As an agency professional, you’ve no doubt answered questions for clients about customer-centric marketing in recent years. In fact, nine in 10 CMOs reported that their organization is trying to become more customer-focused, with good reason.

Thanks to the internet, customers have access to increased competition, crowdsourced product reviews and are targeted by a litany of ads. As a result, agencies must adapt.

Jack Welch, former CEO of General Electric, famously said: “We have only two sources of competitive advantage—learning more about customers faster than competitors and turning that learning into action faster than the competitors.”

The purpose of a business is to provide value to customers. However, over time, the focus has become centered on the product, operations or sales. In the face of stiff competition, customers’ demands have swung the pendulum back the other way. Today’s fastest growing brands are differentiating themselves with excellent customer experiences, but customer-centricity alone is not enough.

Businesses don’t win by serving customers well; they win by serving customers better than their competition.

Al Ries, co-founder and chairman of the consulting firm Ries & Ries, has pointed out that the vast majority of companies are trying fervently to develop better products and market them better to customers. When this doesn’t work, they settle for being the cheaper option. According to Ries, too many businesses treat marketing like warfare: a battle for territory. That approach leads marketers to predictable thinking and even less surprising results. Instead, Ries recommends focusing on the path of “least expectation.” In other words: be different—that’s what builds strong brands.

Too many businesses have a two-circle approach: one for the value of their company, and the other for the value customers want.

This way of thinking is certainly customer-centric. It’s the foundation for creating products that customers want and love, but it’s not enough. Customers make choices in a competitive context—they have options. Therefore, businesses must provide unique value in order to win their choice. They must consider a third circle: the value a competitor offers customers.

This creates an intuitive three-circle Venn diagram that visualizes how customers make choices in a competitive context:

And each area has significance for both understanding customer choice and taking actions to build competitive advantage:

Every customer has a variety of needs of varying importance. Your client may meet a number of those needs effectively, but their closest competitor might also meet many of those same needs and provide some unique value that your client doesn’t.

Nearly every market has unmet customer needs. The ability to help your client identify those needs and craft messaging to address them creates a powerful value proposition as an agency.

Success is helping your client “be different from competitors in ways important to customers.” Your client’s customers have a choice; you want to make sure you’re helping them become the leader in the factors that matter. Data is the key: knowing why customers choose your client (or their competitors) gives you the ability to develop a plan for addressing customers’ needs and build a lasting competitive advantage.