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What’s your competitive advantage? The one thing that makes you unique, special, and successful. This is one question to answer out of the box! Watch today’s video tip to learn more about what I mean by this.
To learn more please either watch the video above, read the transcript or listen to the podcast below.
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Read the Video Transcript by Clicking Here...
What’s your competitive advantage? Don’t tell me ‘we serve great food’ or ‘great prices’ or ‘great food at great prices’. If that’s your answer then you’re going to go out of business. Why? Because you can’t serve great food at great prices. You can serve great food, but you have to charge for it otherwise you’re not going to make any money. That being said, you can serve at great prices and be very competitive, but that’s a very different game.
The people who like to play the game of “we serve the best quality food at such great prices”, you’re either not making enough money because you’re not charging enough or you’re not serving as good of a food as you think you are serving.
What do I mean by competitive advantage? Let’s talk about In-N-Out Burger. They serve four things: hamburgers, french fries, sodas and milkshakes, but they mainly serve hamburgers. They don’t even offer bacon on their hamburgers – it is such a simple menu. Because of that simple menu they’re able to be very efficient.
When talking to my customers, I like to use this example. Me: “Do you think you can make a better hamburger than In-N-Out?” Them (always): “Yeah we do all of the time, our burgers are way better than In-N-Out!” Me: “So why doesn’t anyone compete with In-N-Out? Why don’t you and I go out and open up a restaurant if we serve better if we can make a better hamburger than them, let’s go do it!”
The truth is, no one has been able to compete with In-N-Out. The numbers they generate are insane compared to other burger restaurants. The reason they have almost no competition is that it’s not just the burger that In-N-Out sells and the price they sell it for, it is the fact that they can do what they do, at the prices they have, and still make money. We could serve a better burger than In-N-Out, but we couldn’t do it with the same quality of their location, quality of staff, the build-out, speed of service, and the freshness of the food and still make money. Perhaps we could charge a dollar more and maybe make money, but why is someone going to pay $1 more when they could go to In-N-Out for a dollar less and get the same thing?
There are two major takeaways here:
1)What is your competitive advantage?
2)Why are people going to eat at your restaurant and why is it going to be harder and for competition to come into your world?
You’ve got to think about that what your competitive advantage is…do you have a process for doing something that no one else has figured? Is it efficiency, quality or creativity?
I have a client whose competitive advantage is simply creativity. Everybody copies what he does, but he’s always one year ahead of them. He comes up with something, runs it for six or seven months, then someone copies it, and then he comes up with something new. It’s a great circle…everyone’s copying him and he’s always innovating. He doesn’t care that they copy him, and that’s great. He’s always innovating and that’s his competitive advantage – what’s yours?
I have more things to talk about on this subject, but this video is already going long so I think next week I’m going to do a follow-up and give you another example that might help clarify a little more about competitive advantage. Have a wonderful day and see you next week!
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