Your competitive advantage is how customers see you in the marketplace compared to your competition. Are you faster, more expensive, or less expensive? Do you have a wider range of products or services, or do you specialize with fewer options? Is it your own unique personality that attracts buyers, or is it your employees or your location?
Knowing your competitive advantage is essential to business survival, because you can clearly tell the marketplace why it should choose you over your competitors. Here are three steps to figure out what that advantage really is, and build it up even more.
Analyze your product or service
Consider what makes your product or service better than the competition’s. You need to identify why a customer would choose your offering over a competing one. Are you:
- Offering better quality?
- Faster than competitors?
- Less expensive/more expensive?
- Offering a unique experience that’s just different?
- More reliable/trustworthy/established?
- Giving the customers access to your patented process, intellectual property, or innovative technology that they can’t get elsewhere?
If you do not have a product or service that is better in some way than other options in the market, it is going to be very difficult to convince people to buy from you.
Complete a market SWOT analysis
A SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) can help you gain an overview of your business and visualize more clearly where you and your competitors fit in your selected market. Completing the analysis can help you identify which type of competitive advantage you can explore and promote. Search online for examples of SWOT analysis.
Build your competitive advantage
The analysis might show you that you have some areas for improvement. Consider making efforts in these areas to improve your competitive advantage and really stand out:
- Hire awesome staff. It’s your team that will make a difference.
- Get a great location. It’s critical for retailers.
- Offer unique or exclusive products. Deliver something the competition cannot.
- Build a stunning website. A website that is more attractive or easier to navigate can be a distinct advantage over competitors.
- Become a star. Speak to the media, at conferences, and local events.
- Be an expert. Brush up on your technical knowledge so you know more about what you do than the other folks.
- Get to know your suppliers. Lock in your suppliers and access better deals.
- Form strategic alliances and joint ventures. Team up with noncompeting businesses trying to reach your target market.
For even more ideas to support the success of your small business, download the Small Business Survival Toolkit!