Competitive advantage is a hot buzz concept in business today, but in his book Hidden in Plain Sight, Erich Joachimsthaler makes the case that a focus on “customer advantage” is a surer path to growth.

So-called competitive advantage, Joachimsthaler argues, often amounts to technical upgrades and features that customers generally don’t care about. He cites Kodak’s fixation on picture quality at a time when digital photography had broadened photography’s service offering to “memory management.”

Joachimsthaler’s prescription is for companies to look at where a product or service can fit into people’s lives, while avoiding the tendency to focus on an existing product line. His book offers examples of well-known companies that have seen tremendous growth from positioning their offerings to fit consumers’ existing needs and habits:

• Already the No. 1 snack food company in the U.S., Frito-Lay boosted sales after studying consumers’ in-store behavior. The company adjusted package sizing and shelf strategy to better match buying patterns. For example, it placed larger sizes in the spots where customers look for snacks, and focused less on the traditional checkout display, which was shown to be ineffective.
• Unilever virtually created a new product category with its Axe body spray. The company identified a market opportunity — giving young men an advantage in the dating game — and recognized that a new product would generate interest more effectively than repositioning a product like a deodorant or cologne. Procter & Gamble has seen similar growth as its toothpaste brands have expanded into an oral hygiene portfolio that includes whitening strips.
• The German insurance company Alliance repositioned itself as a “financial supermarket,” recognizing that for consumers, insurance is part of the wider picture of financial security.

While the author’s main concept — the demand-first innovation and growth model — is somewhat forced, his case studies underscore the value of approaching growth through customer advantage.

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