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New Store Must have Compelling Advantage

January 02, 2012

What would compel your target market or potential customers to stop purchasing from your competitors and start purchasing from you?

By: Dave Erickson, ASU-SBDC Director and CBA IV 


SAN ANGELO, Texas — When starting a business, one of the many questions for the entrepreneur to answer is a basic one. What would compel your target market or potential customers to stop purchasing from your competitors and start purchasing from you?

This is a basic question indeed. But one that is not always easy for an entrepreneur to answer. I know from assisting many people with business startups, having a good answer to the question is a key success factor for the survivability of a new business.

What is meant by a compelling reason? A compelling reason means the same as having a competitive advantage or advantages. Another way to explain it is having a differentiation, or a difference, from your competitors that is important to your customers.

In today’s world, most customers have choices of where to buy certain goods and services. In many cases they have numerous choices. In order for customers to seek your business instead of your competitors, you must give them good reasons to do so. They must be persuaded to do so, or it is not worth their time to even consider your business.

An example would be an entrepreneur who opens a new business supplying a product line in a town that is saturated with like businesses offering the same product line, and he or she plans no compelling difference from these competitors but decides just to open and see what happens. In my view the venture is destined to eventually fail. Customers might try it initially but would find no compelling reason to come back. They just have too many choices.

What are compelling reasons? Compelling reasons can come in many forms and depend on the type of business. Excellent location, excellent service, quality products, innovative products, exclusivity of products or service, overall value or a need not currently offered in the market are all examples of compelling reasons. There are others of course. It is important to remember the compelling reasons must be important to your target market, which are customers most likely to do business with you. Most successful businesses consider only certain groups of people as their core customers. “Everyone” is not a target market.

It also is important to remember the reasons must be sustainable over time. Hit-or-miss, inconsistently managed compelling reasons are not reasons for customers to change their buying habits.

When you are considering opening a business, consider the compelling reasons customers would stop doing business with your competitors and do business with you. Are they important reasons to this group? Can you consistently maintain them? Answering this basic question will help you have a sustainable and viable new business.

“Business Tips” was written by Dave Erickson, director and certified business adviser IV of Angelo State University’s Small Business Development Center. Contact him

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