We tend to think that our competitive advantages are based on our products’ performance, or our low costs of production. Of course, these are important to your bottom line. But they are not your biggest competitive advantage. Your most powerful competitive advantage is knowledge of your customers.

Consider what might happen if you know more about your customer than your competitor knows:

  • You will know what your customer cares about
  • You will be able to customize your product or service for your customer
  • You will be able to personalize your communication with your customer
  • You will be able to address any problems or disappointments your customer has

And, if you have more knowledge of your customers than your competitors do, you will be able to customize, personalize and address issues much better than your competitors can. On top of that, if you ensure your customer recognizes that you know them really well, your customer will appreciate you more than the competition. I call this the Differentiation Paradox: customers often think we are different not because we are different, but because we recognize what makes them different.

Focus on Differentiating Your Customers

Most marketing and sales theory doesn’t approach customers in this way. We talk about target markets and demographics, which, instead of recognizing what makes each customer unique, is a way of grouping customers by what makes them similar. We talk about product positioning and unique selling propositions, which is all about your products and services and not at all about your customer. It’s time to flip your thinking and focus on differentiating your customers.

It’s certainly easier to write one ad aimed at “males 18-34 who like to watch sports and drink beer” than it is to write an individual ad for each of those individuals. This kind of customer grouping is necessary for mass communication, but it creates an undeniable compromise: every time you try to say the same thing to more than one person at a time, you are inevitably diluting the relevance of that message to an individual person.

If advertising or other mass communications were the only marketing and sales tools your company could use, then you would be stuck with this compromise. But most of us aren’t stuck like this; we have many opportunities for one-on-one communication. When you’re speaking with a customer one-on-one, don’t look for what makes all of your customers the same. Look for what makes each customer different. Whatever your job role or level, you can champion the idea of embracing customer uniqueness.

Do You Hold the Competitive Advantage?

Now it’s time to look at your company and ask yourself: do we know a lot about our customers? Is understanding our customers a priority in our company? Do we have good mechanisms for gathering customer knowledge? Do we do a good job of showing our customers that we recognize what makes them unique?

If your answers to these questions are “no,” you are missing out on a powerful competitive advantage. Here’s what you can do to unleash the potential of customer knowledge:

  • Create a culture of customer curiosity in your company: imagine if your entire team had desire and interest in knowing as much about each of your customers as possible
  • Connect with your customers: if you really want to know what your customers care about, you need to engage in deep conversations that matter to your customers where you spend more time listening and asking questions than talking about your products and services
  • Observe your customers’ behavior: you can learn a lot by watching how your customers act. When do they buy from you and how often? When do they contact you and what do they say? What do they care about and what motivates their decision making?

Your customers care much more about themselves than they care about you. The best way to motivate committed customers and develop your competitive advantage is to focus on learning about and differentiating your customers.

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