Identify Your Competitive Advantages

This blog is a continuation of our last one, entitled "What's Your Competitive Advantage?" Part one overviewed how competitive advantages provide the opportunity for improved margins and enhanced business value. Next, we turn to how to identify your competitive advantages.


Identifying Your Company's Competitive Advantages

Your competitive advantage may lie in the product or service you provide. But chances are that is not the case. Save yourself a lot of time and money trying to convince your customers that your product/service is better than your competition when it really isn't. Even if your product or service isn't special by itself, the way you make it, test it, package it, deliver it and any other extras you provide can make the critical difference in customers buying decisions.

The following is a sample list of deliverables that you can measure against your competition in order to arrive at competitive advantages for your company:

• Product knowledge


• Post-sale technical support


• Inventory availability and selection


• Product performance


• Tech-savvy reps
  
  


• Consistently complete shipments


• Good delivery condition


• Easy installation


• Fast response to customer inquiries


• Superior communications
  
  


• Unique design


• Installation training


• Shipping documents


• Sales leads


• Product training

Internal Competitive Advantages

Your company may have some strong internal competitive advantages that your customers don't see which can and should influence their buying decisions. A few of those may be:

Buying power:
If you do a high volume of business or hold exclusive franchises on certain products you have clout with your suppliers. Let your customers know about these.

Substitute products or services:
If you have alliances or networking arrangements that strengthen the entire range and quality of services you can bring to a customer, make sure they know about them so they don't feel they have to switch from you to another supplier to get them.

Market position:
There is security in numbers and if a potential customer knows you dominate the market they are more likely to feel comfortable dealing with you. Your market position doesn't need to be national to be impressive. A strong regional or county market share can be just as impressive.

Experience:
More important than how long you have been in business is the expertise you bring to the game. Make sure your customers/clients know about it.

Production advantages:
If you've invested in the latest equipment, have better access to materials or boast a heftier inventory, look for impressive metrics that will demonstrate a benefit to the customer and tell them about it.

Distribution advantages:
If you are a supplier, perhaps the physical location of your warehouses or the size of your truck fleet gives you an edge in receiving and shipping materials and products. This can translate into faster order fulfillment. Find out how to measure the benefit to your customer and let them know about it.

Government relations:
Experience in dealing with the various layers of government laws and regulations doesn't come easily. Your customers can benefit from both the results of your experience and the relevant knowledge you can pass on to them. Additionally, you may act as an advocate for your customers' best interest in dealing with regulators and legistlative initiatives.

In summary, minimize or eliminate your customers' concerns about any risk of buying from you. Give them confidence that they are in good, responsible hands with you.

Reference: Creating Competitive Advantage by Jaynie L. Smith