For the first time in the franchise’s 17-year history, the Memphis Grizzlies have home court advantage in a best-of-seven series against the Los Angeles Clipper to kick off this year’s Western Conference Bracket in the NBA Playoffs. The Grizzlies have accomplished quite a feat in securing home court for the playoffs and now they’re serving as inspiration for today’s Hyphenated Thinking Blog entry.
The importance of home court is psychological. You’re playing in front of the home crowd. You’re on your home turf. It gives you a swagger of confidence and comfort that’s tough to muster on the road. It’s all about familiarity with your surroundings.
To me, the same idea applies to building a competitive advantage in the business world. If you know your surroundings, you are better psychologically prepared to compete in a tough and often crowded field.
There are three key elements you must have to build a home court-style competitive edge for your business:
- Data you can understand
Statistically, the team with home court advantage wins out. Home court advantage is particularly favorable in the NBA where, until the second round of the 2007 playoffs, 78 of 97 of deciding contests were won by the home team.
When you are on your home court, you know the odds are somewhat in your favor.
On his home court, a player like OJ Mayo knows precisely where on the court he can shoot his highest percentages. He knows where to focus when he shoots his free throws. He’s got it down to an exact science.
In business, knowing which metrics to monitor and what activities actually impact success is imperative. Three key measurements you should know and monitor to continually keep an advantage:
- Conversion Percentage – The number of sales made divided by the total number of prospects approached.
- Average dollar amount per engagement or transaction – Monitor this number per customer. This includes how much you have to spend on a customer throughout the sales process and retention lifecycle. Every customer should be tied to a specific cost.
- Acquisition Costs – You must know how much each customer costs throughout their lifecycle to attract, service and retain.
- Information you can count on
Basketball lore has it that the Larry Byrd-era Boston Celtics knew all the dead spots on the parquet floor, giving them a huge advantage over visiting opponents. They could strategically move the ball down the court in certain patterns or have an opportunity to go in for a steal when the ball hit the dead spot.
The Memphis Grizzlies know that the FedEx Forum crowd, cited by nearly all the national broadcast media outlets last year as the loudest in the NBA Playoffs, will be on their feet when the fourth quarter begins. The team knows they can count on their home fans to give them an extra boost if they need it down the stretch.
In business, some of the most valuable information you can count on is gained through a deep understanding of your unique customer segments.
To gain this knowledge you must know:
- Your Ideal Customer Profile – Not every prospect is ideal for your business. Understand in descriptive detail who your best customers are and where to find them.
- Your Unique Customer Motivations and Needs – Monitor their satisfaction levels and constantly seek out ways to improve your offering. Stay ahead of the competition by monitoring customer needs and developing services and products that meet new demands.
- Comfort in your surroundings
Playing a basketball game on your home court means you get to sleep in your own bed the night before, drive down familiar streets on the way to warm-ups and execute your unique pre-game ritual to a tee. It’s impossible to develop that kind of rhythm without deep knowledge of your surroundings.
Generally speaking, it means you have an added level of security about the landscape in which you are set to compete.
In business, this piece is about knowing your place in the market. If you are relying on your gut to tell you how your business is positioned, you may find your perceptions don’t match up with reality.
Gain the confidence you need by knowing the answers to these questions:
- What is your unique brand position?
- Why do your customers choose you over the competition?
- What makes your product or service unique?
- What’s your value proposition to each unique customer segment?
- Where are your products or services on the customer value chain?
When you can confidently answer these questions, you have built a framework for a competitive edge that rivals that of having home court in the first round of the NBA Playoffs.