Ten ideas to build competitive advantage

There must be some compelling reason for people to do business with you rather than with other businesses so they need to have a clear differentiator is important. The more similar your small business is to others, the greater your need to develop a competitive advantage to differentiate.

1. Awesome staff

One of your best competitive advantages will be your staff. The advantage of having friendly, knowledgeable, proactive staff must never be underestimated. The key is to make sure that your staff are motivated, trained and perform well. Do this by:

  • Establishing clear performance standards.
  • Mystery shopping the standards.
  • Starting incentive schemes.
  • Sending them on training courses.
  • Encouraging them to develop their product/service knowledge.
  • Holding yearly selling courses.

2. Location

Convenience and a location close to your customers is still important for many businesses (retailers and service providers). A great location can also be blended with direct services such as business-to-business accounts, free pick-up and delivery, drop-off points, wholesaling through businesses with better locations and of course online delivery.

3. Unique or exclusive products

You have an advantage if you can source products or deliver services that the competition cannot. If you’re competing against larger or similar businesses, establish a reputation for unique products people can’t find anywhere else.

4. A great website

A website that is more attractive or easier to navigate than competitors can be a distinct advantage. Can you create a better, easier, online shopping experience? More competitive shipping options, online discounts?

5. Become an expert

Your own image can be a competitive advantage. No one else has quite your mix of skills and you can build a ‘character owner’ image by having your name on as much material as possible, including:

  • A signed mission statement in view of the public.
  • Signing your name at the end of all newsletters and correspondence.
  • Offering personal guarantees.
  • Becoming prominent in your community.
  • Becoming an authority in your field and a spokesperson for the industry.

6. Promote your technical knowledge

If your small business can’t compete on price then offer superior knowledge to the other businesses around you. Consequently, you should make sure staff are well trained. If you’re selling specialized equipment, for example, ask your suppliers to provide training.

7. Get to know your suppliers

Being on good terms with your suppliers and their sales representatives is an often-overlooked competitive advantage over other businesses that haven’t bothered to develop this closeness. A good relationship will provide:

  • Better service and support. You might get promotional material, displays and signs, plus training for your staff.
  • Better supply and faster delivery.
  • Better return policy and customer support.
  • Early notification of specials or discounts.

Being linked to a large, well-known supplier is a definite competitive advantage. You might find that they do most of the market research, develop new products, conduct customer analysis and provide nation-wide branding and advertising that enhances your credibility. An independent will find it more difficult to compete with you.

8. Display your other services

To gain an advantage, offer things that the competitors don’t, especially if they cost very little. Sometimes this may simply involve displaying a list of what you already do for customers, but the majority may have been unaware of. Don't simply expect customers automatically to be aware of your competitive advantages. You must advertise and promote them.

9. Strategic alliances and joint ventures

One of the best ways to compete against larger businesses is to form alliances and joint ventures with other businesses. For example, by banding together with other businesses in your industry, you can often gain better group discounts from suppliers than you would if you ordered on your own.

Joint venture marketing is another way of sharing advertising costs. An example is a group of shops in a location (such as a mall) joining together to produce an advertising supplement. But there are many variations on this theme you can brainstorm with your staff. The ability to form smart alliances and joint ventures is an increasingly important and distinguishing feature in the success of many businesses.

10. Speed

People want quick service, so the faster you can deliver your product or service the better. Hold regular staff meetings on how to streamline your business processes and fulfill or exceed customer requirements without sacrificing the quality of delivery.

Take action

  • List all your key competitors and then outline next to each how you intend to out-compete them, through developing your own unique competitive advantages.
  • Explore our business tools and resources to start and grow your business.
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For informational purposes only. There is NO WARRANTY, expressed or implied, for the accuracy of this information or its applicability to your financial situation. Please consult your financial and/or tax advisor. Full legal disclaimer