Susan Wilson Solovic: Hi, welcome to sbtv.com I’m Susan Wilson Solovic. And, today we have a special guest in our studio Jaynie Smith is the president of Smart Advantage, which is a marketing and management consultancy. She works with mid-size and fortune 500 companies and consults with CEO’s all around the world. She is also a popular speaker and she’s the author of “Competitive Advantage.” Welcome Jaynie.
Jaynie Smith: Thank you, thanks for having me.
Susan Wilson Solovic: This is a great book by the way, what is the genesis of writing this book?
Jaynie Smith: Actually, there are number of things but let me start with my career. The first half of my career was spent in fortune 500 companies and I always joke about this I have a difficult time saying without chuckling. Is that everybody that I ever work for is currently out of business or incited on the front page of wall street journal.
Susan Wilson Solovic: Not so good.
Jaynie Smith: but I can tell you, you can learn as much working for a bad company as you can for a good company. So fast forward I leave the corporate world, I become a consultant. I start coaching CEO’s and start asking myself the question. What did I learn in big companies that smaller, mid-size companies can benefit from?
And vice-versa and one thing can kept it up coming up for me over and over again. It was just a notion of voice of the costumer, market research and why so many middle market companies don’t spend any effort really getting market research done. So I started to created a talk, back then calling for elite but it was based on this. My experience, big companies do lots of looking they invest a fortune in market research but they rarely act on it. So they do a lot of looking and little no leaping midsize and small companies do lots of leaping and little or no looking.
So I went out there making an effort to try and get them to understand the value and the ROY and return to the investing in market research. Well I was not having much luck middle market companies, small business tend to think we know our costumers really well, we don’t need to. And that leaves me to danger and disparity which we will talk about later. Which is that costumers don’t tell you the truth when you’re asking you really need un-biased market research? So anyway fast forward again, and I get invited to talk to an advertising group one day, who ask me to speak on the subject of competitive advantage. You can literally say the proverbial light bulb go on over my head. I’m thinking any agencies asking me to speak to them on competitive advantage are that what they do for their clients. Then I started to think about my corporate days and working with that agency. Well today more and more of them are getting focused on that.
Many of them, they’re really wonderfully creative. And they help you place your ads on the right place. But it’s difficult for any outsider and agency or anyone to know you’re competitive advantages nearly as well as you. So I started to play with that, I started to read some of the great marketing authors Jay Conrad Livingston who says, “I believe company should focus solely upon competitive advantage for this is the wisest investment a company can make.” And since working with my clients on this again fast forward I know he was right.
Susan Wilson Solovic: One of the things that really fascinates me and I found it very hard to believe. You talk about 99.8 % of a thousand CEO’s you survey can vaguely or not at all describe their companies competitive advantage. How can it be Jaynie because I would think every company needs to know what is competitive strategy is.
Jaynie Smith: It can continue to stagger me, since I wrote that. That was a thousand CEO’s, I’m not to 3,000 CEO’s and about ten can answer the question. And it has to do with the tremendous misunderstandings about what a competitive advantage is.
I ask audience all the time what’s your number one competitive advantage. And I ask companies internally what’s your company competitive advantage? And the answers I get our strings, quality, good costumer service, good people, knowledgeable, reputation. Those were given; do you have to have those in just to be in business, if you do not differentiate and that’s the problem.
Most CEO’s think that their strengths are competitive advantages? There just givens, they deliverable you got to have.
Susan Wilson Solovic: You also talk about two types of competitive advantage. Can you explain that and then give us an example of the differences?
Jaynie Smith: Sure, competitive advantage differentiates us for a time but can be duplicated. I will tell my clients it’s a moving target, you got stand on top of this on a regular basis. But the two differentiators that something you have on the competition doesn’t. And then there’s something that I call competitive positioning which is that you may have it. Your competitor may have it but if you stay and claim it and they don’t because there asleep at the wheel which a lot of companies are. Then it appears to be you’re competitive advantage and I love to give you an example of VOLVO.
If you buy a VOLVO you buy it because it’s an unison audience will say safe. And then I say it’s the safest car on the road today and they say no in unison. And then I say what is and the room goes silent.
Susan Wilson Solovic: They don’t know.
Jaynie Smith: They don’t know, because no other car manufacturer, no other auto manufacturer has claimed safety the way VOLVO has. So they own it because they claim it and the others don’t. Others claim it but they vary it in a whole list of other attributes that they are trying to sell about the automobile.
Susan Wilson Solovic: Well I think it’s interesting to talk about companies use a lot of vague words like we have great costumer service or we have the best products on the market. But you say companies should quantify those statements.
Jaynie Smith: Absolutely the way to get to this is to take those things. I wish that you may actually have a competitive advantage in your costumer service but if you just say we got great costumer service. It’s subjective, so the definition that I use is your statement should be objective enough not subjective, quantifiable not arbitrary not stated by the competition and for heavens sake it’s not a cliché.
And having a cliché is one stop shopping 24-7, exceed your expectations they don’t mean anything anymore. At one time they did, they do not anymore. So be specific to your point costumer service, we have 25 more costumers reps than our competitor. Or we return all calls within 30 minutes, be very specific measure and track those attributes so that you get credibility.
Susan Wilson Solovic: How does a company even to begin to define this because as we said earlier you think you probably know what your competitive advantages but you may not. So what’s the 1st step we could take to define competitive advantage?
Jaynie Smith: The first step is to get your eyes off, believe it or not the product or the service. That’s the most difficult time we have is companies say my product is better or it’s not better or worst yet what we hear a lot is a commodity. And even for the commodity products, the product is a commodity in many cases its how you deliver it. It’s whether all your deliverables, all the other things turn as guarantees, inventory and stock. Ability to deliver quickly, payment options, all of these things gives you opportunities to identify competitive advantages and competitive positioning statements.
Susan Wilson Solovic: What about that you just mentioned the word commodity, what about companies that try to compete solely based on price of differentiation, good idea, and bad idea?
Jaynie Smith: Of course it’s a bad idea, there are some can all be wall mart and if you’re not with that kind of buying power. You go there and it’s a short slow death. I've seen too many companies leap frog each other to the bottom of the margin ladder, they go you can lower your price I can lower mine. You’re lower yours you lower mine we’re both down to paper thin margins and the rest is history. So I don’t recommend competing on price and when I find is company after company ends up letting price be the tie breaker. Price should never be the tie breaker but when a company cannot articulate competitive advantages clearly and loudly will differ the price, and I will always say you got to arm yourselves people with competitive advantages otherwise they’re leading with price. But soon number 1 cry of most sales people, they come back to the CEO lower the price and I can sell more.
Susan Wilson Solovic: That’s right.
Jaynie Smith: You bet.
Susan Wilson Solovic: Well Jaynie thanks a lot. This is really good information, I certainly learned a lot. I’m sure the audience has, and of course you can get more tips in your book Creating Competitive Advantage and I’m sure it’s available in bookstores, online and website.
Jaynie Smith: Yes, smartadvantage.com we have available and airport stores in lots of places.
Susan Wilson Solovic: Great, well thanks again for joining us Jaynie.
And thanks to all of you for watching us here on sbtv.com where small business is our only business.
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