How are you different from your competition, why should people buy from you? You should be asking yourselves these questions daily. The answers to these questions can include the following: quality, consistency, customer focus, customer help, response, service, customer attraction, and more. Once you have answered these questions you should make sure that your customers can identify these advantages and are able to distinguish your business as both different and better. If customers do not perceive a difference from the competition, then there is none.
Common mistakes of identifying unimportant competitive advantages have caused initially successful business to drown as the marketplace grows. The first common misconception of a strong competitive advantage is price. Price should not be a business’ main competitive advantage, if you sell at the lowest price, there is no loyalty, it is merely a transaction, not a sale. Lowest price also means lowest profit, making it difficult to create a sustainable business. Another common mistake is identifying as being the first to market. Being first to market isn’t enough, as someone bigger with something better will come along and leave you in the dust.
With many popular markets saturated, it is hard to find what makes your business unique and different. However, finding your competitive advantage is key in keeping loyal customers as well as turning a profit. Here are tips to help you gain a competitive advantage in your business.
1) Are you the expert?
Position your business as the leading authority, expert, specialist or trusted advisor in your industry. This takes strategic and intentional action, but the rewards are exponential. When you’re perceived as the expert, people will start coming to you.
Make this measure resonate not just through your product but through your business literature. Use a mailing list, blog, monthly events, social media, Facebook live streams, interviews with publications or the radio, advertisements, and more to convey to your costumers your expertise.
2) Establish Brand Loyalty
Customers will often remain with a brand they have loyalty towards, even though the company does not offer the cheapest or most effective product. Focus on building strong relationships with your customers and delivering a great customer experience and service. Loyalty programs that offer discounts, first to shop new collections or free gifts show customers that you appreciate their business. Treating clients as one in a million instead of one of a million is essential in streaming in repeat customers.
3) What values does your brand stand for
Reposition your business and make it about something. What is your value proposition? A value proposition is a clear statement that explains how your product solves customers’ problems, improves their situation, and delivers specific benefits. What experience or inherent problem are you solving by offering your product? Is this connected to a larger theme in life? What keywords describe your value? If a persuasive reason for customers to purchase your product is absent, your company will lack convincing solutions to your prospects’ biggest problems. Remember, a customer is more likely to buy your message if they buy into your passion. So don’t be afraid to show it.
Once a concrete value proposition is identified, market your products/services besides these values. Providing compelling, inspiring, and relatable themes will attract customers. For example, in a saturated smartphone market, Apple’s value proposition is unique as it emphasizes the overall experience of using the device rather than the device itself.
4) Innovate what is currently working
Find something that is already working and make it better. If others have spent the time and resources and failed, why should you take the same course? Learn from the mistakes and the successes of other companies. Then simply use what you learned in innovating ways that are tailored to your business.
Examples of spinning the success of competition might include; putting a new spin on products by adding new user-friendly features; think of new uses for old products; are there ways to use your promotional campaign as an advantage; make it easier to do business with you; provide exceptional customer service, hours of operation, guarantees; are there any special services you can offer your customers that your competitors don’t?
5) Take advantage of small business’ localized connections to customers
Small brands are inherently closer to their customers and that can create all sorts of advantages. Niche brands provide a forum for people to share in the story. Highlighting testimonial pieces from customers is essential in communicating your brand’s value in a more authentic and honest voice. Customers want to hear about the brand from others not those on the payroll. Localized experiences with customers allow business owners to create and communicate a sustainable competitive advantage clearly to customers.
Worried about competition from larger businesses, don’t worry small brands and businesses build relationships and customer loyalty in ways big brands can’t. Broad but overlooked segments of consumers are being forgotten by big brands’ mass appeal and even small businesses can use the internet to build strong personal connections with those left out. The key is to tell inspiring, compelling, and realistic stories that resonate and to give customers the sense what largest companies can’t, that they understand you. Use the internet and social media to expand your message, don’t be afraid to use brand ambassadors with larger than average social media following. The purpose of business is to create raving fans and advocates, who will go out of their way to promote what you do. Not because you asked them, but because they want to.
6) Improve, Always
Once you have established a clear, competitive edge, the tendency might be to coast for a while. Yet this will set you up for disaster. There are brands that used to be number one in their industry and have fallen due to inferior products, inferior service, or poor reputation. In order to avoid missing out when competition enters your market, small business owners should constantly learn about new trends and technology as well as get feedback from customers in order to improve.
A good way to identify what your customers want is to talk with them and really listen to what they have to say. Customer feedback can be a cheap and invaluable tool in creating a competitive edge. Use feedback from customers who said no to you, those you left, those who love your company, loyal employees, departed employees, and industry leaders. Getting honest answers and recommendations will lead to sustainable improvements that are more market-dominant and profitable to you.
You should now have a clearer understanding of what it takes to develop a competitive edge. Knowing your competitive advantage is only a small part of business sustainability. If you have a business plan but failed to create a profitable competitive edge, what else have you overlooked?
A business plan is a living document that should constantly be reviewed to help you predict risks. Its importance as a blueprint for your business is invaluable.
When applying for business financing you should be able to articulate your competitive adantage to the lender. You ability to show a lender that your business will not only be able to compete, but be able to survive over time is often critical to getting the funding your need.