How I Find a Sustainable Competitive Advantage in Marketing Strategies
Today’s business environment is very competitive. It’s now a lot easier and cheaper to start a business, especially with technology making every step a lot faster and more efficient. A good example is online commerce. Even brick and mortar companies had transitioned to making online sales, especially when the COVID-19 pandemic caused several businesses to file bankruptcy, and many of those operating were hanging by a thread. This causes several industries to become saturated and even more challenging to stand out from the crowd if you aren’t a household name.
The challenge is to resist becoming like every other business in the same industry. One way to do that is to set your business apart from everyone else— by finding a competitive advantage. Many business owners know the importance of competitive advantage. Still, when I talk to them to discuss the long-term such as decades from now, I’m usually met with questioning eyes or vague answers.
It’s a lot more than just tactical advantages to win now and keeping the business afloat. What you want is a superior, favorable, long-term position over competitors that uses assets, attributes, or abilities that are difficult to duplicate or exceed. It has to be long-term, or it can easily be overturned, replicated, or lose its value over time.
The most basic level includes three key types of sustainable competitive advantage:
- Cost advantage: business competes on being the low-cost provider that can consistently build brand loyalty.
- Value advantage: business has a differentiated offering perceived to be of superior value.
- Focus advantage: a specific market niche with a tailored offering explicitly designed for that market segment.
However, most small businesses don’t have the buying capacity to compete on prices effectively and are not big enough to be al things to all customers in a market. To successfully compete, developing a sustainable competitive advantage based on providing superior value to a specific niche makes the most sense.
Now to help determine a sustainable competitive advantage, here are the things I look at:
Who are your customers?
Before diving deep into what a business’ competitive advantages are, the first thing I look it its customers.
Spray and pray doesn’t work. You need to discover who your customers are, how they perceive you, and how to segment them based on the features and benefits that they care about. The keyword is they, as in your clients. The underlying question is “what market am I trying to reach, and what specific segment am I trying to cater to?”
Examine the customer journey and the customer decision-making process. What makes them abandon their cart? What encourages them to proceed to a transaction? How were you able to upsell or cross-sell? This is also when you should assess how your audience interacts with your content at different touchpoints. What types of newsletters do they want to see? What sorts of promotions make them excited? How do they interact with your engagement campaigns?
Establish a value proposition that grabs their attention but also keeps that attention. It won’t matter if you piqued their interest if it doesn’t translate to the conversion you want.
Who are your competition?
You may know your business entirely, but knowing who the players are in the same field can make it easy to get ahead of them. You don’t see big household names and big brands stopping their marketing efforts. Coca-Cola for example, leads the market shares but continues to innovate and advertise, despite everyone knowing who they are.
As a business owner, you should also be able to predict your competitors’ responses to the actions and decisions you make. If you put out a 5% off, will they counter with a 10% off? If you share a post about ten benefits they’ll get when they buy your product, will they share a similar post, only with twelve benefits? If you put your item on the shelf of big retailers, what would they do next? If you release a new product line, what will they do next? Being able to predict their responses keeps you prepared. It makes sure that you have thought through your decisions and know how to adapt if the situation doesn’t go in your favor.
In the same way, when your customers act, how will you respond? Remember when KFC ran out of chicken in the UK? Several companies used that opportunity to market themselves, using the shortage to their advantage. How will you act on those kinds of opportunities?
Who are you?
It may come across as unnecessary to assess who you are. You know your business well even when you sleep. You can talk about your products all day and pride yourself in building them from scratch. And it’s that exact reason that you need to do this.
All the businesses I’ve owned and managed throughout the past years were a product of my efforts. The challenges I went through, the hurdles crossed, the big and small wins, all of it. But I have come to realize that it’s also that reason that I need to be more critical about assessing my businesses. I may have become too familiar that I forget to look at it from a fresh perspective, from a different angle, or simply even from the eyes of my customers.
Analyze your business position by assessing your essential competencies and weaknesses, core competencies, digital presence, customer lifetime value, conversion analysis. Where do you excel? Where do you need to improve? How do your customers perceive the business based on these factors?
Answering these guide questions lets you determine the targets of your marketing strategy. Overall, it also influence the sustainable competitive advantage that puts your business to the top. Addressing these concerns, identifying problems, and planning next steps can help you solidify your standing to your customers and your position in the industry.
Putting it all together
In this stage, it’s essential to make sure to challenge your initial assumptions. Put on the hat that contradicts all your ideas. Typically, I play the devil’s advocate when planning this with clients. I ask a ton of questions. I challenge every idea. I grill their logic and rationale. In the end, it narrows down the strategies that can be implemented, finetunes the details, and addresses any gaps that may not have been immediately noticed.
Your strategy should be agile so you can adjust to market shifts and demands. The keyword is strategic and not tactical. Think long-term, think how it can change and adapt based on internal and external factors within and outside the industry you’re in.
Once done, this is the time I help businesses come up with convergent viewpoints to stay ahead of the competition. Bringing together what you’ve analyzed so far, along with challenges and realizations you’ve observed, will be the determining factor of your marketing strategy. How you position your brand can make or break your business.
Predicting what happens in the next decade is extremely important once you’ve determined your sustainable competitive advantage because your competitors will also think about how they can take market shares from you and get your loyal customers. If you don’t adapt and stay ahead, then it won’t take long before someone else is ahead and your competitive advantage has been countered.
With the number of businesses I’ve built and acquired over the years, these strategies are proven and tested formulas to create a legacy that disrupts and sustains.
Want to find your business’ sustainable competitive advantage? Let’s discuss how we can turn your business into a disruptive one.
About Jeev
A serial entrepreneur with a rich history of launching disruptive online businesses and taking them to the top, Jeev owns dozens of “go-to” reviews and rankings websites. Jeev has invested more than 20 years researching human behavior and how to leverage different sales methodologies to effectively influence decision-makers.To find out how Jeev can help you, visit jeevtrika.com.