Business Survival 101: Your Competitive Advantage
Business Survival 101: Your Competitive Advantage
All marketing and sales strategy is based on differentiation. It is based on showing your customers exactly how your products and services are different from and better than any other competitive products or services offered in the marketplace.
What is your competitive advantage?
What do you do or offer that makes your products or services superior to those of your competitors?
What is your area of excellence?
Competitive Advantage: Why Is It Important?
To survive and grow, every product and service offering must have some clear, distinct competitive advantage over its competitors in the marketplace.
Competitive advantage is the key to sales success and high profitability. It is absolutely essential that you are excellent in some specific area that customers value. You have to be able to say to your customers, “We offer the very best for you in this critical area.”
Everyone in your organization should know exactly where, why and how your company and product or service are superior to every other competitor in the market. If you are not clearly superior to your competitors somewhere and somehow in a market-specific area, then all that you can hope for is survival, if that.
Differentiation Strategies: Make Your Products Different
Differentiation strategies make your product offerings stand out from your competitors’ products in a way that your customers will say: “This is a better product or service for me than anything else that is being offered.”
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You define your competitive advantage, the reason for buying your products or services, in terms of the benefits, results or outcomes that your customer will enjoy from purchasing your product or service that they would not fully enjoy from purchasing the product or service of your competitor.
Discovering, developing, and promoting your “area of uniqueness” is the most vital factor in market leadership and superior profitability. This is sometimes called your “unique selling proposition.” It is something that you offer that your customer values, that no other competitor can offer, and that makes your product or service a more attractive choice than anything else that is available.
Competitive Advantage: The Importance of Clarity
Clarity is the most important word in this area. What is your competitive advantage today? What will your competitive advantage be in the future? What should your competitive advantage be if you want to stand out from your competitors? What could your competitive advantage be if you want to lead your industry in sales and profitability? And most important, what changes will you have to make immediately to develop and maintain a competitive advantage that enables you to achieve market supremacy?
Your Unique Selling Proposition: The Top 20% of Businesses
This unique selling proposition should be made clear in all of your promotional materials. It becomes the heart or core of all of your advertising and marketing efforts. It is the single message that you strive to convey to your potential customers in every way possible.
Marketing success comes from your continually thinking about achieving and maintaining a sustainable competitive advantage. This is the critical focus of every successful business. All companies that achieve clear differentiation from their competition, eventually move up into the top 20 percent.
If you do not have a competitive advantage, if your product or service is a “me too” product or service, then the only way that you can sell it is by reducing the price. Soon you enter into the other 80 percent of businesses who are also racing to the bottom by reducing the price. At the end of the day, there is little or no profit for anyone. Most of these companies eventually go out of business because they cannot survive.
Convincing Your Customers That Your Product is Superior
When customers buy a product or service, at the moment of purchase, they are convinced that this product or service is superior to any other competitive offering and is, therefore, the best choice for them. This conclusion may be based on reality or on perceptions created by advertising, promotion, or other factors. But every customer buys only when he or she is convinced that their purchase is the very best decision that they can make at that time, all things considered.
The best strategy for you and your company is to focus on improving the quality of your product or service so that it is universally recognized as being superior to anything else available. Once you have achieved this perception, you will sell more, at higher prices, easier, at a lower cost of customer acquisition, and will enjoy greater repeat sales and referrals than with any other strategy.
