How to Gain Competitive Advantage

Competitive Advantage is a relative term. We hear it a lot about this term, but do companies really know what it means? Do they know how to achieve it? My topic for this individual assignment is about gaining competitive advantage in the retail world. I will discuss how marketing, and more specifically, how using customer insights customer experiences can help your company gain and sustain competitive advantage. I researched this topic and found an interesting article titled, “CRM In Retail Revisited: Using Customer Insight to Build Competitive Advantage.”
The article has many great insights into how companies can gain competitive advantage through expanding their customer insights and enriching the customer experience in the retail store. The author Lane Michel argues that relationships with your customers should be composed of learning what customers need, and it is important to also be proactive in this relationship to create strong loyalty to your company brand. Retailers develop relationships with their customers and then collect data from them. Michel states that “success comes when retailers are able to maximize the value of that customer information to create a meaningful ‘in-store’ experience for their best customers.” As a whole, this article is very insightful for the world of Customer Relationship Management; it gives many great examples of companies who understand how to leverage customer insights to gain sustainable competitive advantage.
In our class we have been learning about the topic of customer insights. I think this article does a great job of summing up the importance of this topic, and I am interested in learning more about how a company can apply this to their marketing strategies to gain an edge against their competition. As I read this article, the first company that came to my mind that exudes this subject is Nordstrom’s. People don’t shop at Nordstrom’s because it has the best clothes, shoes, accessories, etc. People shop at Nordstrom’s because of the experience they have when they walk through the door: the piano man playing, the clean and organized sections of the store, and the fabulous customer service they receive. People are willing to pay more if they feel good when they are done with their shopping experience. I know you’ve all been to a store and left extremely frustrated because the racks were a mess, the store was crowded, and the service was awful! A company like Nordstrom’s know how to please their customers which keeps them coming back and creates very strong loyalty to their brand.
For my report, I will be expanding on this topic of how companies create competitive advantage through building better relationships with their customers. Traditional marketing is no longer enough to be successful in the retail world. Companies have to learn about their customers to keep them happy and use this relationship to lock-in their customers and keep them from switching over to another retailer.

Source:
Michel, Lane. “CRM In Retail Revisited: Using Customer Insight to Build Competitive Advantage.” http://www.microsoft.com/dynamics/rms/product/customerinsightwhitepaper.mspx