What differentiates your business from your competitors’? Most businesses are formed, in part, on the proposition that they have a competitive advantage that sets them apart from the crowd.
It may be a higher quality, a better price, or better customer service and support. Whatever it is, you should identify it and be able to articulate it if you hope to survive in today’s highly competitive business landscape.
In order to identify your own competitive advantage, you’ll need to become familiar with your competitors. Simply assuming your prices, service or products are superior to your competitors’ is a recipe for disaster.
If you haven’t already done so, you should research your competitors and see how you stack up against them in every aspect. Then compare them to your business in order to identify what makes your business the better choice.
Here are some areas to compare:
Quality: Although having superior quality products and services is an obvious advantage, it can also be difficult to prove. Besides, businesses typically use superlatives when describing themselves – so much so, that many consumers have become immune to the claims. If your products or services of significantly higher quality than your competitor’s, you should definitely share that information with your prospects, but be prepared to back up your claims with supporting data.
Price: Contrary to what many believe, having the lowest price isn’t always a good thing. In some cases, offering the lowest price will make buyers question what you might be skimping on in order to achieve your discounted rate. Depending on the products or services you sell, prospects may equate low price with inferior quality or substandard support after the sale. If, on the other hand, your competitors have simply over-priced their products or services, undercutting them can be a powerful competitive advantage provided you’re able to demonstrate that your customers receive the same or higher level of quality and support after the sale.
Target Market: Another area for comparison is your target market. Do your competitors market to the same audience as you do? Look at all the variables including geographic location, age, gender and many others. Having bilingual sales and service people has become a powerful competitive advantage for businesses looking to serve the growing Hispanic population in the U.S.
Convenience and Ease of Use: Whether you’re in the B2B or B2C sector, customers like doing business with companies that make it easy for them. Are your products easier to use than your competitor’s products? What about your business hours? Do you offer emergency support services after hours? How does your response time and customer service stack up against the competition? These are all things to consider when determining your competitive advantage.
Reputation: Depending on the size of your market or industry, you may find that the differences between your business and the competition are actually quite small. In such cases, having a good reputation can be a powerful competitive advantage. Longevity is a strong selling point. People are more apt to do business with companies that have a track record. Consumers are also increasingly concerned about doing business with socially responsible companies. More and more businesses are promoting themselves as environmentally-friendly or “green”. Being involved in activities that benefit your local community can also deliver an attractive return on investment.
Once you’ve determined your competitive advantage – promote it! You should make it a cornerstone of your marketing and advertising efforts. Some of the most successful names in business clearly state their competitive advantage in their logos and slogans.