Tech as a Competitive Advantage
Follow Yesler for the latest on the LBM industry
Is it just me or does it feel like it’s all about ‘buzz-words’ and ‘game-changers’ these days? With AI on everyone’s mind, the tech band-wagon is rolling fast and furious right now, movie reference fully intended, by the way. Don’t get me wrong … I love it. I’m a software guy, and I get to nerd-out on this stuff as part of my job. But what I really like is taking a step back and digging into how all these cool new innovations help ‘the customer’. Being a ‘disruptor’ is great in any business, but introducing tech for the sake of tech gets you nothing. Change has to come with benefits for the customer, otherwise the juice isn’t worth the squeeze.
So what does the tech get you and your customer?
There are the usual benefits to be had like some cost savings via automation, which means you can be more competitive on price. Score! Maybe you can increase your output as well? Got to be some economies of scale there. Streamline distribution and ace your supply-chain. Huge. All a win for you, the CEO thinks you are Mark Cuban and maybe there is even a win for the customer if it gets them a cheaper product. That’s assuming it’s all about price. But let’s face it, it isn’t always about price, is it?
Competing on price usually means a race to zero, which isn’t good for anyone. And the reason it’s a race to zero is because price is the easiest thing to copy and ‘compete’ on. How many times has someone asked you to match a price and you’ve done it? The chances are, if you are circling the drain with low pricing, then the rest of the ‘experience’ you are providing your customers might also be immersed in those equally murky waters. Believe it or not, that’s not always what the customer wants.
Aim to compete on things that are harder to copy. They will differentiate you, will ultimately deliver more value to your customers and will make you stickier as a supplier.
Where to start?
Have you ever asked yourself how easy (or difficult) you are to do business with? How about starting there! After all – this is what your customers experience every day. A few things to think about:
- Empathy is the cornerstone of delivering an excellent experience to your customers. Take the same journey they do when they interact with you. If it’s a goat-rodeo of multiple processes and communication channels, you might not be as slick as you think you are.
- Be willing to throw out the baby and the bathwater. If you don’t think it’s broken, then break it. Familiarity and entrenched legacy processes aren’t good things. Innovate and drive change to benefit the customer.
- Think about ‘marginal gains’. This doesn’t require a ‘Big-Bang’ approach. Look for many small changes that will deliver a big impact. This will reduce the likelihood of sticker shock and make the journey to change easier for those who might be less comfortable with it. Showing small wins along the way will also make it easier to get folks to buy into something new.
So, in a business that is so relationship driven, how does all this work? “I want it to be easier to do business with me, but I don’t want to force my customers to do something they aren’t ready for.” Great point. Let’s go back to delivering things that are difficult to copy and leveraging these as a competitive advantage.
How about you bring your customer on the journey with you. That way you are a partner. You are doing this together. You are a teacher and a trusted advisor at the same time. Technology is a force multiplier here, enhancing the relationship you have with your customers. Still not convinced? Think about if you’d rather be the one to take them on this journey or give someone else the opportunity to do it. Yup … thought so 😉