How Can You Build and Protect Your Business Moats?

(Sixth in the series, "How to create a Point of Differentiation!")

What are business moats, and how do they relate to business?

Read on.

Rajendran, the King, was confident. He had planned and prepared for this day. He knew his neighbour, Puru, was greedy and jealous. Constantly at war across generations, the region kept swapping hands until Rajendran grew so much so fast that Puru had to retaliate. Being silent was not an option. Egos were at war here, and the foot soldiers were fodder to that fire.

Rajendran had expanded to the north border, well into Puru's kingdom. His motto was "Attack is the best form of defense." He knew Puru would come with all arrows blazing! Rajendran was ready.

He had built a fort with several layers of security. Slanted sharp wooden poles as the first defense. Followed by a large moat all around the fort. Deep and infested with crocodiles with only a single bridge to cross across. That negated the elephant advantage of Puru. The walls had turrets, and his archers were ready. Pitch and Tar were kept close by, ready to heat and pour should any enemy be foolish enough to try and climb the fort walls. Catapults behind these walls, prepared with flaming balls. And the fort door, big and strong.

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Rajendran was right. Puru tried hard to penetrate but had to give up every single time.?Rajendran had built up a solid moat that repelled all attacks.

The story is an analogy, and we will return to it later.

Rajendran successfully built a moat to protect his army and what he had built up. Despite several attempts, the competition was unable to penetrate.

What is your business moat?

That one thing (or a series of connected moves) that sets you apart from the competition. The thing that keeps your customers loyal to your brand while attracting new ones?in. What is it?

A business moat is "something" that makes it difficult for others to copy you.?

This?gives you a unique point of?differentiation?enabling you to turn into?a customer magnet. A good moat makes your messaging like?the?lighthouse!

Each company has a combination of business moats. Look at some business examples below:

Reliance Jio.?For their mobile telecom business, as well as their?OTT JioCinemas, they have successfully used "Pricing" as a moat. By giving away the core product either free or at a ridiculously low rate, they draw in customers by the millions. This leaves competition fuming and fretting unable to get into this penetration pricing moat set by Reliance.?

You are thinking, but they have loads of money. I am a startup. How do I build a moat?

?How did Nirma breach the Unilever moat? Nirma,?home-made?by Karsanbhai Patel in the initial days, found his micro market. Affordable washing powder is good at cleaning.?This?was lapped up by middle-class Indian consumers.?Using customer relationship, giving them what was needed, and price?of?course?as leverage, helped build Nirma into a formidable brand, sending shivers down?competition!

Despite severe competition in the mobile payment space in India (UPI), IppoPay leveraged language as a moat to reach out to?the small?shopkeepers and business owners to use their?product?as the primary mode of financial transactions.

Being quirky and deliberately?different,?is a moat that I use for my?own?brand and that of my consulting entity, The Outlier Marketer School.?

So, what is your business moat?

Will it last? Let us go back to the story .?

After six months, Puru returned. Rajendran knew he would. It was in their blood.?That itch must be scratched?till it bled! Puru burnt the spiky wooden protection.?Drained?the moat.?Found the secret tunnels into the fort and sealed it from?outside!?Puru had timed the attack in peak summer when the ground was baking hot and the?groundwater?at?rock bottom.?

Puru cut off any possible supplies into the fort.?And he?started to bombard the fort from outside with stones, he was now close enough to do that.?Every day, a new torture on the fort.?Food stores?depleting, water, and morale?at?an abysmal low, and a viral outbreak on the verge of sweeping across, Rajendran?had to throw in the towel and surrender.?In trying to save one fort of the many he had, Rajendran lost his entire kingdom to Puru.

EVERY MOAT WILL?BE BREACHED!

Every point of?differentiation?will be copied. It will be adapted,?made superior and the battle will come back to you (and me!).

The solution is to work on a?VERTICAL MOAT.

A moat where you are one step ahead of?competition.?When you know?your moves will be copied, you?have to?think ahead and play chess!?Planning for counter moves?as well as?outlier?ones,?to keep?you?point of?differentiation?in the minds of?you?customers and prospects.?Top of mind, always.

Nirma was upstaged by another player.?Now, with D2C brands, moats are being breached 360 degrees for those who come up with a single point of?differentiation?and then go to sleep happily! Such people will wake up TO a nightmare.?

Customer Service is a?non-negotiable?component of a vertical moat. So, is relationship management?at?a?personalized?level.?Check out the personal note I received with a purchase of a Pink Woolf product.

Brand collaboration works as well, especially in?noncompeting?spaces.

Here are my latest brand collaborations with Thy Chocolates and YellowBag Foundation!

Make your brand unique.

Create a vertical moat of?differentiation.

Be consistent.

Stay Top of Mind in your micro market.

Keep rustling the leaves!

Building Your Moat as a Startup: Practical Steps

• Identify Unique Strengths and Weaknesses:?Start by deeply understanding what you offer that no one else does.?Equally?important,?know?where you are vulnerable.
• Engage Your Target Market Deeply:?Use direct engagement to?understand customer needs and expectations.?This?can be through social media interactions, surveys, or direct customer feedback.?Best?to talk one-on-one!
• Innovate Continuously:?Use your size to your advantage. Smaller companies/divisions can often pivot and adapt faster than their larger counterparts. Regularly update your products and services based on customer feedback.
• Leverage Strategic Partnerships:?Collaborate with other companies to extend your reach or enhance your offerings. Choose partners that complement your strengths and help cover your weaknesses - and introduce your brand to your micro market persona.
• Maintain Customer Relationships:?Focus on building solid and lasting customer relationships. Personalized service and attention to customer needs can be a significant moat, the best!?

Like Rajendran's fort, your business moats will constantly?be challenged. Stay agile,?continue to?innovate, and always keep your customer at the centre of your strategy. Remember, the best moat is the one that continuously evolves.

#differentiation #psychology #social #community #marketing #lessismore #outliermarketing #pointofdifferentiation #outlier #painpoint

I am an outlier marketer and a raconteur.

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