Awake at 2 o'clock?

The UN air strikes against Gaddafi’s forces raise an obvious question. Why Libya? Although we believe Qaddafi is a really bad guy, there are plenty of other players in North Africa and the Middle East that have to rank somewhere near him on the Bad Guy Scale. Why could the United Nations get support (or at least abstentions from China, Russia and Brazil,) against Libya, when other despots are also killing their own protesters and defying international opinion?

I think the answer has a lot to do with defensible territory. Unlike Tunisia, Egypt, Syria, Yemen or Bahrain, the Libyan rebels took control of a distinct piece of geography around Benghazi. The big boys, America and European nations with modern weapons and air superiority, can’t bring them to bear in public squares filled with civilians and surrounded by homes. The Libyan desert offers an ideal tactical playground. Vast stretches of essentially unpopulated area where the bad guy’s forces are exposed, easily identified, and can be hammered without “unacceptable collateral damage.”

I know that I’m stretching an analogy here, but we use war metaphors in business all the time. From quoting Sun Tzu, to planning that involves strategy and tactics. We talk about gathering intelligence, employees being in the front lines, and more directly about trade wars and price wars. I’ll now add “Defensible Territory” to the list, although I’m probably not the first to use it.

As a small business, you compete on some level with much bigger foes. Whether it’s a big box retailer, a chain restaurant, or the Internet, someone is reaching out to your customers with more firepower (advertising, price advantages, technology) than you can muster. When you look at how you compete, do you have Defensible Territory?

The first answer of most small business owners is “We compete with better service.” Do you really, or are you just redefining your weakness as an advantage? Independent book stores looked at Amazon and said “Yes, but at Amazon you don’t have someone who knows your tastes, and can recommend what you like. That’s service.”

Amazon wiped them out with technology. Not only did Amazon learn to recommend related books, but their computers never forget a book you bought, or even one you looked at. It doesn’t matter how long it’s been since you walked in. They constantly refine their customer profiles. The employee who knows you the best never quits. If service is defined as knowing your customer, their computers far better at it than mere human beings.

So if you take away the definition of service as mere face to face contact, what do you have that is defensible? We use a company that delivers the filters for our home HVAC system every month. The price is several times what we would pay in Home Depot, but it is a low-cost item and the convenience far outstrips any concern over the cost. The actual day of delivery is unimportant. We don’t have to be home to receive it, and it doesn’t matter if we replace the filters a few days earlier or later.

That is a defensible position. Home Depot can’t offer that service. They are too big. The average sale is too small, regardless of how much margin it generates.

I have a friend who owns a mobile medical imaging service. They dominate the local nursing home market. Technicians are dispatched by text message and tracked by GPS. The nurses at the facilities are called when the technician is nearing them so they can prepare the patient. (An excellent example of cost-savings in technician time that is also perceived as added service by the recipients.) The digital X-Rays are transmitted via secure lines to a physician management group in another state, then distributed to MD’s for interpretation. Their verbal report is forwarded to the patient’s doctor almost immediately.

So the doctor gets a call from the nursing home on an elderly patient who fell, orders an X-Ray, and picks up the results on his cell phone a couple of hours later. He can then make a decision on whether it requires further intervention. This small business’ focus on building a system that makes things easy for their customers makes them dominant in their market.

I met an owner the other day with a fuel distribution business. He has selected a niche; small quantities of fuel delivered to commercial generator owners. Some need daily refilling of on-site equipment. Others have emergency generators that are tested and topped off monthly. Their needs are too small for the big distributors to service them. They are willing to pay a substantial service fee, because the effort and cost of sending employees to purchase fuel is astronomical compared to merely paying a premium price for the fuel itself.

In all three cases, the owners decided to define their service as something that added value, and needed to be paid for. They don’t compete on price. That would be the equivalent of the Libyan army offering to meet all of NATO in an open-field battle.

A warm greeting and a smile aren’t really service, they are the expected treatment for someone who is spending their money with you. One of my clients trains her employees to never answer “Thank you” with “No problem.” Service isn’t a problem, and we shouldn’t act as if it might have been under different circumstances. Courtesy and attention aren’t game changers, they are prerequisites.

Small business owners shouldn’t delude themselves that decent customer service is the same as Service. Customer service isn’t a differentiator. Service, if it is to make a difference to your customers, has to be a Defensible Territory.