Every business, large or small, needs something to make themselves stand out. Disney, for example, stands above virtually every other entertainment content provider due to the sheer ubiquity of the brand’s intellectual property. Everyone from Seattle to Seoul can identify the Mickey Mouse ears, Star Wars characters, or any other copyrighted cartoon character related to Disney. While not every brand has universal recognition, in order to succeed in an uber-competitive marketplace every brand needs a clear competitive advantage.
What is a Competitive Advantage?
Similar to a point of differentiation, a competitive advantage is something you have that your competition doesn’t. It’s an attribute that differentiates the goods and/or services of your business from those of your competitors. Maybe you can produce a popular product faster or more cheaply than the other businesses in your area. Or maybe you’ve been in business longer than anyone else.
Whatever the case, there are three basic types of competitive advantage: price, product/service differentiation, and niche strategies. Because price is still the most important purchasing factor for consumers, if you can offer higher quality products at a lower price, you have your competitive advantage. But given the supply chain issues of the past year and the upward trend of pricing across the board, brands need to look elsewhere to find marketable advantages.
For example, because the pandemic of 2020 shuttered many brick-and-mortar retail locations, businesses have had to implement ecommerce storefronts. Many small businesses had to do so virtually overnight. The challenge was compounded by having to compete with mega-retailers who offered free shipping, sometimes in as little as a few days. That meant business owners had to come up with creative solutions, like offering more value, enhanced loyalty programs, and unique products.
Why Does it Matter?
The more competitive advantages your business has, the more powerful your brand becomes. That means you’ll have a more fiercely loyal customer base, generate more value for your shareholders, and be able to charge higher prices for your goods and services. Furthermore, if done right, it can’t be duplicated. That means once you’ve firmly established your competitive advantages, they’re yours for the keeping.
Why is McDonald’s so successful? Because of their competitive advantage. The brand is able to mass-produce products at a lower price point than its competitors. That means it appeals to customers around the globe who want a quick, easy, affordable meal. Again, McDonald’s established this key advantage years ago, and remains the number 1 fast-food chain in America.
Your competitive advantage matters because it allows you to focus your business and marketing strategies around attribute(s) that appeal to your customer base. In other words, not only will your word-of-mouth marketing efforts improve, your overall business will improve. You’ll be able to offer more value and incentive for folks to do business with you, which means not only more customers, but an easier time gaining new ones.
How to Find Your Competitive Advantage
Analysis is key to introspection. Chances are, you’ve already identified something your business does better than your competitors. If not, analyze your strengths and weaknesses and those of your closest competition. It could even be something as simple as having more friendly, helpful sales representatives. In any case, a viable internal strength is something you can use in your marketing efforts.
If you’re still struggling, try to see things from the eyes of the customer. Apart from price, what are they looking for in a business transaction? If you can’t provide superior tangibles, like price, quality, or speed, strive to provide the intangibles, like experience or kindness.
When you’ve found what you do better than anyone else, make it the focus of your marketing efforts. Remember, in many cases, your customers are looking for more than just a business transaction. If you can provide them more than transitive value, they’re many times more likely to come back.