How To Differentiate Your Business To Give You Monopoly Control 

Monopoly control is perceived to be what the big businesses are concerned with.  In this blog I will be talking about how SME’s can differentiate their business to give them monopoly control in their marketplace.

As I felt that this topic crossed over into the world of marketing, I also spoke to Ian Kirk the owner of Opportunity Marketing a local company that provides marketing advice to SMEs.  He’s answered 4 important questions that I feel will assist you in differentiating your business, whether you want to have monopoly control or not.

Monopoly control was something I became consciously aware of when I worked at Yorkshire Water (YW).  YW is a regional water business supplying water and waste-water services in Yorkshire. Back then the water companies were pure monopolies. Unless you had your own water supply or wastewater treatment facility, you had no choice but to pay YW their standard prices. There was no negotiation. Full Stop 

My role was managing the services supplied to businesses in Yorkshire – mostly the big manufacturers of food, beer, soft drinks and chemicals. I lost count of the number of times businesses told me they didn’t like the market monopoly YW had. Naturally, an explanation of the role of the regulator (OFWAT) in setting prices didn’t go down easily. We were still a monopoly! 

Since then competition in the water sector has been introduced and is gradually giving business customers the choice of who supplies them. 

Yet, here’s the paradox. All businesses want to beat their competition and move closer to an effective monopoly position! When prompted, we all say we love the competition in our markets, it pushes us to be better, etc. But who would deny not wanting to control their marketWhy?  

Monopoly Control Equals Pricing Authority

Having monopoly control lets you have pricing authority. You set the prices for your products (within reason). Better prices mean better profits and a more valuable business. For almost all businesses they can’t be a water utility monopoly.

So, to have some level of pricing authority you need to differentiate yourself from your competition. The better you differentiate, the stronger the pricing authority, so the more valuable the profits and the business. Hence why Warren-Buffet, the world’s most famous investor, talks about investing in businesses with a deep and wide moat. That moat is the differentiation. 

How do you differentiate?  

Have a truly unique productusually something nobody can easily copy and could well be protected legally. 

For nearly every SME that level of uniqueness doesn’t exist so they have to rely on having a better marketing strategy that makes you different from your competition. That strategy needs to have 2 key features: 

  • a way of making your business unique 
  • something that your customers really care about

When it comes to developing a marketing strategy that works Ian Kirk has the answers.  As I mentioned earlier, Ian owns Opportunity Marketing and provides marketing advice to SME’s. I put the following questions to Ian:

How do you find out what makes a business unique? 

Ideally, when the business is conceived, great thought has gone into what differentiates you from everyone else and why a customer would choose to work with you over another supplier of similar products or services. However, this isn’t always the case. 

A useful retrospective tool can be to plot your competitors, alongside your business, on a positioning matrix.  If you are in a crowded, clustered area where there is little differentiation, take a look at the matrix and see where there is a clear space.  What would you need to do to move your business into that space 

Whenever we start working with new client’s we are always looking for that unique buying proposition – why would customers want to buy from you?  We have an intensive questioning process which looks at the business from a variety of different angles, which allows us to identify what the essence of that unique proposition is.  No two businesses are the same, and the answers are always within the business, its performance and its existing customers.

If you know your uniqueness, how do you work out what to say to target customers? 

The unique buying proposition is only one aspect – this is what sets you apart from your competitors.  Although this will play a role in your communications to customers (particularly at the point of purchase), what plays a much more important role is actually identifying who your target markets are, their defining characteristics and their behaviour. 

Once you fully understand each of your target audiences (because you are likely to have more than one), then you can tailor your communications to use the right words, imagery and calls to action which are going to appeal to them.  You can speak to them in a language that will resonate with them.  One communication will not fit all.  Target everyone and you will appeal to no-one. 

Also, how do you know where to say it when there are so many communication channels available? 

This dovetails with the previous question of fully understanding your audience.  If you can define them and describe them, and understand their behaviours, you can much more easily identify which are the key channels to reach them through.  You need to understand your customer’s world and who has an influence upon them.  For the vast majority of customer purchases there are four key stages prior to transaction – brand awareness phase, research phase, the decision-making phase and the purchase phase. 

It is no good nailing two or three of these, you need to have a coherent strategy of how you are going to communicate with your audience throughout each of these phases (and it could be through different channels).  Consider the whole process from start to finish.  Remember however, it doesn’t finish with the sale.  Once they are an active customer, there are the post-sale communications to ensure customer loyalty is retained and value is maximised. 

Finally, how do you even know if your marketing activity is working? 

You need to ensure that if you are carrying out marketing activity of any kind, you have the mechanics in place to track its performance.  You should test and measure all activity.  You need an enquiry tracking mechanism, whether a CRM or a simple spreadsheet, which follows a lead through from enquiry, to quote (potentially), to converted sale. 

Not only does this discipline allow you to identify which activity is working, it also enables you to spot any problems in your process.  For example, you could be running a campaign which is generating you loads of enquiries, but they are dropping out of the system at the quote stage and your conversion rate is low.  The perceived net result could be that the marketing activity isn’t working, as the sales per channel are low.  However, if the channel is generating a good volume of enquiries at a good cost per enquiry, then the marketing activity could still be doing its job (as long as the leads are of the right quality).   

Always track cost per enquiry (CPE), cost per acquisition (CPA), conversion rates (CPA/CPE), and Return on Investment (ROI).  ROI is simply calculated by dividing the profit generated in the campaign by the marketing cost incurred.  It also advisable to consider the average lifetime profit of that client acquisition, not just the first order. 

A Real Life Example

Ian was able to give me an example of a business that answered those 4 questions and succeeded at building a wide and deep moat. 

Stay Sourced , a promotional merchandise distributor, were in a very me-too industry, with hundreds of distributors in essence supplying the same products from the same industry buying groups.  Stay Sourced however excelled in its responsiveness and responded to customer quote requests typically within a couple of hours, whereas some of its competitors could take days. 

With this in mind we positioned the company very differently within the marketplace by focusing on the people and the service element, rather than the products.  We created a brainstorm assistant which also saved busy marketing manager’s valuable time.  So rather than having to browse through thousands of products for ideas, they simply filled out a short online form detailing the campaign parameters, brand parameters, target audience, budget etc. and the team came back to them with their suggestions. 

During a competitive period where the industry was hit hard by the economic downturn, through creating a unique position in the marketplace, Stay Sourced saw sales grow 45% over the next 3 years, without incurring any additional overheads in staff, thus seeing its net profit growth exceed this. The case study is available here.

A Few Interesting Statistics

If you have read this far and think effective marketing is all smoke and mirrors, consider this:  

When the average SME is sold the owner gets between 3 and 4 times profit multiple

SME’s that have developed an effective monopoly control through marketing get up to 5.5 times profit multiple*  

For a business making £100k net profit each year, that’s an extra £150k to £250k in sale proceeds! 

*based on over 40,000 SMEs that have taken the Value Builder Survey. 

The Value Builder Survey is free and only takes 13 minutes to complete after which you’ll instantly receive your Value Builder Score out of 100.  Get your score now!

If you would like to speak to me in more detail about this, book a free slot in my calendar. Or if you’d like a chat with Ian he can be contacted at 


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