Differentiate Your Company Or Else…

If you have kept up with any of the popular business books such as The World is Flat or A Whole New Mind, you will have heard about how technology has made more and more services susceptible to outsourcing. The ability to communicate and share information with people in real time, regardless of their location, leverages cost advantages and makes the world more competitive every day.  Outside of certain services that require a physical presence, such as plumbing or auto repair, more and more work will be sourced on a global basis.  For example, some large law firms are now outsourcing legal research for American clients to India.  As technology improves, global competition will continue to increase.

How to Compete

There are ways to compete, however.  For one, people still like to do business with people they know and like.  While a good customer relationship might not allow you to overcome a 75% price differential, it could be enough to allow you to charge a 25% premium.  To do this, you must be in regular contact with your customers and prospects.  Each interaction should provide a value-added benefit.  It is important to note, however, that benefits are not always related to the “bottom line.”  It is important to take time to nurture relationships, including simply getting to know somebody.  You should not always be in a hurry to get to business, assuming your contact has time to talk.  Be sure to tell them something about yourself that you might have in common.  And definitely look for opportunities to open conversations based on cues your customer is giving you.  You will be amazed at how far building a foundation will take you

Another thing you will need to focus on is the product or service you are offering.  With high-paying technical jobs that were plentiful in the 1990s and early 2000s being outsourced in greater numbers, you will need to think about keeping your offering out of the commodity category.  There is not enough time in a day to build profitable, great relationships in commodity markets.  You would simply starve to death.  To be successful you will need to continually look for ways to make your service unique.  In his book A Whole New Mind, Daniel Pink talks about lawyers who are going to be successful.  They are not the attorneys doing basic research (that is shipped to India).  The successful lawyers will be the ones who can close the deal or empathize with a client.

You, too, should look for ways to provide a product or service that will not soon be commoditized.  As technology improves, tax policies change, and globalization becomes more commonplace, consumers are going to look for every advantage they can get.  It will be up to you to search for more and newer ways to differentiate your product or service and build intellectual capital.  In the meantime, keeping as close as possible to your customer is something you can do to buy some time.