Innovation

Back to basics

Written by Ian Portsmouth

If you’re looking for guidance through the current financial storm, you’ve come to the right place.

That’s not to say we at PROFIT can explain how speculation in credit-swapped mortgage-backed derivative thingamajigs brought down this or that investment bank thanks to some quasi-governmental agency’s philosophy that people with no money should buy half-million-dollar homes that were never worth that much in the first place. And even if we could explain it, I seriously doubt we’d want to.

But we’re happy to tell you that many entrepreneurs are well positioned to benefit from a downturn, and countless more have the dexterity and drive to get to the right spot in tough times. You’re one of them.

How do we know? Because you’re reading this issue of PROFIT — which is full of insights into how you can race through a recession. (Or should I say, the recession?)

In a nutshell, you need to get back to basics. More specifically, you have to figure out what motivates customers to buy from you.

As our cover story by senior editor Jim McElgunn points out, the majority of business owners aren’t aware that they have anything to figure out. (See The Biggest Lie in Business.) After all, they’re “innovative” and “customer-driven” organizations that sell “value-added solutions.” Those terms might actually fit them to a T. The problem, of course, is that everybody else says the same thing. And that makes all such claims claptrap to the people who want to buy their products and services. This approach to marketing might float for awhile in a buoyant economy, but it will founder in the months ahead, when customers will apply laser-like focus to getting the maximum bang for their buck.

Identifying and learning how best to articulate your real competitive advantage, unique value proposition, point of differentiation — whatever you want to call it — takes discipline. But the result might be dead simple and cost almost nothing to implement. That’s what entrepreneurship guru Rick Spence discovered while passing one roadside sign on a recent drive through Maine. Check out his column, Wicked good strategy.

Still, at any cost, companies must be prepared to demonstrate better than their rivals how they can help grow their customers’ businesses when the universe appears to be shrinking.

By the way, it’s not. Yes, billions of dollars in stock-market value have been wiped out — on paper, that is. But, as you learned in high-school physics, every action has an equal and opposite reaction. For every dollar lost on the financial markets, someone has gained a dollar. The money is still out there. Figure out why your business deserves it, and it will come to you.

Originally appeared on PROFITguide.com