A competitive advantage has three pre-requisites – otherwise it doesn’t count.
- Must be objective. This means that it’s a statement of fact; 3 locations, open 24 hours, etc. If you think about it, it’s kind of like a “feature” of your business.
- Must be quantitative. Specify how much, how many of anything you’ve got as a feature. In the example above we made some specifics here are a few more: each service representative has at least 20 hours of training (specify what kind), your pizza delivered in 30 minutes or less or it’s free.
- Not claimed by any other competitor. This is where it gets tricky, your competitive advantage could truly be something that no one else is doing OR it can be something that they are not claiming – or focusing on. This gives you a lot of creativity.
- No cliche. Stay away from empty phrases like “your solution provider.”
Uncovering Your Competitive Advantage Will Give Your Customer a Reason to Choose You
What if you could increase sales by simply setting yourself apart from the competition with some quantitative, relevent elements that your customer cares about?
It’s clear that finding a competitive advantage is exactly that — a search. Sometimes what sets you apart is clear and sometimes it requires a little digging and soul searching. As I go through the “Creating Competitive Advantage” book by Jaynie L. Smith, It’s clear to me that this search is a kind of journey into facts, history and circumstance.
A Real Example of How a Business Used Their Competitive Advantage
Here’s a competitive advantage by JTECH (the company responsible for those beepers you get at your restaurant that tells you that your order or table is ready).
“Of the fifty largest chains who use paging, 100% use JTECH”
JTECH was the first in this market, and so it’s no surprise that they can make this claim. This competitive advantage is rooted in facts surrounding your customer base and your penetration of the market.
Questions that Uncover Competitive Advantage
- Are you the first in your market or industry to do something?
- When you make a list of the leading customers in that industry, how many of them are on your customer list?
- If you are first or your product is relatively new, your customers may have some fear around risk involved, think about alleviating this fear by saying something about who your customers are or their experience.
Where to Find Competitive Advantage
- Cost reduction (think Wal-Mart. You’ve got to be better and cheaper and have the systems to pull it off – that’s a hard one.)
- Technology. If you’ve got something innovative that meets a customer need – search here.
- Customer Intimacy. There is a lot of opportunity here because the possibilities are endless – it all depends on who your customer is and what’s important to them. Unless you obviously fall into the previous two categories, this is a great place to start.
Competitive Advantage Step-by-Step
- Start your own list of what’s important to your customer. Just brainstorm it and use real words that they might say themselves – remember cliches are a “no-no”. Challenge yourself and make a list of the top 13 items that are important to your customer.
- Using a simple online survey software (I prefer QuestionPro, but you might also like Survey Monkey) I would create blind survey and test for what’s really important to them. A blind survey means that you use an outside party, run the research as “industry” research and see what’s really important to your customers and how they rate their alternatives.
- Use this information to dig deeper into your internal facts and figures and see what you come up with.
Start With a List of Features
To get your brain bubbling take a moment and list as many “factual features” of your business. Aim for a list of 49!
Here are a few areas to get you started:
- How would you respond to your customer when they ask “Why should I buy from you?”
- What’s most important to your customer when they are buying what you are selling?
- What features of your business give the customer what’s most important to them?
- In what ways does your business deliver what’s most important to your customer?
This is just a short list of thought starters – spend about 45 minutes on this exercise.
Are you stuck on this? That’s totally normal… here are a few brain-busters to get you started again.
- Draw a picture (stick figures are great) of your customer at the moment when their mind should be triggered to contact you. What’s happening, where are they? In what ways can you be “present” to remind them that there is a solution?
- Go outside for 10 minutes with a notebook. Walk around and note the first thing you see. Now make a list of all the ways that this item reminds you of the reason your customer chooses you.
Finding your competitive advantage isn’t always easy. You may have to do a lot of digging into data, customer feedback and competitive research. But in the end, you’ll walk away from the experience with the ONE thing that makes you different. And that will help you attract more customers.