“Why are you the best or why I should I use your services or products over your competition?”
Often, when I challenge our clients to explain to me what it is that separates them from the competition, they initially struggle to find the right words or impactful statements that convey their true benefit to their customer.
A competitive advantage distinguishes a company from its competitors. Establishing such an advantage should be one of the most important objectives of any organization. Companies must excel at finding ways to do things a new way so they stand out from the rest, but how does one go about doing so?
- Cost Leadership Strategy – This strategy is implemented by reducing costs and charging lower prices than the industry standard. Offering attractive affordable pricing is effective but this method can be easily duplicated or amplified by the competition.
- Differentiation Strategy– Companies using this strategy will leverage a unique skill/ability/feature of their product or service. Adding something extra that focuses specifically on a niche part of the market.
- Innovative Strategy– Doing things in new and different ways. Strategies like this will include product improvement(s), or a disruptive or breakthrough, offering benefits that currently cannot be matched by the competition.
“In today’s crowded marketplace, there’s no room for “ordinary” products or services anymore; either you’re remarkable or you die.” -Seth Godin
As Seth Godin explains in his book “Purple Cow”, it is of utmost importance that whatever strategy you choose that you stand out from the rest of the market. Emphasis on formulating key objectives by creating and evaluating a SWOT of the market helps in developing the organization’s competitive edge.
Establishing a competitive advantage helps to build brand, boosting awareness and the reputation that an organization is an industry leader. It makes sense to invest in the development of a proper strategy when you start comparing correlations from this recognition of value; improved customer loyalty, increased customer satisfaction and an escalation of referrals.
Gaining control over the elements that give you a competitive advantage starts with conducting a competition analysis. Next, is assessing and determining which area(s) the organization’s capabilities excel and then adapting and leveraging them based on the market’s demand. It is through this gathering of “Market Intelligence” that the best plan of action will emerge.