Competitive U

Do you know what your competitive advantages are?

Chances are you do, even if you don’t realize it. Competitive advantages are likely why your business began in the first place. In fact, they’re the reason most businesses begin.

Drifting off a coast, sputtering around a lake or broken down in a marina somewhere, someone concludes, “I can build a more reliable, more luxurious or better performing boat than this,” then sets out to establish that competitive advantage. Or a customer goes into a dealership and thinks, “The service here is horrible. I could open a store that would put this place out of business in six months,” and develops the competitive advantage to make it happen.

“Your competitive advantages are what separate you from the rest of the pack,” says Noel Osborne, a marine industry consultant and instructor for Yamaha Marine University.

Business guru Jack Welch, the former chairman and CEO of General Electric, puts it even more succinctly, “If you don’t have a competitive advantage, don’t compete.”

Competitive advantages bring buyers through your doors — as opposed to your competitors’ — and add money to your bottom line. Knowing your competitive advantages, and making sure your customers know them as well, can even be the difference between turning a tidy profit or closing those doors for good.

The U
Yamaha Marine Group certainly understands the importance of competitive advantage. The two dealer symposiums the company held in 2007 as part of its Yamaha Marine University program were titled “Competitive Advantages” and focused on helping the more than 300 Yamaha dealers who attended identify, develop and market them.

At the Walt Disney World Swan and Dolphin resort in Orlando last November, then a few weeks later at the Bellagio in Las Vegas, Yamaha’s two-and-a-half day program covered most every aspect of running a dealership – from sales to service and parts to facilities and equipment to F&I, CRM and HR – all with an eye toward identifying or developing competitive advantages in each area.

“I wish we could get every dealer in the industry to attend an event like this,” Yamaha Marine Group Company President Phil Dyskow said during an interview at the Las Vegas symposium.
Dyskow said the media has painted a picture “gloom and doom” in the marine industry, but that “there is no universal truth that the entire market is up or down.” And regardless of market conditions, “Strong brands and strong dealers can significantly outperform the industry regardless of whether it’s up or down.”

To that end, the company works to ensure a profitable dealer network with efforts like its Yamaha Marine University. Yamaha devotes more than 100 team members to the program, who themselves devote thousands of hours working to create and hold events like the symposiums, as well as other workshops and training programs, throughout the year.

Yamaha invited Boating Industry to attend the Las Vegas gathering and share with readers some of the lessons taught there by Osborne and fellow instructors Valerie Ziebron, Tom Strahs and Wally Conway. Much of what follows was discussed and also included in the 250-page workbook the Yamaha Marine University instructors spent nine months compiling to tutor dealers during the course and as a resource they could use upon returning to their businesses.

Obvious advantages
Yamaha’s course taught that there are two areas in which companies can gain a competitive advantage: external and internal. And within those two areas, there are multiple ways to develop further advantages.

External advantages are the products and services that are easily visible to customers. Product advantages can include: quality, longevity, performance, reliability and resale value, all of which can be used to convince a consumer to buy what you’re selling instead of what your competitor has to offer. And as Yamaha asked the attendees at it’s symposium, if you can’t find those, or any other competitive advantages in a product you sell, why are you selling it?

Service advantages such as customer events, boater education classes, convenient business hours, well-maintained facilities, a good selection of inventory, a 24/7 hotline, mobile service and on-water delivery, to name just a few, are also very visible external advantages.

But price, which some businesses use to try to distinguish themselves, should never be considered a competitive advantage. There can be only one low-price leader in each market and trying to become that business is a dead-end road best left untraveled. Companies that try to compete on price usually don’t make enough money to afford to offer the kinds of true competitive advantages that allow business owners to profit and their employees to enjoy a comfortable living.

As one of the instructors mentioned during the symposium, “If all you offer is price, don’t be surprised when customers beat you up over it.”
When consumers shop for a product, the product itself, and its price, are only part of the value analysis they are making. Profitable businesses provide the benefits and services that allow their salespeople to tell what the symposium instructors called “a value story” for the customer, explaining why paying a little more for a given product is worth the price.

“Our competitive advantage is not what our customers are seeking,” Conways says, “but it gives them the value they are seeking.”

Hidden advantages
The money that allows a business to offer customers many of those external advantages comes from its internal competitive advantages. These types of advantages are less obvious – all but invisible to customers – but nonetheless crucial if a company is to compete successfully. Strong internal advantages are the efficiencies that allow a business to serve its customers as well as it possibly can. They are directly responsible for increased profits, which can then be used to bolster more obvious competitive advantages like facility upgrades, events or service programs.

Much of the Yamaha symposium was dedicated to identifying, strengthening and promoting the internal efficiencies. Instructors broke their presentations into sections, including: finance, sales, customer relationship management, facilities and equipment, service and parts, human resources, marketing and F&I. They guided the group through a workshop on each, offering lessons and suggestions while at the same time seeking input and ideas from anyone who wished to share a best practice that could help everyone improve even further.

The importance of having a good business plan, accurate and timely financial reports and a well-motivated, well-trained sales staff — all of which are clear competitive advantages over businesses that don’t — was emphasized. So, too, was the importance of communicating advantages to the customer at every opportunity.

Salespeople were told to make sure every prospect knows what advantages their business has over the competition by the end of the sales interview. That means always making the time to learn what the competition is up to. (Competitors may be offering some of the same services and programs, but if they aren’t letting the customer know that, then the very act of communicating advantages is an advantage.) And each advantage a customer can list for a business helps tilt that person’s value equation a little more in its favor.

Letting people know
Hand in hand with ensuring employees tout competitive advantage is the necessity of doing so in all marketing efforts as well. Marketing expert Jay Conrad Levinson, author of the “Guerilla Marketing Series,” says: “Because of the enormous clutter in marketing messages, I’m tempted to suggest that you concentrate solely upon your competitive advantages and nothing else.”

Many businesses in the marine industry don’t do this. Look at the average advertisement in the local newspaper and, usually, featured right alongside a beautiful photo of a boat is – in big, bold type – a price. But, as Conway says, “You get beat up on price because you market price.”

Every advertisement a business runs should feature one or more of its competitive advantages. They must have merit, however. General statements about having the best service or the most experience are meaningless because every other business says the same thing. Be specific.

Yamaha suggests using numbers. People remember them and trust them – “Ivory Soap is 99 44/100 percent pure,” or “Four out of five dentists agree.” It’s much more effective to tell customers that over 90 percent of those who bought a product from a business would do so again.

Finding and using statistics like those is easy. Just ask the customer. All businesses should be surveying their customers anyway. A simple five-question survey asking questions like, “Would you buy another boat from us? If not, why not?,” or “Was your boat clean when you picked it up?” would yield important information about the sales and service process and also provide a boat dealer with marketable competitive advantage data.

Surveying is also important because it’s vital that a business understand how it is viewed by customers and potential customers. Yamaha tells dealers that people either consider their dealership the best place in town to buy a boat or they don’t. Many businesses think they know the answer to this question, but even if the answer is yes, they often don’t really understand the reasons why.

Those reasons are the competitive advantages a business has, and once it drills down to them, a company can then market those advantages at every opportunity, truly maximizing their power. If they are the things that brought in the current customers, they should bring in the new ones, as well.

As Yamaha wrote in its symposium workbook, “We suggest that, from this point forward, you begin looking at your marketing efforts as extensions of your competitive advantages. Differentiate your dealership from everyone else by marketing your competitive advantages front and center in all of your advertisements and promotions and your customers and prospects will begin to remember your brand.”

Everybody wins, almost
Identifying the things that set your business apart and making sure the systems and procedures are in place that can help you afford to continue to offer them, and add new services as well, will result in a not-so-vicious circle of increased profits that allow for even more advantages. You win. Your employees win. Your customers win. The only losers are your competitors. And that’s probably why you got into business in the first place.