 There is so much to love and admire about our next speaker. Some of my favorite things are just how passionate she is about dogs, getting people registered to vote, just so, so important, and her love of the great outdoors. She's also an adjunct professor at the University of Kansas and has some of the coolest tattoos I have ever seen. But there's no one better to deliver the following session jam-packed with competitive advantage takeaways than our following speaker. Please join me in welcoming Group Communications Director Discoverability at VMLYR Heather Fizziak. Hello, everyone, and thank you so much for joining us at MozCon Virtual 2020, especially despite the unusual circumstances. I know it's not the same as being in the big room in person together, but I'm so grateful to every one of the MozCon organizers and all of you for pivoting to this different format for everyone's safety. So hopefully we'll all be together again soon. I'm Heather Fizziak. I am Group Director of Discoverability at VMLYNR. I'm based in Kansas City, but we have a global footprint with around 80 offices around the world. And today I'm going to talk to you about competitive advantage, how you can find your unique value that you bring, especially as industries like ours and probably our clients' industries as well, are becoming increasingly commoditized. So let's talk about the state of our industry. SEO is dead. My work here is done. I'm just kidding. But if you've ever heard this eye roller before, this is a common refrain in the search industry. And you'll often hear it when Google takes more precious real estate into its clutches away from website owners. Or as we watch the internet become inundated with content for SEO that's drowning out really great content. Or maybe dime a dozen SEO providers are popping up all over the web offering these lowest common denominator search services. It's enough to make any search expert feel like it's impossible to win. I get it. But I argue that search and content marketing aren't dead, far from it. In fact, they're just commoditized. Google is still the main place people turn for searching for information and answers and action. And humans will continue to search. It's in our nature to search, even well beyond Google. However, the industry is becoming increasingly commoditized and that's something we need to talk about. So I surveyed more than 100 digital marketers around the globe, and I asked them whether they're observing their field becoming commoditized. Of those, more than two-thirds said that content marketing is moderately or highly commoditized. Nearly 73% said the SEO industry is commoditized. And almost a full three-quarters said the paid search space is becoming moderately or highly commoditized. But you already knew this, right? You're working in this field. The trouble, though, with commoditization of an industry is that it makes it difficult for a business to stand out. It gets harder to stay competitive, which makes it harder for your business to grow. And it's not terribly surprising because achieving real, sustainable competitive advantage is not an easy task. I mean, these are just a few of the many reasons people say that it's hard for them to stay competitive in their industries. It ranges from knowing what opportunity is available to you to own to challenges being able to innovate rapidly enough to internal barriers like buy-in or fear of risk taking. So with all that in mind, is our industry in trouble? I mean, are we in the wrong business? Well, it's not just us digital marketers who are experiencing commoditization and competition. Our client brands are fighting this too because it's a natural part of the lifecycle of business. So without understanding what competitive advantage really is, much less how to find and prove and defend it, we risk drowning in that sea of sameness. So we're going to use digital marketing professions like search and content as a working example throughout this talk, but know that these principles can benefit you, your clients, or any business regardless of industry, but it could also even help you assess your individual competitive advantages, perhaps when it comes to landing a new job or getting that big promotion. So what even is competitive advantage? There are a few traits that most professionals agree on, but that open-ended survey revealed a lot of disparity and confusion. So I'm here to clear that up. Now, most often when we talk about a brand's competitive edge, the conversation winds up at mission and vision statements. But the sad truth is that many, many businesses are claiming competitive advantages in these meaningless mission statements that aren't really competitive advantages at all. So let's break down one example. Profitable growth through superior customer service, innovation, quality, and commitment. This is a commonly used example of a bad mission statement and that's for a few reasons. One, it's vague. It has no specificity whatsoever. It's got this long list of things without any focus or tangible way to actually implement and measure. And there are things that every business should probably be doing. These are table stakes for even being in business. You could probably copy and paste any brand name in front of this. In fact, I found a dozen companies that did exactly that. This was in just the first two pages of search results where brands pasted their name in basically even though this is heralded as a prime example of a bad mission statement. And if the meaningless mission statement isn't enough, let's examine what many brands consider their unique selling propositions. Brief digress here. I actually dislike the phrase unique selling proposition or USP because it's all about the brand. I much prefer a UCB or unique customer benefit which puts the customer at the center. This is what we should be doing as marketers. But let's move on. So apologies in advance if you work for any of these invoice software companies. So Freshbook says invoice software that saves you time. Invoice to go offers time saving features that keep you in control and slick tools says they can help you organize and speed up your invoicing. So you're saying you'll save me time. Cool. Now in fairness these brands also usually list other benefits as well elsewhere on their sites and some are even okay, but this is what they're leading with. The problem is that none of these are unique. Nearly every invoicing software that I looked at highlighted some version of speed or saving time or getting paid faster. That is certainly a valuable feature, but what's the benefit that's going to make the customer choose you when everyone else offers the same thing? Now let's try these instead. These benefits are a lot more clear. Invoice simple says you can invoice your customers in seconds. They're not just saving you time, but you're getting invoices done in seconds. That specifically is what puts it over the edge. Zero gives you a real time view of your cash flow. Cash flow is incredibly important to businesses and that ability to see it immediately at any time is a great benefit. And Scoro says stop using and paying for six plus different tools. It is very, very common for small and medium size businesses to add one tool at a time over many years and then one day they wake up and they're drowning in accounting software and maybe they're making more mistakes with the higher margin for error or they're just losing time keeping it up with all. So much, much, much better. But this is only brands who are articulating what they think their competitive advantage is. How do you know whether your unique value is a competitive advantage at all? So I sometimes say to start with your Est. That's best, fastest, smartest, cheapest, most innovative, most horizontally integrated. Whatever it is, go through this brainstorming exercise and ask yourself what you are best at or what you want to be best at. Keep in mind, maybe it's not the Est overall. Maybe it's the Est for a specific segment of your audience or a specific need state of your customer or the Est of a specific geographic region. Now, once you have a few of these in mind, you have to check them against a few criteria to ensure that they really are competitive advantage. First, is your advantage unique? If anyone can claim the same thing, it's not unique. It should serve a unique need, a distinct audience, or deliver your product or service in a unique way. So dig deep to find something that is specific and tangible that sets you apart from your competition. Next, if you can copy and paste any brand name in place of yours, it's probably not defensible. Make sure your unique benefit or advantage is clear and specific. So avoid superlatives and hyperbolic language that can't really be quantified in any way. The typical mistake that I see is generic language that doesn't paint a picture for customers as to what makes you special. It's too vague. And I frequently heard in the survey that people believe that they have competitive advantage by being first to market with their type of service. And being first does confer some benefits initially, but as soon as the market figures out that there's money to be made and there's very little competition in this space, that's when they swoop in to encroach. First mover advantage is competitive advantage for a little while, but it's not sustainable competitive advantage. If you can't hold on to that competitive advantage for a long while, it's too short term. And today we're focusing on sustainable CA. Next, if your customer doesn't care about it, it's not valuable. And thus it is not a competitive advantage. So what you're in business to do isn't defined by what you're selling. It's defined by what your customer actually wants. And in the search business, this is especially true because if people aren't searching for it, then it's not valuable to the business. Your customer has to feel that what you offer is of greater value than what your competitors offer. And that typically happens in two ways. You may have a comparable product, but at a better price, or you may have a better product at a comparable price. So your relative value would be greater. It's also not competitive advantage if you're not really living it. This is why typical CSR or corporate social responsibility fails to be an adequate competitive advantage for many brands. They make a few donations, they slap a logo on their website, but they're not really living that purpose from top to bottom in their organization. And frankly, customers see right through it. It cannot be a competitive advantage that is on your website, but that also isn't reflected at the C level with your sales reps who are working with customers in your factories and so on. Now for all their flaws and all of my personal moral beefs with Jeff Bezos, Amazon was unwavering in their commitment to fast and affordable shipping, and that's been a huge contributor to why they are the behemoth they are today. And people know that Ben and Jerry's is this vocal and activist brand in every aspect of what they do and they live up to the promises that they make at every interaction. Possibly most important of all, competitive advantage is temporary. It's a moving target. Now the objective should probably always be to have long-term sustainable competitive advantage, but I don't want you to conflate long-term with permanent. Certainly enjoy it while it lasts, but you cannot get too comfortable. When you identify yours and you're enjoying these nice profit margins or share a voice in a space, competitors are going to start racing to take advantage of the new learnings themselves. And that's going to lead to eventual parity among competitors and the cycle starts again. So you need to figure out where to evolve or reinvent to stay competitive. So this is a handy little framework I created for finding, establishing, articulating, and maintaining your competitive advantage. Discover, differentiate, demonstrate, defend. But note that this isn't purely linear one way. Once competitors encroach on your previous advantage, you're at risk of losing it. So be sure you're always looking ahead to what your next competitive advantage may be or how you can elevate and defend the one that you already have. So let's dig into this framework a little further. First, discover. The tools to find your competitive advantage. Now, discovering what makes you different is half the battle, right? In an increasingly crowded and competitive landscape, how do you figure out where you can win? Now, the number one recommendation coming out of my survey is just to ask. This could be tools like formal surveys and in-depth interviews, or it could be as simple as casual feedback or ad hoc conversations with your customers. And that can reveal some seriously insightful advantages. The objective here is to figure out why you over someone else. So a few things you might ask them, why did you hire us over another firm or why did you hire another firm over us? So we often, almost always, ask the brands that we pitched to in the RFP process these questions. So we can better understand what's valuable to customers and what's not and continue to modify our approach. You might also ask existing clients, why did you choose to leave us and switch to another firm or why do you continue to work with us after all these years, like exit interviews and stay interviews? Look for patterns and the reasons that you are gaining and keeping and losing great clients. Your competitive advantage might be hiding in there, but also insight into your competitors' advantages and any gaps that they aren't filling as well. Beyond asking, try also listening quietly. So this could include social listening to be sure, but also think of things like conversations on Reddit or Nextdoor or other relevant forums where people are having a frank dialogue or they need solutions to their problems or people are making recommendations for or against different brands because people are more likely to be honest in this environment where they're helping their neighbors. You can certainly read ratings and reviews on popular sites like Amazon or Yelp as well. Granted, it's easy to fake reviews in sites like these, but look for patterns in what people are saying about your brand and your products and services or your competitors' products and services. What are their common complaints? What do other brands do poorly or not at all that create gaps that you can fill? Next is to workshop it. You have to ask yourself hard questions about who you are, what you can commit to and how you can follow through with your customers on your competitive advantage. So conduct some exercises for your brand but also do the same for your competitors and learn from other industries as well, not just your own. So there are a million and one tools and formats you could use to do this, but I'll just briefly cover two, the classic SWOT analysis in the Porter's Five Forces model. So SWOT analysis, or anybody who's not familiar, it's strengths, weaknesses, opportunities, and threats. And you want to do this for your brand as well as your competitors. Now, strengths are the capabilities and value that you bring to the table. Weaknesses are the gaps in your resources or capabilities or offerings that might hold you back from being best in class. Opportunities are the untapped or unexplored areas of potential growth and threats are outside forces or external factors that put your business at risk, like economic downturn or perhaps susceptibility to global pandemics or entry of a disruptive new competitor. Now, the second tool I want to share with you, this is a little denser, so roll with me here, but it's the Porter's Five Forces framework. Now, most folks who attend business school or get their MBAs are going to learn about this, but you can also read about it in Michael Porter's book, Competitive Advantage. This is a method to analyze the competitive pressures on your business. At its most basic, you might ask yourself questions like the ones I'm about to share with you and assign a high, medium, or low pressure value for each of the Five Forces. His model basically asserts that these Five Forces determine how intense your competition is and thus how attractive it is to enter an industry based on its potential for profitability. So it's also a valuable critical thinking tool, even if you're already in an industry, to figure out where you can compete and edge out that opposition. Okay, so here we go, we're digging in. The first force is competitor rivalry. It's right in the center in orange here. What is the quality, quantity, and diversity of your competitors in this space? How fast or slow is the industry currently growing? What's the growth potential in the future? Are customers civically loyal to a brand? Are they brand agnostic and switching around a lot? So this is kind of like the macro view of your competitive space. Okay, so next, we need to think about the toggle between the threat of new entrants into your space and the threat of substitutes for your space. So new entrants, let's focus there first on the left. Is it an easier hard industry to enter? Are the barriers for entry higher or low? That's the core of this. So a brand with a high threat of new entrants or low barriers to entry might be something like food trucks with some good recipes, a little capital to invest in a truck, and some elbow grease. You could basically be in business tomorrow. But industries that have a very low threat of new entrants or high barriers to entry might be things like airlines. So it's very expensive to buy planes and find and hire qualified pilots, and it's an industry that is loaded with governmental regulations. So now switching over to substitutes, are there many other products and services on the market for your customer to choose from as a complete alternative to what you offer? And once again, what are the switching costs like? Is it hard or easy to switch between these things? Could there be an entirely alternate solution to what you offer or might they abstain entirely? So for example, on that, an alternative to a highly commoditized toilet paper product might be an entirely alternative solution like a bidet. So what comes to mind is the brand Tushy, who basically took off when COVID-19 hit and stockpilers made toilet paper scarce. Or perhaps a makeup brand like Sephora faces substitution in the form of abstention, people who are choosing not to wear makeup at all, perhaps in the wake of a global pandemic. Okay, so now the final two forces. We have to think about how well buyers and suppliers can bargain with your company. I feel like I'm using air quotes a lot, but hang with me. So every company has a supply chain, even service businesses like digital marketing. For traditional manufacturing companies, suppliers might be the raw materials or transportation providers. For digital marketing companies like ours, suppliers might be technology companies like Microsoft that provide software, or it could be the talent that we hire to do the work. And if demand for those supplies is greater than the available supply, then the bargaining power of those suppliers creates high pressure. And this can be due to the quantity of suppliers or the unique needs that you have for securing those supplies. So for example, if you need GMO free, organic, locally sourced ingredients from companies that donate money to offset their carbon impact, those suppliers are probably harder to come by than suppliers that don't meet those stringent criteria. But if the resources you need are a dime a dozen, like chips and PC laptops, for example, bargaining power of suppliers is lower. So now switching to buyers, remember that end users and buyers are part of your supply chain too. If buyers can easily bargain by driving down costs through competition, you have high pressure here. If you are truly the only player in the market or want a few who do what you do, then the bargaining power of buyers would be lower. Okay, so let's move on to differentiate. Once you've found the gap you want to fill, you need to choose your area of focus. Often we make the mistake of trying to be all things to all people all the time, but brands and individual humans cannot pull this off in a sustainable way forever. So if you're trying to be adequate at everything, it's difficult to be great at anything. There's an opportunity cost to everything we spend our time, money, attention on. So this is why you'll see a lot of companies actually diversify their offerings and spin up separate business units or product teams. And when they are exploring these new avenues for business, they don't typically try to make it work using only the resources and talent they have dedicated to their original line of business. They want to separate off resources and dedication and focus and budget to ensure that the cash cow piece of their business stays functional in driving revenue. And this new area of exploration has the right resources to be done right. Now the silos that occur because of this are a talk for another day. Every business decision has trade-offs, but we'll talk about that another time. So while it's not impossible, it's very difficult to maintain a deep focus when you are spread too thin. Now remember that smart strategy is not just choosing the things you will do, it's choosing the things you won't do. We need to be willing and able to make hard choices about where to spend our time, budget, energy, and attention. And to get truly great at something and achieve competitive advantage, you really need to set your sights on something specific. One problematic example I've heard from a big client is challenging our paid and organic search team to win at both efficiency and return on ad spend and volume and share a voice at the same time. And the reason this is problematic for anybody who doesn't work in paid search, efficiency and ROAS have a more selective approach to advertising on certain terms or topics that ensure we're optimizing for an efficient cost per acquisition. So it results in a narrower reach, but very efficient use of ad dollars. On the flip side, focusing on volume or achieving the largest share of voice in a space typically requires casting a wider net and traffic may convert at a lower rate and profit margins and ROAS might be a little tighter so they don't really coexist well. Another common challenge is trying to be a company or a person who's both broad and versatile while also being deeply specialized. And this isn't absolutely impossible, but maintenance and upkeep becomes very challenging over time. So if your brand wants to be perceived as the most versatile brand that can adapt to anything or meet everyone's needs, that's great. It's just difficult to also be perceived as deeply specialized in a certain field. So let's use Grocers as a working example. So Grocers might be the generalist for being able to get just about anything you could possibly want in one place, but nature's own might be the deeply specialized whole organic local food shop. Far less variety and versatility, but you can be assured that everything they curate in their store hits certain quality in sourcing criteria. So consider what that means for you as a business or as an individual professional. I have a quick exercise I want to do with you. If you go to MozCon.vmlyrconnect.com, you can get a full stack of resources and tools to bring your competitive advantage to life, and it has every MozCon talk I've ever done. But let's walk through a few of the questions real quick that you would ask yourself. Okay, so quick exercise to break things up. What would you say you do here? What are the core activities that make up your business? This could be core products or services, core audiences you serve, core problems you solve. Consider the individuals, decision makers, customers and firms that you serve. Are they in certain industries or do they have certain job titles? Where do they get their information and how can you best reach them where they are? What keeps them up at night? What problems are they solving or decisions are they making that you could help with? What are points of friction or frustration that you or your business are uniquely equipped to alleviate? What are your customers value? According to yet another book, it's called The Purpose Advantage by Jeff Fromm. The business you're in is defined by what your customer wants, not what you're selling. So reflecting on this question can help you identify a higher purpose for the company through the eyes of your customers. Next, you have to be able to answer the why you question with a unique and persuasive reason. And I love getting to the why behind anything, but if this doesn't jump out at you immediately, try the 5Y's exercise. It's an iterative technique that helps you dig deeper into cause and effect relationships. So you work your way backward, asking why time and again until you get to the core. So let's try an example. So the ordinary, they're a makeup company. They sell affordable back-to-basic skincare products. They're growing super fast. They just grew to $300 million in sales last year, and they only launched like three years ago from parent company Desium. Brand name recognition and sales volume are off the charts. Why? The brand is taking off with budget-conscious millennials who are over 30 and take an interest in skincare. Why? None of their products cost more than 15 bucks. Why? Their products only have the most essential active ingredients and they're skipping unnecessary stuff like parabens and sulfates and mineral oil and formaldehyde and mercury and a bunch of stuff I can't pronounce. Why? This creates an affordable skincare regimen without scary, unknown ingredients, all without animal testing and without excess wasteful packaging. And final why, your fifth why, this hits on morals and values of the millennial skincare audience who want to, you know, stay beautiful but minimize their impact and their footprint in the world without having to pay a premium to do it. And once you've done the due diligence of truly reflecting on these questions, examine your answers. Look for clues and patterns that start to formulate a plan for the areas where you can bring the most unique value to your customers. And competitive advantage can take many, many forms. There are typically several avenues a brand can take to own a certain customer benefit or audience segment or industry or price point. So here are a few clues to watch for in the patterns. I'll only cover a few. Are you the most personalized brand in your space? The ordinary that I was just talking about? They allow customers to fill out a short questionnaire and their skincare experts will create a custom skincare regimen for you. Or do you have an incredible community with loyal advocates and rich conversation that people want to be a part of? Brands like Moz and Tableau seem to have this advantage in their spaces. Do you have a reputation for constant innovation, rapid evolution, generally outsmarting the competition or disrupting an industry? Tesla, for all of Elon Musk's flaws, is iconic for its innovation. They're almost synonymous. Consider things like supply chain efficiencies, breadth or depth in certain markets, the ratio of cost to value, ethics and commitment and causes, find the pattern. And now it's time to boil it down into a simple brand statement to make it crystal clear what your competitive advantage is going to be. And this is going to help you focus your resources. Do note that this isn't a simple exercise. It's deceptively simple on screen. If it's too easy, you should probably be skeptical of whether you've really found your competitive advantage. So put in the work, writing these statements is hard and it takes time and you should expect to have to revisit this over time as your competitive environment evolves or your customer's preferences change. So I took the liberty of writing one for the ordinary. We, the ordinary, create high performing, minimalist skin care products so that cost and cause conscious skin care enthusiasts can have an ethical, effective skin care regimen without paying a premium price. And then check your work. Pressure test that brand statement. Does it meet the five criteria we talked about for competitive advantage? If not, keep digging. And once you have a clear competitive advantage statement, be sure to connect and reconnect with that intention time and again. Now that you've discovered your potential competitive advantage and chosen where to focus, it's time to bring it to life. It's one thing to find it to begin with. It is entirely another to demonstrate that consistently to your customers. Now the difference between the average brand that merely puts a mission statement on their website and a brand with true sustainable competitive advantage is whether they walk the talk and every single thing that they do. It has to be consistent with your products and services. It has to happen at all levels of your company. It has to be true in every moment that you're communicating with customers. And once again, we find ourselves pressure testing competitive advantage, but this time we're asking, can we realistically live this across departments, offices, teams, roles, initiatives, processes, marketing efforts, and everything in between? Let's talk about a couple quick questions you might ask yourself in order to activate competitive advantage in every respect. How does this affect your existing ways of working? What changes do you need to make in order to be able to live this fully? If you're just now identifying your competitive advantage and that's totally okay, you may have work to do in order to make sure that this is consistent across your organization. What are some things you won't do in support of your purpose? I love this question. This could either be things that you're choosing not to focus on, or it could be things you're actively avoiding. What team members can you bring together from across functions and activate this competitive advantage? Be sure you're providing common language to your team so you can all be united in action driving toward those competitive outcomes. How are you going to prove your commitment outside of your organization to your customers? Your team from the top to the bottom needs to fully believe and commit into this mission. But your customers also need to believe you too. So ask yourself what proof looks like. How will everyone know if you are in fact achieving the competitive advantage that you're claiming? And what indicators can measure how you're putting your competitive advantage to work in action? Make sure to define what winning looks like and establish a baseline for how you're doing and how the competition is doing. Create metrics that support that new purpose. A couple of quick examples. Is it a high win to loss ratio when you're pitching new business or a certain growth trajectory for company size or revenue? Is it share voice in the industry or among a certain audience segment? Or maybe it is the retention of your ideal type of client or high referral rates? Whatever it is, just know what you want to achieve and how the competition currently measures up and then revisit those measurements regularly. Now, please, please know, you cannot be casual about competitive advantage. This is not a hobby. This could be life or death for your business. You have to be obsessed. All right, last part of the framework is to defend that competitive advantage. Remember, competitive advantage is temporary. It is a moving target, and that's why it's so difficult for brands to achieve and maintain. I'm going to reference the typical product lifecycle here, another NBA classic, but I'm going to stretch it a bit to fit my point about defending competitive advantage. Now, when a brand new company emerges or they have a new product, service, audience, competitive advantage, whatever, much of that effort and investment is spent on raising awareness and amassing your first customers. Great. Then you start to build up preference for your brand, increasing your market share, whether that's establishing that new or taking it away from other brands. Competition might be lower at this stage. You're getting some scale. You're growing your audience. Then your steep growth trajectory starts to level off. The competition sees that you're on to a good thing and they start cutting into your piece of the pie. You might fight it by adding more features, or perhaps you lower your price. In a typical business, this is the point where sales may even start to decline. You have choices here, right? You can maintain your existing service and try to rejuvenate it. You can cut costs to stay competitive, but maybe that cuts into your profit margin and makes it a little less worthwhile. Or perhaps you decide to get out of the game entirely because it's not financially attractive anymore. If you have an attractive competitive advantage and you're making good money, we know that competitors in the space are going to adopt that to stay competitive themselves. So those copycats encroaching on you leads to parity and that competitive advantage diminishes. Or, you can find new ways to achieve competitive advantage. You can explore areas of expansion or even completely reinvent yourself to renew your competitiveness. The cycle starts again and you can once again become the one that others want to catch up to. Now, you can only fight off the competition for so long doing the same things. And fighting isn't always the answer. At some point, you might need to evolve. And there are a few ways you might do that. You could explore new markets. Are there underserved or untapped audiences you could reach? You can expand new closely related product lines and services. You could add new features or innovations to your existing product or service. Similarly, you could also elevate or enhance your current benefits. You could cut costs to produce or shift or find economies of scale. Which drives price down and it makes your parity product more valuable relative to price. Or you could go through mergers and acquisitions or even divest certain pieces of business so you can focus on your new competitive advantage. Now, this is hardly an exhaustive list. Just a few thought starters on what evolution might look like if you're at that stage of your career or if your business is at this point in its natural life cycle. Now, in order to create keep and defend sustainable competitive advantage long term evolution is necessary. Keep rooting out the opportunity for renewed competitive advantage and master the art of reinvention. And if you can adapt and transform, you can compete and survive. Thank you very much. Remember mozcon.vmlyr connect to get all your free goodies. These are the two books that I talked about and thank you again for me and all of us at VML Y&R, especially in our discoverability group. Thank you.