In a world in which few businesses offer a completely unique product or service, it’s often difficult to identify why your prospective customers should choose you over someone else. And knowing that is vital for a successful marketing strategy.
For this reason, it’s necessary to have a clearly defined competitive advantage, so your customers understand what differentiates your business. You may know instinctively what makes you stand out from the rest, but this won’t bring your marketing the attention and focus you need (or the results).
Defining your competitive advantage removes the guesswork for your customers.
Identifying Unique Selling Propositions
To find out what your competitive advantage is, start by identifying the unique selling points (USPs) of your product or service. These typically include items such as:
- Low price points – think No Frills compared with Longos (cost advantage)
- Specific expertise and experience, such as knowledge of a discipline like Change Management (differentiation advantage)
- Value-added services, e.g. car servicing that comes with a free interior valet cleaning (differentiation advantage)
- Personal attention, where you are serviced by the owner/expert or senior management team (differentiation advantage)
- Credit facilities / payment plans – think of car dealerships and their ongoing efforts to outdo each other on deals (differentiation advantage)
Your company could offer any number of possible USPs at any given time. As you can see from the list above, a competitive advantage is either a cost or a differentiation option. It needs to have a narrow focus, however, so choose one (or a combination of two intersecting USPs) to develop further.
Outline the Competitive Edge
Choose the USP that you believe is the strongest for your target market. What is the main reason you beat out your competition? This isn’t about you or your business; it’s about your customers. Instead of identifying the competitors you’re better than, identify the customers for whom your company is the only answer. This usually takes you into a much tighter niche focus than you might currently hold, but that’s fine. To succeed in the cutthroat world of business, you don’t want to be an “also-ran” or a “me too” supplier, you want to be the only choice for your customers.
Make it Part of Your Narrative
Trying to tell prospective clients everything you do is a common marketing mistake. It’s the old “features vs. benefits” that you learnt in Marketing 101, but plenty of companies still do it. It’s not the “what” that counts as much as the “why,” and when you have a clearly defined competitive advantage it’s likely to be more of a “why” than anything else. So instead of marketing your products or services, develop a company narrative that focuses on why customers should choose you and presents your competitive advantage as the reason.
Develop Your Brand Around Your Advantage
Once you have a clearly defined competitive advantage, you can use it to inform your strategic marketing plan and develop your brand around it. For example, No Frills’ entire brand revolves around the company’s cost advantage. Its tagline is “lower food prices” and when you visit the website you’re taken directly to a store locator landing page. No mess, no fuss. No frills. No fancy website. Lower food prices as a result. A marketing strategy that has paid off since the start of the economic downturn, and is still doing so.
Your company might not be a huge food chain, but the principle of focusing on your competitive advantage is a cornerstone of a business marketing strategy, so the sooner you define yours clearly, the faster you can start using it as the basis of your brand.
Related posts: Competitive Advantage: How to Outsmart Your Competitors