How do you win and retain customers?

Perhaps you are better than the alternatives. With superior or breakthrough products and services. Providing more value for the money. Exactly what your customers need.

Maybe you are convenient, easy, friendly – a standout for all those “free” intangibles that customers enjoy when doing business with you.

Or perhaps you are someone’s habit. The phone number on the notepad. You once had an edge – a superior offering, the best location, a great brand – but now you are not so sure. Inertia and familiarity may be your greatest assets. 

Of course, you could be just lucky. It happens. You’ve built it. They come.

Whether you hold a position of strength, habit or luck, don’t assume it will last. The world is not standing still. Customers move on. Competition moves in. Standout value today is expected value tomorrow. If you have a winning business proposition, someone will be eager to share it with you.

Consider Southwest Airlines. They jumped out front with a simple focus: “Fly for Less.” But a proliferation of low fare carriers has undermined that position. “Fly for Less” remains prominently displayed on their website but look beyond that and you will see they are now courting the corporate world with two new fare options, “Business” and “Business Select.” Several former fare options have collapsed into one “Wanna Get Away” fare. Southwest hopes that beefed up amenities coupled with a great on-time record will appeal to business travelers and once again give them a great competitive edge.

There are a number of factors that can protect your competitive edge and delay the day that your unique value becomes the norm. These factors include patents, market dominance, installed base, territory locks such as airport gate leases and supermarket shelf space, intellectual capital, branding, high cost of entry, and geography.

For example, patent protection is the strategic hub of the major drug companies. Companies like Pfizer rely on the sales of their high-priced, patent-protected drugs to fund research for new drugs. They expect new patents and new drugs to provide new revenue streams as popular drugs such as Lipitor reach the end of their patent life and open the door for generic drug makers to move into that market space.

Territory locks provide another example and can be seen all over your grocer’s shelves. Ever bought a bottle of Tylenol? How many options did you have? Adult, children, infant. Headache, muscle pain, arthritis, cold, cold and flu, cold and cough. Extra strength, regular strength. Nighttime, daytime, day/night pack. Gelcaps, go tabs, EZ tabs, rapid release gels, cool caplets, tablets, liquid. Get the picture? Sixty-one options at last count. Do you think we really need this many options to reduce a little pain? Nope. This is not about you and your headache. This is all about competition and shelf space. Retailers have limited shelf space and they are not about to dump Tylenol PM for a no-name painkiller that professes the same benefit as one of those 61 options. Similar examples can be found in every aisle of the grocery store.

But patents, territory locks and the like only provide temporary protection. Patents expire. Grocery stores suddenly find space for Vitamin Water. The only sure way to stay out front is to innovate.

The ability to provide new or greater value requires a steadfast focus on customer’s needs and desires. This does not mean that you simply ask them. Your customers don’t necessarily know what they need or want. If Henry Ford had polled people about their needs, he figured they would have requested a faster horse. The trick is to understand the customer’s situation, their problems, the things they value, and then find the opportunities to satisfy the needs and desires that they may not even recognize themselves.

Beyond really understanding the customer’s situation, it is also smart to look at how their situation is changing. Close scrutiny of trends should uncover new opportunities. Graying boomers, increasing energy costs, water shortages, instant hand-held access to people and information – how do these affect your customers? No business is immune to these changes. And, with change comes opportunity. Picture your customers’ lives as these changes progress. Somewhere in that picture is a way to be better, to feel lucky, and to remain someone’s habit.