By Paul Hendrickson –
Whether coaching a sports team, marketing your business, or interviewing for a new job, it is important to know your competitive advantage.
Put simply, your competitive advantage is the thing that makes you better than your competition. It is unlikely you or your business excel at everything, but there are things you do better than other individuals or businesses. It is worth your time to discover your competitive advantage and capitalize on it as well.
In the business realm companies spend a great deal of time (and money) trying to articulate and sustain their competitive advantage. Why? The answer is simple. They know their competitive advantage, properly marketed, will drive customers to their product or service. They still have to deliver in other areas where they may be weaker, but they will consistently point potential customers back to what sets them apart from their competition.
Examples of Competitive Advantage
The list of ways a company may have an advantage over its competition is endless, but here are a few common examples.
- Lower Cost
- Higher Quality
- Faster to Market
- More Experience
- Better Location
- More Efficient Process
- Higher Customer Satisfaction
- More Intellectual Property
- Greater Diversity of Options
Discovering Your Competitive Advantage
You may not be in a position to hire a marketing consultant to help define and promote your competitive advantage, but by answering the following questions you should be on the right path. Note that some of these will require a customer survey or Q&A session with individual clients.
- Who is our competition?
- What do we think our business does better than our competition?
- What do our customers think we do better than our competition?
- What do we think our competition does better than us?
- Which of our products or services do our customers purchase more than others and why?
- What resources do we have that others do not possess?
- What strengths do we bring to our industry?
- Once identified, how can we maintain our competitive advantage?
What Next?
Once you have taken some time to assess your business and determine your competitive advantage, share it with the rest of your organization. All team members should understand what makes your business better than its competition. It is also important for them to know areas where improvement is required. As you develop new marketing materials, keep your competitive advantage in mind. If, for example, your company is the low-cost leader in your industry, don’t be afraid to let potential customers know via your website, mailers, and other marketing collateral. Finally, remember to update your business plan if you have one. A business plan is a living document that explains what your business provides, how it provides it, and future plans and strategies.
You don’t have a business plan? Let’s talk. I know a guy.