Reasons Why Customers Won't Care About Amazon Sales Tax

  

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I read an interesting article in the Wall St Journal,  Amazon Faces Taxing Time Ahead.

Amazon may be losing the online retailers battle that exempted them from collecting taxes where they did not have a physical presence.  This was one of Amazons competitive advantages;   Jeff Bezos originally located his company in Seattle since it offered a smaller population of customers who would need to be taxed.

Main street merchants rebelled because they became showrooms for the online retailers and they, of course, had to charge tax.  The article cites some analysts who suggest it won’t change Amazon’s competitive advantage because Amazon’s prices will nearly be as low as Wal-Mart and 7% below Target.  The price advantage would be somewhat diminished for Amazon products.  There is speculation at this point about the overall impact of this on Amazon. However, a Stanford study of eBay customers suggested that “the higher the sales tax in a buyers home state, the more likely he or she was to avoid paying it and using a seller in a different state.”  

I think this will be interesting to follow.  There is a substantial population who has become accustomed to the “convenience” and “choice” offered by Amazon.  The extremely price sensitive shoppers may move elsewhere for pennies in difference, but I believe what Amazon offers is worth the difference to the majority of online shoppers.

Wired Magazine in January 2012 agrees:  “Why pack into Target when Amazon can speed the essentials of life to your door? ….We declare the obsolescence of ‘bricks and mortar,’ but let’s be honest:  What we usually want to avoid is the flesh and blood, the unpleasant waits…”  Wired Magazine points out that technology, ala our computers, keeps us out of crowds.  Who and how many of us value that over price?

Well I, for one, am raising my hand!  I dislike crowds, hate waiting in line, and have no interest in putting up with all that just to save some sales tax.  The convenience is worth the very slight extra cost.

This is the point many businesses don’t grasp.  It’s not about price, not always, not as often as you think, and not to as many folks as you assume.  When customers highly value attributes like convenience, speed, and ease of ordering, they are willing to pay for it.   My guess is Amazon will confirm its customers value the online buying experience sufficiently in spite of added sales tax. (How far out of your way do you go for the cheapest gas?) 

What benefit do you offer that your customers value highly?  How do you know?  

Most companies “guess” what is important to their customers and prospects; our research on over 150 companies shows the company teams are wrong an amazing 90% of the time.  This is a dangerous gamble!  As a result they either don’t know which of their differentiators are relevant, or are very poor at articulating them (or both).  So they are relegated to using price as the tiebreaker.  Find out what is truly valued, and engage in Relevant Selling.

Bringing Back Layaway: 3 Key Lessons to Learn from Retailers

  

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According to a recent article in the New York Times (“Walmart to bring back layaway for the holidays,”), Walmart is bringing back their "layaway” payment program, where customers can set aside big purchases at the back of the store and pay for them in advance, over a period of several months. This is a pretty significant sign of just how cash-strapped consumers are feeling in the present economic climate.

Layaway is a rather old-fashioned concept in retail, dating back to an earlier era in American consumerism, when credit cards were scarce and people were expected to pay cash for even big-ticket purchases like appliances. 

During the years of America’s credit boom, everyone was using credit cards and many retail analysts thought that layaway was obsolete. Walmart discontinued its layaway program back in December 2006, saying that most of its shoppers were using credit cards or gift cards when they couldn’t pay cash.

Walmart is not the first retailer to re-introduce layaway. Toys “R” Us brought back layaway on high-priced items in 2009, and Sears started offering layaway again in 2008. Instead of charging interest, layaway programs typically charge a service fee. For example, Walmart’s layaway program requires a $50 minimum purchase, a 10% down payment, and a $5 service fee. 

3 Key Lessons that Businesses can Learn from Retailers Bringing Back Layaway:

• Listen to your customers. Walmart is bringing back layaway in response to demand for customers – people wanted another option to pay for their purchases. This might sound obvious, but many companies overlook it: give your customers what they want. Listen to their feedback. When customers care enough about your company that they offer suggestions for how you can help them, that is a positive sign. Offering layaway is not a cost-free proposition for Walmart. Surely there are some costs involved with storing the layaway items and keeping track of payments. But it seems like the costs are worth paying if you can keep your customers happy. 

• Get creative with financing. Right now, there are a lot of people in America who are really struggling. Consumer behavior has changed dramatically in the past three years, especially for the segments of U.S. society that have been hardest-hit by the recession. If you sell to the middle-class/working-class consumer market, you might need to be creative about how to sell to them, or how to take payments. Depending on what you sell, could you offer your customers more flexible payment arrangements? How could you do "layaway" in your own business? This works for B2B sales as well as business-to-consumer; creative financing options are definitely in vogue in the B2B world. My consulting firm has even done flexible payment schedules for some of our clients.

• Help your customers feel "richer" than they are. Some customers who are going through hard times might be reluctant to buy items on layaway; it might feel like there is some stigma attached. There are a lot of families out there who had good jobs and disposable income 4 or 5 years ago, but who are now struggling to have any money left at the end of the month. There are millions of consumers who have gone from “trading up” for aspirational purchases to “trading down” for bargains. Perhaps Walmart and other retailers should consider rebranding layaway. Give it a new name, like “Pay in Advance,” “Advance Payment Express,” or “Smart Budget Buying.”

Choice of words matters. If retailers can make layaway sound more like something that people are choosing to do – in a proactive, energetic way – rather than something they’re being forced into because they don’t have enough money, then that might resonate with the mindset that these customers want to have about themselves. Even if they’re going through tough times, no one wants to feel “poor.” Retailers should try to make people feel good about using layaway, and make them feel smart about managing their budgets. 

Photo from ABC News

5 Business Strategies Regent Cruises Used to Increase Profitability

  

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AThriving Travel Business – In a “Down” Economy?

There’s no question about it, 2010 has been a challenging year for many businesses, particularly for those in the travel and tourism industry.  In an economic slump, the “extras” are the first things to go – fancy dinners out on the town, lavish gifts and extravagant trips. 

Despite this challenging economic environment, however, Regent Seven Seas Cruises has fared remarkably well.  In fact, 2010 has been the company’s best year ever in terms of revenue and profit. 

How did they do it?   Through competitive advantage.  By understanding their target market and taking the time to uncover their “true” advantages, Regent Seven Seas Cruises managed to catapult ahead of their competition and beat the odds in 2010.

Here are the strategies Regent used to carve out a profitable cruise niche:

1. Take Advantage of Merging
In 2008, Regent merged some of its back-of-the-house operations with Oceana Cruises.  Through this merger, Regent was able to operate more efficiently and quickly gain access to a pre-existing pool of loyal customers.

2.  Focus on Repeat Customers
This is not to say that Regent neglected their new customers, merely that they made sure their repeat customers were satisfied with their services. On average, repeat customers travel more often and purchase better packages than new customers.  With repeat customers accounting for 62% of Regent’s cruise capacity, this was more than enough to keep Regent alive and kicking despite such a challenging economic environment.

3. Treasure Travel Agents
Travel agents are one of Regent’s secret weapons since they represent a sales force that recommends cruises to their clients, as well as people they know.  As a result, Regent acknowledges travel agents are their first level of customers.

4. Know the Pulse of Your Customers
Regent listened to their customers and knew what they wanted.  For example, in their Alaska cruises, they include one-night pre-cruise hotel package in the overall package price.  They issue a credit to customers who don’t use the hotel night.  To their surprise, 70% of their cruisers took the package. Why?  Because it’s what the customers wanted. They also added healthier choices in their menu selections, as well as open-seating for meals, which offered more value to their guests.  All cruise guests seek value, which is exactly what Regent offers to them.

5. Switch to an All-Inclusive Format
The inclusiveness of their product distinguishes Regent from other cruise lines.  Despite tough economic times, there are still many people who are willing to spend money - provided they are spending on the right things.  Discounts don’t always work.  They often times create a mixed market which results in buyers always expecting to pay lower prices.  When there’s no more discount, they get disappointed and move to a different cruise line that is offering a discount.  By offering an all-inclusive product, people see real value in what they are paying for with Regent since they aren’t paying for everything a la’ carte. There are no expensive final bills to pay for at end of the cruise, which often adds up to more than the original cruise price.

Regent believes that to survive in tough economic times, it’s important to have competitive advantage.  By gaining insight as to what their target audience wanted and how they could effectively utilize their pre-existing resources, Regent serves as a thriving beacon of hope of how to survive – and thrive – in one of the biggest economic downturns in recent history.

 Source: Sun Sentinel, December 2010

Does Your Company Have Seasonal Competitive Advantages?

  

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Some businesses are seasonal – Christmas tree farms, pool maintenance (in colder weather climates), lawn care and landscaping, pest control, fireplace sellers, resorts, boat rentals, Halloween costume shops – depending on what you sell, there might be certain times of year where business is incredibly busy or completely slow.

There are also seasonal aspects to year-round businesses. FedEx and UPS and the Postal Service have to deal with shipping packages for the holiday rush. Accountants serve clients year-round, but April 15 is the biggest deadline of the year.

As part of thinking about your overall marketing strategy and evaluating your key competitive advantages, your company needs to keep in mind the “seasonal” aspects of what you do. There might be certain ways of serving customers, or certain opportunities, that only arise at certain times of year. How can you work this “seasonal” competitive advantage appeal into your marketing message?

We recently recommended to a pest control company that they change their marketing message on their website to correlate with the peak activity of certain critters. For example, there might be times of year where ants are an issue – and other times of year when termites are a bigger concern.

So an example of a competitive advantage they could use during termite season is: “In the past 5 years, 100% of our technicians responded within 24 hours to requests for a termite inspections."

Here are some other examples of “seasonal” competitive advantage statements that companies might use:

• An apple orchard: “90% of our fall crop of apples is ready to pick by October 1.”
• Companies that deliver packages during the holiday rush: “Holiday packages are delivered on time, 100% of the time – or your money back.”
• An accounting firm: “In the past 10 years, 95% of our clients’ tax returns were filed by April 15, and for the remaining 5%, 100% of their extension requests were accepted.”

Even if your company’s “seasonal” competitive advantages are common in your industry – something that “everyone does,” you should definitely still communicate it in your marketing message. Even if other orchards have ripe apples by October 1, or other pest control companies respond within 24 hours, your customers might not have heard it from them.

Sharing these competitive advantages helps to remove your customer’s perceived risk in the buying decision – it gives your prospective customers a reason to order from you, instead of your competitor. And that is always a good idea, no matter what the season may be.

Two Marketing Lessons to Learn from Burger King's Campaigns

  

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Everyone knows that McDonald’s is the world’s largest fast food chain – the Golden Arches are everywhere. Burger King is #2, but it’s nowhere near catching up with McDonald’s – and now that Burger King has been bought by a private equity firm, many industry analysts are predicting a major strategic shakeup in Burger King’s marketing.

What went wrong for "The King"?

A few years ago, Burger King was the darling of the advertising world, with attention-getting, award-winning ads from the Miami ad wizards Crispin Porter & Bogusky. Burger King was praised for its creative ads focusing on a key target market of young male “super fans” who ate at the fast food restaurant five times a week.

The recession has been bad for all kinds of businesses, but McDonald’s has thrived. In fact, Burger King should have been expected to do better during the recession, since people tend to “trade down” and spend less on their food budgets when times are tough. But instead, the opposite happened – even while McDonald’s has reaped record profits (while introducing a full suite of new products designed to appeal to a wider variety of customers, like McCafé premium coffee and fresh fruit smoothies), Burger King’s core audience of young male “super fans” has failed to keep spending.

Burger King’s marketing strategy became overly reliant on young men; and this recession has been especially tough on young men, with steep job losses in manufacturing and construction. 

Lesson #1 - Adapt Your Business with the Times

One lesson from Burger King’s woes: always be ready to adapt. The solid market or lucrative target audience that exists today could go away tomorrow. Burger King bet too heavily on a single audience – and geared its marketing to speak only to that audience. Meanwhile, McDonald’s positioned itself as a quick, convenient destination for value-priced food that also offered appealing premium items for the health-conscious, and many other demographic groups.

Lesson #2 - Stop Focusing SOOO Much on Your Creative

Another lesson from Burger King’s struggles is that it’s definitely possible to focus too much on creativity in advertising. Burger King’s plastic king masks and clever viral marketing campaigns weren’t enough to keep up with the shifting tides of the recession – most of Burger King’s ads were more effective at winning advertising awards and building “buzz” - not selling more burgers.

It’s not clear that Burger King’s highly praised advertising actually helped sales – in 2009, AdAge ran an article stating that Burger King’s market share and annual sales growth fell between 2004 and 2008 – the years when Burger King’s advertising was receiving the most critical acclaim.

In addition, Burger King's competitive advantage has not been sufficiently communicated.  As far as I know, Burger King offers the only burger that is chargrilled of the major fast food international chains. If I have to eat fast food, I choose Burger King for this reason. This competitive advantage is "sung too softly".

Burger King was good at getting attention, but not good enough at communicating competitive advantages and explaining why customers should keep choosing to buy their burgers from “the king."

Closing After a Successful Buzz Campaign: Drake University Part 2

  

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Now That you got Their Attention - Make Sure to Close the Sale

The “D+” campaign was successful in getting a lot of attention from prospective students – but now Drake University needs to take the next step - dazzling the prospective students with their competitive advantages to explain, “Why Choose Drake University?”

Here are some good examples of competitive advantage statements that a college or university might use (these are hypothetical examples that are not meant to specifically represent Drake University):

• 95% of our graduates were employed in full-time jobs or in graduate school within six months of graduation.

• Among our alumni who go on to graduate school, 80% of them were admitted into their first or second choice graduate degree program.

• Over 250 companies, government agencies and non-profit organizations attended on-campus recruitment last year to hire our graduating seniors.

• 75% of students studied abroad – in over 50 countries.

• 80% of students completed a paid internship during their college career – in 50 U.S. cities and 10 international locations.

• 10 years after graduation, our alumni earned a median annual income that is 50% higher than the national average for all college graduates.

Was Drake University Able to Enroll the Prospective Students?

In another few months, I would be curious to hear about whether or not the Drake University admissions team reaches their enrollment goals for the next academic year – getting foot traffic past the door of your business (or on your college campus) is one thing, but it takes a further level of connection to close the deal and make the sale (or enrollment in the case of Drake).

Once you have the attention of your target market, it is imperative to sell them on your services by communicating your competitive advantages.

Building buzz is great. But actually taking that attention and converting it into sales is what separates the leaders from the ones left behind.

So this begs the question - How many advertisements or marketing campaigns have caught your eye, but failed to convince you to buy their product or service?

Read Part 1 of Drake University's Story

Build a Moat Around Your Business with Your Competitive Advantage

  

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The best businesses to be in are the ones with high barriers to entry.

Think about it – why do doctors and lawyers and dentists earn so much money? Because there are barriers to entry – medical school, the bar exam, dental school – keeping people from getting into these professions. That keeps the supply scarce – we can’t all be doctors and dentists and lawyers.

Professional qualifications are one type of barrier to entry. But have you considered that your business might be able to create its own barrier to entry – that is built on your company’s competitive advantage?

If your company truly understands its competitive advantage, you can “build a moat” around your business – you will establish such a lead over your competition that no one else will be able to beat you in your market. Competitive advantage creates scarcity in your market; just as “not everyone can be a dentist,” if “not everyone” in your market can do what you do, that makes your company even more valuable.

Just as “the only dentist in town” can earn a great living because of the barriers to entry keeping people out, your company can become “the only” one in your market – if you understand and embrace your competitive advantage, and become widely respected and recognized as “the best” at what you do.

For example, if your company can offer the following results, you might have a significant competitive advantage to share with your customers:

• Guaranteed on-time delivery. Can you be more reliable than anyone else – and are you prepared to bet money on it?
• Same-day service. Can you be faster than anyone else in your market? 
• 99% success rate. Can you be more accurate than anyone else in your market?
• 24/7 on-call service. Are you able to go the extra mile to be available when your customers need you?
• The “wow” factor. Is your product or service so much better than anyone else that your customers feel compelled to talk about it with others? Do you get a lot of word-of-mouth business and referrals? If so, you’re doing something right – and you have a significant competitive advantage.

Internal Competitive Advantages

In addition to these “external” competitive advantages, there are also “internal” competitive advantages. These take a long time to develop, but they are often the best way to build a “wide moat” around your company.

For example, Walmart is a wide-moat company – no one is ever likely to beat Walmart at low-price, mass-market retail. Walmart’s biggest competitive advantages are internal – it’s sheer size, its logistics, its buying power. Customers at Walmart don’t see Walmart’s elaborate network of warehouses and its skill at distributing the right products to the right places at the right time; but they benefit from it in terms of lower prices.

Similarly, Coca-Cola has an almost insurmountable lead in the beverage industry because of its worldwide distribution – almost anywhere in the world, you can buy a Coke. Coke is able to enjoy this competitive advantage because of its internal capabilities – its powerful distribution networks and its canny marketing ability to find and capitalize on new markets for growth (such as China).

Smart Advantage helps companies who are not (yet) the Cokes and Walmarts of the world to uncover their true competitive advantages. You might not have a universally recognized brand (like Coke) or massive scale to bargain with your suppliers (like Walmart), but we can use market research and strategic insights to uncover what it is that makes your business competitive in your market.

Some companies are able to pinpoint their own competitive advantages internally, but it is more often the case that companies don’t know their own strengths – it takes an outside observer to help them identify their true competitive advantages.

3 Biggest Reasons Why Companies Lose Their Competitive Advantage

  

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Competitive advantages are not permanent. You need to continually adjust, adapt and evolve your competitive advantages and positioning to respond to changes in customer preference, challenges from competitors, and changes within the company itself.

3 Biggest Reasons Why Companies Lose Their Competitive Advantage - and What to do to Fix it.

1) Changes in Customer Preference

Too many companies don’t do a good enough job of connecting with or listening to their customers. Your customers might be drifting away from you, and you might not realize it until it’s too late. After all, most customers don’t announce their plans – even if you’re in a relationship business like hairstyling, consulting or sales; your customers might decide to switch to a competitor even though everything seemed fine to you.

How to keep your competitive advantage: Focus on your customers. Conduct double-blind market research to find out what truly matters to your customers about the product or service you provide – make sure you understand what your customers value. What are the “pain points” and problem areas? Is there anything that your customers would like to see you do differently? Is there anything that your competitors are doing that might tempt your customers to switch? Also, make sure your customer research stays up-to-date with the market conditions – people’s buying decisions were different during 2006 (at the peak of the housing bubble) than they were in February 2009 (after the stock market and real estate crash).

2) Challenges From Competitors

10 years ago, Blockbuster Video was one of America’s favorite sources of weekend entertainment – “make it a Blockbuster night!” That was back before Netflix upended the video rental market with their mail order service – no more late fees, which wrecked Blockbuster’s business model. Today, Blockbuster is on the brink of bankruptcy, and Red Box rental kiosks, video on demand and online streaming video are putting the final nails in the coffin. No competitive advantage is safe for long; often, just when a company figures out its competitive advantage, a competitor swoops in to change the game. Technological improvements, new marketing strategies, new ways of identifying underserved niches within the existing market – all of these are ways that competitors are constantly dueling to undermine each other’s competitive advantages.  

How to keep your competitive advantage: Focus on what you do best – better than any of your new (and current) competitors. Blockbuster made a few strategic miscues over the years, but now they are focused on promoting their stores as the best place to get the largest selection of new release videos. Time will tell if that will be enough to keep Blockbuster from going bust, but it’s a start. Every company, no matter what size, industry or financial position, needs to take the time to uncover what truly makes them unique from their competitors – because even the biggest companies can crumble under the competition if they don't keep up.

3) Internal Changes

Sometimes companies themselves are the ones who cause their competitive advantages to go away. It can be something as straightforward as new ownership or a new CEO who changes the focus or direction of the company, or it can be more subtle and slow, like a company culture that shifts from a service-oriented, idealistic start-up to a larger, richer, more complacent established firm. Companies change in ways that are often imperceptible, and this influences their competitive advantages as well.

How to keep your competitive advantage: No matter what internal changes happen to a company, continuing to conduct market research is one of the best ways to weather the changes. If a company decides to pursue a new target market, or if new company leadership wants to completely change the focus of the company, then the leaders need to ensure that those changes are supported by market research. This is an important way to ensure that your consumers and target market value the things you are selling. Don’t make a shift unless you know the shift is something your consumers will value.

Wrap Up

Change is inevitable, and the business world is changing faster than ever. Technology keeps getting cheaper and faster; the world is becoming ever more interconnected, and new ideas can disrupt your industry at any time. You need to stay vigilant to keep your company ahead of the curve. Staying with what worked in the past doesn’t cut it anymore, especially if you are seeing a drop in sales.

One of the main answers to this problem is research!  Market research can help you understand what your company does better than anyone else, and will give you key insights into what your customers value most when they’re making a buying decision.

Interested in seeing if you company is effectively communicating its competitive advantages?  Take a FREE Competitive Advantage Quiz to find out!

3 Methods to Replace Overused Clichés in Your Marketing Message

  

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Let’s look at some of the biggest and most overused clichés in  marketing: “quality, value and service.”

These are used far too often in marketing messages for all kinds of companies. It gets to the point where the messages and even the words themselves can become interchangeable.

The next three marketing taglines are just ones I made up on the spot, and I’m trying to be humorous here, but these aren’t too far removed from reality:

• “Because we value our customers, we provide quality service.”
• “If you want quality value, rely on the service you can trust.”
• “Service quality leads to value – and that’s something you can count on!”

What do companies really mean when they use these words? Is it just lazy copywriting, or do these companies truly believe what they say?

Because when I see an ad – or a website, or a slogan, or any kind of marketing message – that uses words like “quality, value and service,” I see a missed opportunity.

How to Create Unique and Effective Content for your Next Marketing Campaign

Customers have been bombarded for so long with “quality, value and service” that these words have lost all meaning. If you want to really convey a message that shows these characteristics, you need to go deeper into your unique competitive advantage – what is it about your company that truly is “quality”?

Every company needs to look for ways to get past each of these three clichés to “go deeper” and create a “real” marketing message grounded in their actual competitive advantage.

You can talk about quality without using the word “quality,” you can talk about your service without using the word “service,” and you can demonstrate your value without using the lazy shortcut of saying “value.”

For example:

• Quality: What exactly is it about your products or services that is such high quality? Instead of using the generic word “quality,” get specific: talk about how your artisanal cheeses are made from traditional hand crafting techniques, on a farm that’s been in the family for three generations. Talk about how your new IT solution has a 99% error-free rate. Talk about how your dental practice has retained 100% of its clients for the past five years.

• Value: What exactly is it about your product or service that delivers value to your customers? Again – get specific. Are you able to deliver value-added services that justify your higher price? Are you able to be faster or more responsive than the competition? Can you offer any guarantees? And with the “value” conversation, it helps to understand exactly what it is that your customers value about your product. This is one of the biggest disconnects between companies and their customers – when companies don’t know what their customers truly value.

• Service: How would your best customers – your biggest fans – describe your service? Would they use generic terms like, “Bob’s Web Design has great service!” Or would they say, “Bob’s Web Design has always been there when I needed them, they’re fast, responsive and ready to work on short notice. They’ve always gotten the job done with time to spare and they have 24/7 emergency on-call service.” Again – be specific. Paint a picture of how exactly you serve your customers. What can you deliver or guarantee that makes your company unique?

So don’t be afraid to talk about “quality, value and service.” But do it in such a way that it’s grounded in the specifics of your business and reflects the competitive advantage of your company. This is what you can do to really anchor your company in the minds of your customers – and avoid being ignored, like so many companies talking about “quality, value and service.”

Want to see if you are communicating your Competitive Advantages? Take our FREE Competitive Advantage Quiz

What business are you “really” in? Define your Competitive Advantage.

  

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When trying to create competitive advantage, many companies fall into a familiar trap – they allow themselves to be defined by the limitations and assumptions of “the business that they’re in.”

For example, consider the soft drink industry – Coca-Cola, Pepsi and other smaller regional brands. This industry is faced with growing media scrutiny and public concern about the health effects of high fructose corn syrup, the main sweetener in most soft drinks. In response, some of these companies are reacting defensively – and in the process, they’re painting themselves into a corner because they’re making the conversation about defending corn syrup instead of making the conversation about their products, their brand, and their unique competitive positioning.

In one of Seth Godin’s recent blog posts, he makes the case that the soft drink industry should realize that they’re not really in the “corn syrup delivery” business, they’re in the business of “delivering joy in a bottle.” Instead of playing by someone else’s script (“big soft drink companies defending the status quo”), there’s an opportunity here for soft drink companies to write a new script – and talk about their unique packaging, their unique product offerings, their unique customer experience that brings joy to people all over the world.

And there’s the famous quote from Steve Jobs back in the mid-1980s that Apple was not in the business of building “computers,” they were building “bicycles for the mind.” At the time, this was a revolutionary concept – after all, most computers at the time were big bulky mainframes, crunching numbers and running spreadsheets – “business machines.” When Steve Jobs first started talking about computers as “bicycles for the mind,” the average computer looked more like a tank than a bicycle.

But today, computers are much more nimble, more elegant, and more focused on getting people where they want to go with sleekness and aesthetic appeal – and Steve Jobs and Apple have been the biggest drivers behind this. Talk about a competitive advantage!

Maybe that’s where Apple’s real competitive advantage comes from – not just innovative designs and stylish marketing and well-engineered user interfaces, but from their unique and deeply rooted understanding of what business they’re really in.

Sometimes the best way to find your competitive advantage is to completely redefine the terms of what business you’re in. You need to rethink not just your own company’s competitive advantage, but the innate purpose and bigger significance behind your entire industry.

How does this apply to your business?

• If you run a bookstore, maybe you realize that you’re not really in the business of selling books, you’re in the business of creating a community of like-minded book lovers.
• If you run an IT consulting business, maybe you realize that you’re not really in the business of technology, you’re in the business of alleviating people’s stress and anxiety about technology.
• If you run a car wash, maybe you realize that you’re not really in the business of soaping and rinsing cars, you’re in the business of making cars more beautiful (and making their drivers feel better about themselves). 

No matter what business you’re in, there are ways to re-think your strategies so that you don’t get boxed in by the limitations of “the business you’re in.” Think bigger. Think loftier. Are you building “business machines,” or “bicycles for the mind?”