Every company has competitors. The nature of business is to compete for buyers’ attention and money. Even the smallest business in the tiniest town competes with another enterprise. In a world where brand loyalists make or break an organization, your enterprise needs to differentiate itself from the competition. What makes you different from the business down the street?
What is a Competitive Advantage?
Your competitive advantage is what sets you apart from everyone else. It’s how you’re able to offer products and services at the best price. Or the highest quality products and services. Or any number of other benefits that entice people to buy from you instead of elsewhere.
Think back to when you first thought about starting your own business. Maybe you saw a need in your community. Perhaps you wanted to offer better products and services than what was available at the time. You set out to own a business that does something different. So… what do you do differently? The lowest prices in town? The most luxurious options around? The latest, cutting edge technology?
Identifying Your Competitive Advantage
Looking inward to define the core tenets of your business is much harder than it sounds. You’ve been in business for so long that these values are engrained—but maybe not as easy to recall when put on the spot.
To determine your competitive advantage, consider why people buy from your company. What about your business brings customers to you instead of your competitors? What do you do to make the buying experience better for them? Easier for them? More cost efficient or valuable for them? Ultimately, your competitive advantage is the value consumers receive when they shop with you.
Still stuck trying to figure it out? Consider some of the simplest value propositions customers consider when it comes time to buy. How many of the following boxes does your company check off and are there any in particular that you do better than anyone else in the business?
- Your location makes it easy for people to pop in and out when they’re commuting
- You provide prompt service with very few steps between initial interaction and sale
- You have an easy-to-use website where people can book services or purchase items
- You offer products and services that few others offer, especially in your area
- You keep costs low and pass those savings along to customers with low prices
- You’re the top-rated service provider in the community, as rated by local customers
- You use innovative technology to offer cutting edge services or products
- You’ve been in the business longer than anyone else and know it backwards and forwards
- You have special credentials, certifications or affiliations that others don’t have
- Your staff is friendly and you provide a welcoming, positive experience every time
When you really start to think about it, you probably have more competitive advantages than you realize! The trick is finding the one or two that define your business better than anything else—the ones that set you apart from the competition in a major way.
Don’t Try to Please Everyone
As you consider what differentiates your small business from its competitors, remember to keep your competitive advantage scalable. For example, you sell high-quality, handcrafted products that shoppers can’t find anywhere else. That’s a strong competitive advantage. Trying to beat the competition on pricing will overextend your capabilities and possibly even drive you out of business because you can’t afford to charge so little for these premium goods.
You’ve built a business from the ground up, and you should be proud of that accomplishment. Don’t try to be everything to every person because it’s simply not realistic or feasible. Instead, focus on leveraging your competitive advantage with your target market.
How to Leverage Your Competitive Advantage
After reflecting on your competitive advantage and identifying the key benefits that set you apart from the pack, it’s time to leverage these selling points. Ultimately, entrepreneurs work through this exercise to determine how to market themselves. As you create content for future marketing campaigns, incorporate messaging that demonstrates your competitive advantage. Every web page, blog post, social media update, and other content forms should tie back to what you offer customers that they can’t find anywhere else: your competitive advantage.
Equally important is nurturing your competitive advantage. If people come to you because you have stellar online reviews, incentivize the task of rating and reviewing your company on Google, Facebook, Yelp and other platforms. Actively maintaining your competitive advantage ensures your business continues to deliver the benefits customers expect.
You also want to find ways to build on your competitive advantage. Returning to the example of the online reviews above, let’s say you have dozens of great reviews on Facebook, but you’d like to expand on your Google My Business listing with more user reviews. Provide a discount to return customers who post reviews on Google about you. That small discount now is an investment in the future of your business.
Track Your Efforts
As you market, nurture and expand your competitive advantage, measure the efficacy of your efforts. Before implementing new marketing content related to your competitive advantage, look at your digital metrics to establish a performance baseline. This data provides invaluable insights that should guide your work.
For instance, maybe users respond to the blog posts you publish that contain your valuable expertise. After spending time on the blog post itself, they navigate to other portions of your website and, ultimately, make a purchase. This data tells you that publishing similar blog posts generates a significant return on investment.
That same data might tell you that this blog content performed well on Twitter and LinkedIn, but received minimal engagement. In that case, you learn that your target audience prefers these social media sites, and you should focus your marketing campaigns there instead of Facebook.
Every small business owner needs to work through the process of identifying their competitive advantage and then leveraging it wherever possible. This is how small businesses develop into larger enterprises over time. If you’re looking for the answer to your small business marketing woes, lean on your competitive advantage!