Business Tip Vol. 2 - Core Competencies

Last week, I posted some thoughts about your company's core competencies.

If you would place your business in only one of these three categories, which would it be.

1) Low cost provider
2) Product or service innovator
3) Exceptional service provider

Most small business owners make the mistake of attempting to straddle between low cost provider and exceptional service provider, mainly because they maintain a low overhead operation. Big mistake.

I would offer that almost any small business needs to position themselves as the exceptional customer service provider. Most small businesses don't have the economies of scale to compete with larger competitors.

As a result, don't give away pricing and provide the quality service the extra pricing pays for. Listen to customers in the market place, most of their complaints are usually focused on the vendor becoming a problem for the customer to manage, not the other way around.

The fact that you may maintain a low overhead operation allows you the resources to offer a higher quality product and service.

The other reason you don't want to position your self as the low cost provider is that the market place will never allow you to be anything but the low cost provider. Just look at a company like Walmart, who attempted to offer high quality more expensive merchandise... it was a complete flop.

Next week, I'll address the other pitfalls of being the low cost provider.