Competitive advantage is a condition or circumstance that puts a company (or association) in a favorable or superior business position. In her book Creating Competitive Advantage, Jaynie Smith writes, “It answers the customer’s key question: Why should I do business with you? What are you offering that the other guy doesn’t?” This is a question that all associations must answer—and one most don’t spend enough time on.
Smith also writes, “For most companies, large or small, a competitive advantage is rarely unique and not often sustainable over an extended period of time.” (Italics mine.) In other words, if you’re still promoting benefits identified in a different time period or market, you may be competing with less important or irrelevant offerings. And if you are, that’s a competitive disadvantage. An excellent example of this is Southwest airlines, which recently announced it will discontinue open seating—a hallmark of the airline for more than 50 years. (It’s keeping its “bags fly free” differentiator, however.)
When I ask association professionals to identify their biggest challenges, articulating a strong value proposition for their association is usually among them. Why? Because developing a succinct, memorable and meaningful value statement takes a lot of work and many don’t know how to do it. But the dividends are worth it. When Jaynie Smith worked with the Visiting Nurses Association of Florida to identify its competitive advantages, the organization broke records by increasing its revenues 40 percent within months.
A strong competitive advantage isn’t just about revenue, however. (But who doesn’t like that?) It makes member recruitment and retention easier and raises member satisfaction. Together, these strengthen associations and create sustainability.
Here’s what you need to know about competitive advantage:
- To differentiate your organization, you have to identify and understand who is competing with you for your members’ time, attention, money and engagement.
- If you have different member segments (i.e. varying career stages, affiliates or both individual and company members), you’ll need a competitive advantage(s) tailored to each segment.
- Value is what your members say it is; not simply what staff thinks it is. The strongest competitive advantages come from deep listening and reflect what you’ve heard from your members. (In regard to open seating, Southwest Airlines’ research showed that 80% of its customers and 86% of potential customers prefer an assigned seat. Of course, the potential for more profit but charging for premium seats was also a driving factor.)
- Identifying your competitive advantage takes work and since it is not sustainable forever (as noted above), it has to be regularly checked and reworked as changes happen in your market or sphere of influence.
How do you create and communicate a competitive advantage? Melynn Sight offers seven steps in her book, Breakthrough Value: Discover Your One-Of-A-Kind Value Proposition:
- Brainstorm, then target your audience.
- Listen to their words and prioritize their needs.
- Link their needs with your expertise.
- Compose your proof points and draft your theme.
- Complement your words with graphics.
- Develop your launch plan.
- Launch.
Though I don’t think you should circumvent the work above, here are key questions that will help you identify your competitive advantage(s):
- How do you help members work less stressfully, more profitably and more productively?
- What do you do for members that they can’t do for themselves?
- What problem(s) do you help members solve?
If you can’t answer the above questions, you likely have a weak (or non-existent) advantage. And if you are able to answer these questions, how can you communicate the answers in a succinct and memorable way? Having a strong competitive advantage is one thing. Being able to communicate it quickly and powerfully is another.
When faced with a membership plateau, the Texas Nurse Practitioners (TNP) recognized that enhancing their marketing and communications alone wouldn’t address a weak value proposition. They needed to improve their competitive differentiation as well. Aided by Elizabeth Bailey of 2B Communications & Strategy Group, the organization started by digging deeper into member data and research, understanding the competitive landscape and figuring out where it had opportunities to position itself uniquely among Texas nurse practitioners. From there, they built a multi-pronged approach.
The result of TNP’s work is noteworthy. Registrations for the annual conference increased more than 25% (with 40% being first-time attendees) and membership increased nearly 5% overall, proving the essential role data and competitive intelligence play in strengthening member value propositions and creating compelling brand positioning. According to Emily Eastin, TNP CEO, “The insights we gained into our competitive advantages and what drives members to join and stay have led to significant bottom-line results and we are surpassing our previous membership levels. The process has energized our board and staff and created momentum that is having a positive impact across our organization.”
This mirrors Jaynie Smith’s assertions that “if you properly identify and exploit your competitive advantage, it will impact your bottom line early and often.”
According to Smith, “…no matter the size of your company or the kind of business you are in, your competitive advantages should be the foundation of all your strategic and operations decisions. Ignoring them can be an expensive and even fatal mistake. And who wants that?
What’s your competitive advantage? How is it reflected in your value proposition? If you can’t answer these questions, you’ve got some work to do! It will take time, effort and money. But as the Texas Nurse Practitioners discovered, the results will be worth it.