Build your competitive advantage
A competitive advantage is what you are better at doing than anyone else. The smarter you can be about developing and promoting your competitive advantage, the better placed your business will be to succeed. Think about how you can differentiate yourself:
- low pricing - you're able to supply the cheapest product
- specialization - you service a specific niche market better than anyone else
- differentiation - you have the same product or service as others, but you make it different
Specialization and differentiation are the most common small business strategies, usually because larger businesses are able to compete better on price with their volume buying discounts.
Nine ideas for building your competitive advantage
1. Awesome staff
The advantage of having friendly, knowledgeable, proactive staff must never be underestimated. The key is to make sure that your staff are motivated, trained and perform well. Do this by:
- establishing clear performance standards
- mystery shopping the standards
- starting incentive schemes
- sending them to training courses
- encouraging them to develop their product/service knowledge
This advantage is most critical for retailers. If you don’t have a good location, can you move or get the business out to the customers with business-to-business accounts, free pick-up and delivery, drop-off points or wholesaling through businesses with better locations? Online selling has the potential to dilute the importance of location, but for many businesses the location is intrinsic to the business (for example tourism, hospitality).
3. Unique or exclusive products
You have an advantage if you can source product or deliver services that the competition cannot. If you’re competing against larger or similar businesses, can you establish a reputation for unique products people can’t find anywhere else?
4. Online user experience
A website that is more attractive or easier to navigate than competitors can be a distinct advantage. Can you create a better, easier, online shopping experience? More competitive shipping options, online discounts?
Developing a better content marketing strategy (white papers, videos, infographics, articles) may generate more qualified leads, while a strong social media presence can lock in your customers.
5. Become a star
Your own image can be a competitive advantage. No one else has quite your mix of skills, and you can build a ‘character owner’ image by having your name on as much material as possible, including:
- writing (or having others write) thought leadership content and whitepapers
- publish a book on your industry
- participate in online communities
- speak at conferences and events (physical and virtual)
- blog, post, comment
- become an authority in your field and a spokesperson for the industry
6. Partner with your suppliers
Being on good terms with your suppliers and their sales representatives is an often-overlooked competitive advantage. A great relationship can provide:
- better service and support. You might get promotional material, displays and signs, plus training for your staff
- faster delivery
- more generous return policy and customer support
- early notification of specials or discounts
Being linked to a large, well-known supplier is a definite competitive advantage. You might find they help you with market research, new products, customer analysis and nation-wide branding and advertising that enhances your credibility. An independent will find it more difficult to compete with you.
7. Promote all your services
To gain an advantage, offer things that the competitors don’t, especially if they cost very little. Sometimes this may simply involve displaying a list of what you already do for customers, but the majority may have been unaware of. Don't simply expect customers automatically to be aware of your competitive advantages. You must advertise and promote them.
8. Strategic alliances and joint ventures
One of the best ways to compete against larger businesses is to collaborate with other businesses. You could band together with similar businesses to form a buying group to access volume discounts or share advertising costs when promoting your industry. Other forms of collaboration include:
- promoting in e-newsletters
- sharing resources and staff
- joining together to pitch for work
- formalizing referrals
The ability to form partnerships is an increasingly important and distinguishing feature in the success of many businesses.
People want quick service, so the faster you can deliver your product or service the better. Hold regular staff meetings on how to streamline your business processes and fulfill or exceed customer requirements without sacrificing quality of delivery.