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Small Business Development Center
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‘Raving fans’ are good for business

June 12, 2012

To compete for customer’s dollars you need to focus on your competitive advantage. James Leavelle, ASU-SBDC Advisor, shares advice on how to stand out from the pack.

SAN ANGELO, Texas — Unless your business is in a monopolistic market, you are in competition with other businesses for your customers’ dollars.

Each of you is vying to be the favored one where the customer will choose to spend his hard-earned money. Various strategies are employed by you and each of your competitors.

What is your (and your competitors’) ultimate goal? The answer is obvious: to gain competitive advantage. It is to be the choice of your customers.

What strategies are you using to gain competitive advantage? Are you offering products not available to competitors through agreement with your vendor(s)? This is fairly common practice in local and regional markets and can be successful if it is a product or service in high demand. It can be especially successful when the product can’t be replaced by a comparable product from a different manufacturer or provider.

Are you trying to gain competitive advantage through an aggressive pricing strategy? This can be dangerous, especially in the absence of a good marketbasket of products or services. Poorly structured pricing strategies can hurt profit margins and the sustainability of the business. Effective strategies offer good value to the customer while protecting margins.

If you are fortunate, you are operating in a niche market where there is limited if any direct competition. It is very likely you are the first in the market with your product or service and thus are not experiencing the effects of direct competition. The danger here is in letting your guard down and being unprepared when a competitor appears.

When it comes to competitive advantage, how’s your customer service? Do you have satisfied customers? Guess what. More than likely, your competitors do too! So how can customer service be used to create competitive advantage? According to Kenneth Blanchard and Sheldon M. Boles, you turn them into “raving fans!” Think about it. Would you rather have a satisfied customer or a raving fan?

Blanchard and Boles have written a book, “Raving Fans,” that is easy to read, and is an entertaining story about how a manager learns to turn his department around through providing exceptional customer service. The book discusses several examples of exceptional customer service that have turned customers into raving fans.

What is the difference between a satisfied customer and a raving fan? Nearly every business has satisfied customers, but how many have raving fans? If every business has satisfied customers, where is the competitive advantage? It’s in the details.

To borrow an example from Blanchard and Boles, imagine going to a grocery store that offered a sort of concierge service where you hand them your shopping list when you enter the store. The staff enters your list into their computer and out prints a revised list that puts your list in the order that you will find the products as you walk the store. Additionally, the new list indicated items and brands that are on sale and/or indicates healthy choices. Oh, and by the way, this would be a free service to the customer.

It’s that one or two extra little details that can turn a satisfied customer into a raving fan and give you the competitive advantage.

“Business Tips” was written by James Leavelle, Business Development Specialist of Angelo State University’s Small Business Development Center. Contact him atJames.Leavelle@angelo.edu.

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    James Leavelle, ASU-SBDC Business Development Specialist

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ASU Small Business Development Center
San Angelo, TX
Phone: (325) 942-2019
E-mail: sbdc@angelo.edu