor- we are the absolutely best choice. I challenge companies to define who that customer is … for me, it’s companies between $5M and $100M in size, selling in a B-to-B environment who have at least one account already that represents greater than 5% of their business and wants to double their company in less than 3-4 years.

That’s pretty specific, right? Probably less than 2% of all U.S. companies fit this- but for them, I am the best solution and I can prove it.

Here’s the short version: Don’t define your competitive advantage by your competitors. Define your distinction by your customers.”

Let me answer his question more specifically: How do you build a customer-driven (rather than competitor-driven) statement of your advantage? Use the following three steps.

1. Define your guaranteed home-run customer.

There are customers out there for whom the difference you make is so significant that all other options fade to nothing. Do you know who that customer is? If not, get clear on that before you move to the next step.

2. Describe the problem you fix perfectly for this ideal customer.

You are often the ideal vendor not just because of who they are, but because of their current problems and challenges. Are you best when they are growing fast, shrinking, reorganizing, going international? You need to understand exactly what problem you solve.

3. Declare your market.

Once, while driving on a country road, I saw a dusty old building with a sign out front: “The Stradivarius of Duck Calls.” It didn’t say “animal calls,” “water-fowl calls” or even “bird calls.” Once you know whose Stradivarius you are, be ready to declare it loudly and proudly.

One final note: Often, when I challenge companies to do this exercise, they reply, “it depends.”

Wrong answer.

This exercise is not about who you can help, or what you can do. Those are “me too” answers.

Sure, I know that your company does lots of different things and serves many customers. But if you want a new definition of advantage, you can’t start with what you also do “… but better.”

This is about understanding–and being able to declare–for which customers you are the onlyperfect option.

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