For small business, setting yourself apart from the competition is the key to success. So how do you identify your competitive advantage over other brands in your industry? Here are some concepts and ideas that will help you to define your small business in your market or community.
Define your brand. This concept of branding means defining what makes your small business unique. This is also about presenting a consistent message and telling your customers who you are and why they should do business with you. This step in the process helps you identify what aspects or characteristics of your business define your business in the minds of consumers and what differentiates it from other small businesses providing the same products or services.
Know why you should know your competition. Doing a comprehensive analysis of your competition will give you great insight into your market, local consumers, and where your small business fits within the business ecosystem of your community. This step in the process is usually part of an overall market analysis. Essentially, a competitive analysis identifies your competition by product, service, and market segment. This section should include elements like market share, strengths and weaknesses, barriers to entering a competitive market, the viability of your window of opportunity to enter the market, and any other barriers such as technology, personnel or investment.
Identify customer preferences. As a business owner, it’s important to identify who you would like as your customers. This means identifying the demographics or psychographics of your target customers. Find out your customer’s needs and wants. What do your customers really care about, and what motivates them to frequent any given business? How often do your customers make purchases at your place of business? What are your target customer’s current buying trends or habits?
Explore your personal preferences. Before coming up with a strategy to attract customers, revisit your own experiences as a consumer. While determining your advantages over other businesses, it is important that you think like a business owner. But you also have to occasionally put yourself in the shoes of a business customer and ask yourself why you like to do business with a given small business, and what it is about that business that attracts you. Attraction factors can include competitive pricing, a specific selection of products, customer service, and perceived personal relationships. You can also flip the script on this concept and evaluate the factors that make you choose not to frequent a business, such as poor customer service, poor stock, low quality, or high prices.
List strategies for gaining competitive advantage. By this point, you should have valuable insight to make important decisions, and should have the data that you need to craft a strategy for gaining competitive advantage in your market. First of all, it’s important to recognize that your small business is different. You cannot be everything to everybody, but you can establish your own unique identity and your own unique selling proposition. It’s also important in small business to be price-sensitive. This can be established in your community with coupons, sales, discounts or a loyalty program. Another factor that is important to customers is convenience. Choose a location that is accessible to customers and, if possible, provide online ordering and delivery. Be friendly to customers and provide excellent customer service and accessibility. Finally, you want to be specific about the products or services you deliver. Products should be innovative, durable, reliable and consistent from a reputable, recognized brand. Services should be consistent, reliable, competitively priced and meet a unique need in your community.
Implement your competitive strategy. In implementing your business strategy, keep in mind that you originally set a primary goal. Remember who your target audience is and put your focus on delivery of products or services instead of getting distracted with gimmicks or social media. Brag to the public about how proud you are of your unique offerings. While these strategies will likely lead to success, it’s also important to have a backup plan in the event unexpected competition arises.
Identify how you will remain unique. Remaining unique in your market or community is as important as creating your business strategy. It’s important to continually monitor trends in these areas:
- Lifestyle
- Technology
- The local and national economy
- Government trends, such as new laws, regulations, and taxes
