Online store, online market space – part 11: breaking away from the competitive crowd
This is my eleventh posting in an ongoing series on best practices for building a startup online store (see Startups and early Stage Businesses, postings 20 through 29), and I want to focus here on an issue that has been at least implicitly touched on in many places already. I have written about offering a unique value proposition in your products and services and about market share and the importance of building a position in the marketplace that offers unique value in the minds of your customers and potential customers. I want to start this posting by sharing an adage that I was taught early in my career and that I have found to offer real value.
• It isn’t worth it building a business if you can only expect to be 37th best (and just a member of the also-there pack.) Plan and build to be the best and the leader in your marketplace, and if you cannot reach that top position, have close second as your fallback position where you would still be capturing a significant market share.
This posting is all about breaking out of the pack and excelling, and it deals with issues I have discussed with every startup I have ever worked with and in any capacity. Now I share this here and with this series and blog.
It is easily to simply say “be the best and insist on being the best” and leave it at that. And all you have with that is an empty slogan of the type we all see on mass market motivational posters – but without the usual accompanying nature photograph to give people reason to pay attention to this at all. The value in this statement and the source of value I have strived to bring into focus in my own business practice is in converting it into a working, operationalized guideline for actually accomplishing this goal.
Kim and Mauborgne offer what is probably the best known starting point for building a position of marketplace leadership with their book:
• Kim, WC and Mauborgne, R. (2005) Blue Ocean Strategy: how to create uncontested market space and make the competition irrelevant. Harvard Business School Press.
Offering a distinctive and even unique product or service, or combination thereof and creating new market opportunity and new market space that others are not competing in (yet) is definitely one way to achieve this. But consider the hardware store that may not offer anything unique in a global marketplace sense but that is unique in what it offers to its local community and for a range beyond that immediate reach. Unique value proposition is not necessarily an absolute. It is only necessary that it be unique to the audience you are reaching towards.
In an online context that may mean cultural sensitivity and languages supported in the sharing of information and in the set-up of your ecommerce solution. Online we still divide into communities and even local communities. It is just that in this context, “local” does not necessarily mean geographically confined.
But the real thrust of this posting is in focusing on a different facet to this concept of unique value proposition. That is the simple fact that value proposition per se is all in the eye of the beholder, and here that means the customer and potential customer. And that is not necessarily entirely in the end product or service offered.
• Look to your entire suite of business processes and at your business cycle and at every stage and aspect of this from the perspective of your customers and in meeting their needs.
• Are you doing things that create potential for disconnecting from your customers in offering them the value they seek?
• Are you doing the things that would help support a positive, value creating opportunity for the customer to meet their needs?
• Every stage and every aspect of your business cycle and every process that goes into forming this cycle should contribute to a self-reinforcing virtuous cycle of customer support and customer-oriented value creation.
• And it is possible to create that unique value proposition by excelling in any step in this process beyond what your competition offers.
If your products and services are in may respects standard to the market but it can be difficult for the customer to find the best fit solution to meet their needs out of a wide, complex range of options available, a marketplace leader and even a blue ocean strategy leader may be one that offers incredibly good customer service and support for finding and obtaining that best-fit set of products and services for meeting specific customer needs. The unique value you offer may be from developing incredible supply chain capabilities for keeping the right finished products and parts in stock and immediately available if running low, and in getting the products that your customers need to them faster than anyone else and with faster turn-arounds on even complex, unusual orders. Your unique value proposition may center on post-sales support and helping your customers obtain long term sustaining value from the products and services you offer, and in ways your competition fails in. Any and every step that has potential impact on the customer and their customer experience offers opportunity for you to be the best and for you to capture market leadership position. The best of the best businesses seek to excel at as many steps and stages in their business cycles as possible in this, and on an ongoing basis.
Being the best and taking a leadership position in your marketplace is all about keeping everything you do focused on offering value and great value. Leadership in this is all about always looking for the bottlenecks and in addressing each in turn as they arise, and always from that customer-needs perspective.
The next posting in this series is going to focus on the green and sustainable business, and on building your online store as representing the values and concerns of your marketplace and your potential customers.