Quick: How do you explain your business in a social situation?
Do you define yourself by your industry? For example, “I own a printing company.”
Or do you describe what makes your business unique? For example: “We’ve developed a process for printing annual reports that reduces the turnaround time to three days.”
The problem with describing yourself as a part of an industry is that most industries are commoditized. You’re sentencing yourself to a life of low margins and grovelling for work.
When there is nothing unique about your business, the customer has no choice but to rely on price as the only decision-making criterion.
Before you claim “customer service” is what makes you unique, remember that people don’t buy wishy-washy claims as a point of differentiation.
After all, service is in the eye of the beholder, and until your prospect makes the decision to become a customer, intangible claims about how well you treat your customers – offering great customer service since 1977 or specializing in great customer service – will not sway them.
Instead of describing your business in terms of the industry you’re in, accompanied by some vague description of your service, describe in concrete terms what makes your business different.
For example, under chief executive officer Tony Hsieh, Zappos.com became a successful company not because it is a shoe retailer but because it offers a two-way free shipping policy.
One-way free shipping is standard for a lot of e-tailers. Zappos also offers to ship your shoes for free. But then, if you don’t like them, it will not only refund your money but also pay to pick the shoes up.
“Great customer service” is a wishy-washy claim. “Free returns” makes Zappos special and is a big part of what sets it apart.
A shoe retailer is a boring commoditized business with low margins and very little hope of being acquired.
A company that allows people to return shoes if they don’t like them, all from the comfort of their own home, is unique, and that policy is a big part of the formula that allowed Zappos to scale up into a sellable business. Indeed, it was acquired by Amazon in 2009.
Take a lesson from this: Start describing what makes you irresistible.
Special to The Globe and Mail
John Warrillow is a writer, speaker and angel investor in a number of start-up companies. He is the author of Built To Sell: Creating a Business That Can Thrive Without You, which will be released in April.