You are in business to make profits. Yet, to make profits, you must position your business for unfair advantages. Unfair advantages are advantages that are inaccessible to your competition. Ask yourself why the best ideas often flop or how average people can enjoy resounding success.
Competitive advantage is at the heart of standing out in business. A few ways to keep the competition behind include:
1. Pick a niche
It can be tempting to provide a broad range of services or products. This appears to give your brand the widest reach, but is not exactly true! You easily lose focus and spread your operations too thin. Why not channel your energies to a specific segment of the market? Only when you have gained credibility there, should you consider diversifying.
A small business often competes against bigger, more established brands. The way to win this fight is to attack strategically, winning key territory as you go along. Focus on your basic consumer demographic. This will earn you quick sales and revenue that enhance your ability to market and grow your following.
Dietrich Mateschitz did this with Red Bull. There was no specific market in mind and sales made little sense in the face of zero competition. Consumers struggled to say if Red Bull was a soft drink or sports stimulant. Mr Mateschitz reworked his strategy and defined his target–students.
All marketing resources were thrown at them–sponsorship, social media campaigns, you name it. The result? Sales exploded and inevitable growth happened. The best part? Red Bull earned a deserved loyal following, with a 50% market share in Canada and 46% in the US as of 2011.
Grab a niche and own it. Find untapped categories in your market; they always exist. Sell to that customer and grow from that base.
2. Knowing your strengths and playing to them
Truth be told, your competition is better some things than you are. In the same way, there are key areas in which your business is superior to theirs. Let’s assume your competition has a better product offered at a lower price point. Do you throw in the towel without a fight?
You need to realise this: no matter your limitations, you can still beat your competition. Find out where your brand excels. Your company can outperform on those points. These are simple things like customer service or brand consistency. They are the little elements that make a world of difference.
In identifying your strengths, you need to engage the power of storytelling. To consumers, every business exists to solve their problems. If it does not, it holds little value for them. What is your competitive angle? Why not flaunt it?
Telling a story in a way that matters to your customer gives you the edge to win them. This angle (your story) is the reason you started your business (your origin); the value your offerings provide–product story. Once you embrace and find your angle, your story can take any of the following shapes:
- Premium Customer Service
- Exciting custom packaging
- Eco-friendly products
- Rockstar team
- Shipping options
You need to tell your customers why you are the preferred option. Apple and Sony use innovation as a competitive angle and this reflects in their marketing.
3. Streamline your operations
Your company must continually ask how it can maximise value and minimise waste. Value and waste cannot co-exist. A customer pays for features that matter to them. This is value. Anything else is waste. Technology can help you at every point of business to make you flexible and more reactive than your competitors. Using a cloud storage system can massively increase the data capability of your business, and allow you to access your files remotely, if necessary.
To determine your customers’ concept of value, engage them. Understand what makes them desire your product. Understand why they crave the competition’s products. If your clients do not desire a feature, it should not be part of your product.
4. Are your products worth the hype?
Human attention spans have continued to drop over the years. Microsoft has research to back this up. You have little time to show your customer your product is worth their attention now.
Your website copy should make promises focused on value and your products and services must be designed with the customer in mind, showcasing a clear difference from competitors’. If the customer is not a priority in your process, you stand every chance of losing them.
Cheaper + Better + Different is a tested product design formula that wins customers by hooking them as revolutionary and valuable.
5. Pursue large clients
Large-volume business comes from big clients. A big client base represents more business and higher revenues. Small businesses on the other hand, have more service issues than larger corporations who have well-defined systems in place.
Remember too, that your firm’s credibility is underlined by working with large brands. It easily becomes a huge selling point as you go to win business woo new clients. Large companies aren’t as unapproachable as you might believe. Your small size works in your favour, letting you move more quickly. You can continually innovate by thinking outside the box like entrepreneur David Zhao.
6. Know your numbers
You cannot afford to be in business and not know your numbers. These numbers determine the fate of your brand. Simple indices you cannot afford to ignore are:
ACV (Average Customer Value)–how much does the average customer spend over a given period?
CPA (Cost Per Acquisition)–what does it cost each time you to acquire a client?
ROI (Return on Investment)–how rewarding is each marketing campaign?
BE (Break even)–what volume of sales must your brand make to cover the cost of making sales?
Tracking these numbers will place you on a proactive pedestal such that you tweak your operations to improve them. Small improvements can easily put you miles ahead of your competition. Business is a game where you always want to come out on top, and true business satisfaction is not found in being content with crumbs.
7. Make relationships count!
A small business can enjoy the benefit of a personal relationship with customers. Bottlenecks and undue formality can choke your human element which many customers value, out of your buyer journey. Large businesses know extreme bureaucracy utterly hurts profits.
You can have the best of all worlds by planting a system that delivers better experiences and exceeds customer expectations. Responding timely to emails and requests may seem trivial, but they work wonders, just as “Thank you” notes and customer complaint resolutions mean the world to customers.
These are the elements that enhance your word-of-mouth marketing, online reviews, and social media ratings. StreetTalkLive has a wealth of material to educate you on the preferences of your individual customer.
Edging out the competition is a lifelong endeavour. The strategies outlined above should be adequately adapted to suit your situation.