In a previous blog post, we pointed out the importance of clearly and specifically pointing out how you differentiate yourself from another small business. This difference is known as your unique competitive advantage. This week, we’re showing you exactly what you need to do to figure out what makes you special and different from those around you.
Make a list.
Yes, it’s that simple. Take out a sheet of paper and write down every advantage you can think of as to why as to why someone should do business with you. Get a big list. Don’t worry about whether your competitors can offer the same advantages at this time. Just get some points down on paper. Think in terms of how your small business might fit in the following categories:
1. The name of your small business.
Does it say what you do and position you in such a way there can be no mistake? Can there be any doubt what kind of business “The Hair Club for Men” is in? As another example, if you didn’t know it was a men’s clothing store, what would you think “The Men’s Warehouse” sold … men? What about your business? Can you use the name as an advantage, or can you come up with a helpful tagline or description to help identify the type of services you provide?
2. Exclusive niche.
Are you trying to be all things to all people? Or do you occupy and dominate (or at least have the potential to dominate) a certain market? The tighter a group you can cater to, the more control you’ll have and the more opportunity you can have to dominate and control it.
Do you have some type of specialized understanding of a particular market segment so you can become a recognized expert? If you do, when people look to you for help and expertise they can’t get anywhere else, you’ll have a tremendous advantage.
If you have an unusual guarantee, you can use that as a competitive advantage for your small business. We’ll discuss the concept of “risk reversal” and guarantees later.
5. Market positioning.
How are you viewed in your marketplace? How do you stack up against your competition? What is your market’s perception of you versus other competing businesses? Domino’s didn’t go head to head with other pizza shops trying to make a better pizza. Instead, they went after quick, in-home delivery, and nearly dominated a market in a very short time.
How are your prices compared to those charged by your competitors? Do you have the lowest prices for your services and do business as a “discount” operation? Or, do you take a higher price-point position and operate at a more “exclusive” level? Either position can be an advantage depending on how you position your business and the services you sell around it.
Segregate your list into three groups:
1. Those exclusive to you or your small business. (Your competition cannot offer these). 2. Those that both you and your competition can offer. 3. Those that both you and your competition currently offer but which they are not capitalizing on presently.
The best advantage you can gain will be from those in Group 1, those areas in which your competitors cannot perform. These are things only you can do for whatever reason, and you will want to capitalize on them to your fullest advantage.
Group 2 lists things offered both by you and others. Don’t neglect these. While they’ll be the weakest of the three groups, with a little work and creativity, you may be able to combine parts of these with those you have identified in the other groups.
The last group, Group 3, can be used to a real advantage. But you must be careful. While your competitors aren’t currently using these, if they notice you are beginning to use them, you may awaken a hornet’s nest. They may see what you’re doing, recognize they too can offer the same advantages, and begin including them in their promotions.
VisionPATH Business Solutions offers personalized consulting and advisory services to companies large and small. We have a long-standing reputation of providing honest, individualized advice to our clients. No matter your need, whether it is to capture new market share, to streamline processes and cut costs or to add services and grow you business, you can rely on VisionPATH to provide you with honest advice to help you achieve your goals.