Identifying Your Advantage
A competitive advantage is something you are better at than anyone else. The smarter you can be about developing and promoting your competitive advantage, the better positioned your business will be to succeed. Think about a few ways you could 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 because larger business can usually get bulk deals and compete on price. Being the cheapest provider is the easiest tactic to implement (just reduce all your prices), but this is usually the last thing you want to compete on, as it is often a losing strategy. The chances that you can be the cheapest and survive are not good because you will usually be competing against companies with far more financial muscle than you.
Maximizing your margins is your ultimate goal. You can position yourself away from the cheap end of the market as long as you develop other competitive advantages, such as excellent, friendly service, good after-sales service, a more specialized range of products, more knowledgeable staff, and so on.
10 Ideas to Develop Your Competitive Advantage
1. Awesome team members
One of your best (or worst) competitive advantages will be your team. The advantage of having friendly, knowledgeable, proactive team members should never be underestimated. The key is to make sure that your team members are motivated, trained and perform well. Do this by:
- Establishing clear performance standards.
- Mystery shopping the standards.
- Starting incentive plans.
- Sending them to training courses.
- Encouraging them to develop their product/service knowledge.
- Providing ongoing sales training.
2. Location, location, location
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?
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. A great website
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?
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:
- A signed mission statement in view of the public.
- Signing your name at the end of all newsletters and correspondence.
- Offering personal guarantees.
- Becoming prominent in your community.
- Becoming an authority in your field and a spokesperson for the industry.
6. Brush up on your technical knowledge
If your small business can’t compete on price, then offer superior knowledge to the other businesses around you. Consequently, you should make sure team members are well trained. If you’re selling specialized equipment, for example, ask your suppliers to provide training.
7. Get to know your suppliers
Being on good terms with your suppliers and their sales representatives is an often-overlooked competitive advantage over other businesses that haven’t bothered to develop a relationship. A good supplier relationship will provide:
- Better service and support. You might get promotional material, displays and signs, plus training for your staff.
- Better supply and faster delivery.
- Better 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 that they do most of the market research, develop new products, conduct customer analysis and provide nation-wide branding and advertising that enhances your credibility. An independent will find it more difficult to compete with you.
8. Display your other 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 to be aware of your competitive advantages automatically . You have to advertise and promote them.
9. Strategic alliances and joint ventures
One of the best ways to compete against larger businesses is to form alliances and joint ventures with other businesses. For example, by banding together with other businesses in your industry, you can often gain better group discounts from suppliers than you would if you ordered on your own.
Joint venture marketing is another way of sharing advertising costs. An example is a group of shops in a location (such as a mall) joining together to produce an advertising supplement. But there are many variations on this theme you can brainstorm with your team. The ability to form smart alliances and joint ventures is an increasingly important and distinguishing feature in the success of many businesses.
10. Speed
People want quick service, so the faster you can deliver your product or service the better. Hold regular team meetings to brainstorm ways to streamline your business processes and fulfill or exceed customer requirements without sacrificing quality of delivery.
Banking Advantage
When it comes to business banking, let Bank Independent be your competitive edge. We offer a variety of distinctive deposit accounts to meet your business checking and savings needs and Sync Mobile and online banking to provide outstanding convenience, accessibility and security.
In need of Cash Management? Our non-commissioned Treasury Solutions team sets up and fully supports systems to automate, simplify and manage your business transactions, including:
- ACH funds transfer
- Remote deposit capture
- Mobile Deposit for business
- Sweep services
- Wire transfers
- QuickBooks Direct Connect
- Positive Pay
