Make It Business Magazine | Inspiring Small Business & Entreprenuers To Think Big

How to: Keep and sustain a competitive advantage

Michael Walsh - Business Coach Columnist

How do you build a sustainable competitive advantage for your company? With so much changing these days, where does your product have to be? How about your service levels? What about your relationships?

In order to build and maintain a sustainable, competitive advantage, you need to have competitive products (i.e., as good as your competition); superior service (better than your competitors); and killer relationships (i.e., to die for).

Many people try to build an advantage by having superior, a.k.a. killer, products. Any advantage gained here will not be sustainable. Hard products (i.e., goods) are most susceptible to reverse engineering and replication, quite often at a lower price. This is the most competitive category, and as a result, most price-sensitive as well. Given there are 6 billion people out there, it is very difficult to stop others from taking your products and improving on them, and usually for a cheaper price. Reverse engineering is very common these days. To maintain a competitive sustainable advantage at this level is nearly impossible.

Services are a little easier to maintain as an advantage over competitors. They are more intangible, and therefore less price-sensitive. As a result, you might be funded better with services, and you will be able to deliver services that are superior to your competitors. To go killer in this area, however, is just too expensive to provide in a cost-effective manner. There are financial parameters and constraints to the services you may provide. Additional service costs money. As a result, a sustainable competitive advantage does not lie in this area alone.

Here we are at last! The area that doesn’t cost a fortune, and that generates big rewards for those who use it. You care, and you need and want to demonstrate this care to your customers.

You can do this through your relationships with them. A relationship, developing that human connection with another person, is most cost-effective, and paradoxically yields the highest results. The more that can be done in the area of relationship-building, the better. Think about it. How many places do you shop right now that aren’t necessarily the cheapest, but you go back anyway? It’s all because of your good relationship with the people there.

People aren’t interested in how much you know until they know how much you care. The impact of relationships on competitive advantage is amazing. We have heard many stories of people going out of their way, including one person actually driving over 100 miles to get his car serviced with a particular company, because “the people really care.”

In this case, the owner of a Mercedes dealership (near where the customer used to live) had heard about the life-threatening illness of a customer’s nine-year-old boy, a kid who happened to love hockey. The dealership owner made arrangements for the child and his dad to attend an NHL hockey game, where the son was also acknowledged by the team (complete with a hockey stick autographed by all the players). That special night and the stick made a significant impact. They were tokens of hope for the boy as he went through numerous difficult surgeries.

The cost to the owner of the dealership was a pair of his season tickets and a phone call to a friend. The impact on the boy and his dad was priceless, and now, after moving, the dad will never consider having his car serviced anywhere else, even though there is another Mercedes dealership in his new town.

The advantage of superior or killer products may be anywhere from six months to two years, but after that it is gone. Due to market forces – hungry competitors willing to offer the same for less – the advantage gained will become unsustainable from a cost point of view.

Killer relationships, on the other hand, are the basis of true sustainable competitive advantage. With these, anything is possible. By understanding the importance of relationships in business, you will be able to gain and keep more customers at a profit, consistent with your goals and commitments in life.

Michael Walsh, founder and president of Kaizen Consulting, a Vancouver-based company with offices in Canada and the USA, has been helping small business owners achieve business growth since 1995. In that time, Michael has helped more than 200 business owners reach their personal goals by doubling, tripling and quadrupling their revenues. Kaizen Consulting can be reached at or Our extensive genealogical research has found that Michael, though blessed with the same name, is not related to Fiona Walsh.

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