7 Ways to Protect your Business’s Competitive Advantage
Being a small business owner is a little bit like being a race car driver. To win the race, you need to stay focused on who is ahead of you and execute strategies to overtake them. At the same time, you must frequently look over your shoulder to monitor competitors to find ways to expand your lead and protect your competitive advantages.
In car racing, these advantages could be advanced technology, process economies and efficiencies, designs that decrease friction, and (of course) the experienced driver behind the wheel. It's not that different in business. And once you have identified and developed an advantage that puts your small business in the lead, protecting those advantages becomes a high priority.
With that in mind, here are seven ways to protect specific types of competitive advantages so you can outpace your competitors for the win.
1. BECOME THE BRAND OF CHOICE
Who doesn't want to be the first brand that comes to mind when someone is ready to buy? But getting top-of-mind brand awareness and the positive perceptions that make a customer choose your brand over competitors isn't always easy. Here are some of the strategies that can get you over the finish line faster than your competitors.
Craft a memorable brand identity
Any brand can craft a memorable identity, no matter how common its products or services are and no matter its size. In fact, small businesses are often better at describing the passion behind the way they do business, pinpointing exactly who would benefit most from their products and services, and explaining what sets them apart from competitors both large and small. With big players, these messages often get lost behind mass marketing campaigns designed for large audiences.
You only need to look at the example provided by the Dollar Shave Club for inspiration. It literally turned a commodity product (razor blades) into a much-talked-about brand and a $1 billion dollar business.
Some of the key elements of a brand identity that people connect with and remember include:
- Mission statement—what your business does, and why
- Vision statement—what your business will become by fulfilling its mission
- Core values—the values and principles that drive how you operate and pursue your vision
- Brand positioning statement—what sets your brand apart and who it serves
- Visual, text, and auditory brand identity—colors, logos, verbiage, slogans, taglines, and more.To make your brand identity memorable, tie everything back to the pain points, concerns, and causes that motivate your target audience. Then, implement a cohesive and consistent use of your brand identity across all your marketing channels.
Develop a unique selling proposition
Your unique selling proposition, or USP (also known as a unique value proposition or UVP), is the main reason someone chooses you over other options. Essentially, it's the type of competitive advantage you hope to create and protect. It must be something that differentiates your brand from your competitors and is compelling to your target audience.
Here are some steps you can take to create a compelling USP:
- Evaluate the market to identify gaps not being served adequately.
- Create ideal customer profiles (ICP) to identify the specific values, needs, and pain points of your ideal clients or prospects.
- Study the unique value propositions in your competitors' advertising and marketing collateral.
- List ways your business is different than your competitors.
- Circle back to your market evaluation and ICPs and develop a unique value proposition based on the differentiators that set your brand apart.
Simple examples of unique and compelling selling propositions could be your business being able to provide delivery or curbside pickup, serving clients that have a hard time finding solutions (like higher-risk insurance options), or having a team with extensive experience and tenure.
Build a strong online brand presence
Today, even the most non-digital products and services require an online presence. In fact, research from BrightLocal shows that 88 percent of consumers researched local businesses on Google in 2022 (up from 81 percent in 2021). Here are some of the cornerstones you will need to build brand visibility online:
- A website optimized for online search
- Social media profiles and posts on the channels where your customers engage with brands
- An email marketing plan (and strategy for building your contact list)
- A permission-based SMS text marketing program (for retail and restaurant businesses in particular)
- In-store Wi-Fi to make it easy for customers to check in and tag your business on social channels while visiting
- Digital ads to get on top of search engine results pages (SERPs) and into the social feeds of your target audience
- Press releases to generate positive publicity and buzz about your brand
Get reviews on Google
Google might not be the only platform where positive customer reviews will help your business, but it's the most important one. BrightLocal's 2023 Consumer Review Survey shows that 98 percent of consumers read reviews online before making a purchase or visiting a local business. What's more, Google Business profiles are shown alongside organic search results, especially where Google assumes a purchasing search intent.
To get reviews on Google, you will first need to create (or claim) your Google Business page. Next, optimize it with keywords and your business information, and don't forget to include video and images to increase online engagement. Finally, implement tactics to get more Google reviews, such as:
- Asking at the point of sale
- Asking for reviews in post-transaction emails
- Adding a QR code or link to your profile on receipts
- Using website popups
- Embedding Google reviews onto your website
2. BUILD A WINNING TEAM TO PROTECT YOUR COMPETITIVE ADVANTAGE
When asked what sets their business apart, a lot of small business owners fall back on a vague cliché, “Our employees set our business apart." The thing is, if that's true about nearly every business, then it's a non-differentiator.
Your team could well be the X factor that makes your brand a winner, but you need to be able to specify why or how. You can also purposefully set out to build a winning team to keep your business out in front of the competition by:
- Recruiting people with recognized expertise or industry authority
- Hiring strategically to fill skill gaps
- Regularly investing in employee training and development
- Rewarding employees who level up
- Recognizing high performers throughout your company (not just in highly visible roles)
3. PROVIDE A SUPERIOR CUSTOMER EXPERIENCE
Shep Hyken's 2023 Achieving Customer Amazement study revealed the top reasons people switch brands are:
- Employee rudeness or apathy
- Inconsistent information
- Inability to reach someone who could help
- A poor or inconsistent customer service experience
A straightforward way to offer a superior customer experience that creates stickiness and retention is to implement strategies to combat the ways your competitors are letting customers down. To achieve this, do some research into the experiences your competitors are providing and look for inconsistencies in service or information.
Hire or engage in some secret shopping to find out whether your competitors have passionate, engaged employees (and whether or not your business does). Then, develop training programs and scripts and make it easy for your customers to reach someone who can help with their issues.
With this foundation, you can then brainstorm ways you can go over and above the expectations of your customers. For example, if call-in customers experience on-hold wait times, how can you make those enjoyable instead of the expected poor-quality elevator music and occasional “your call is important to us" interruptions?
Next, develop additional customer retention and loyalty sticking points with insider exclusives, a customer loyalty program, purchasing rewards, and so on. Take the temperature as to the level of customer satisfaction with your business using polls and surveys on a regular basis.
4. DEVELOP HOLISTIC STRATEGIES TO OUT-COMPETE ON PRICE
Many small businesses fail to thrive because they find themselves in a race to the bottom price-wise, having failed to create differentiators that overcome price objections. That's not to say that you can't compete and win on price—but it's important to win on price without sacrificing your margins.
For example, restaurants often make up margins by charging a premium on items like soda and other beverages, making it possible for them to offer great happy hour pricing or trim margins on dishes with a higher production cost. Many printing companies lead with super-low pricing on items like business cards, knowing they will make up the difference when the business orders flyers, catalogs, and other marketing materials.
Likewise, you can become more competitive on pricing by reducing your overhead and input costs. Some ways to do this include:
- Asking for price breaks in exchange for exclusive supplier privileges
- Decreasing costs with discounts for paying in cash or upfront
- Buying in bulk to lessen cost-per-unit
- Outsourcing to reduce overhead
- Upgrading equipment or software to streamline workflows
The key here is to look at your pricing and margins holistically and develop accurate projections. Then, use all that math to see where you can out-compete your rivals on price without sacrificing the financial health of your small business.
5. OWN A NICHE MARKET
Big players generally have to serve a wide audience, whereas small businesses have the agility to tailor their products and services to serve niche markets and even very specific client types. When you can identify this type of niche customer and offer a superior product or experience, you have the opportunity to own it. Once established, this makes your brand very hard to beat in the niche.
6. PROTECT YOUR PROPRIETARY ASSETS
It's often the case that a business will emerge into the marketplace after coming up with new tech, processes, products, or services that allow it to serve the market better (or even completely disrupt it). In many cases, this involves proprietary assets like designs, trade secrets, and names that can be protected with tools like:
- Contracts with suppliers and vendors
- Employee confidentiality agreements, like non-competes and non-disclosures
- Server and website security to protect data from hacks
7. MAKE STRATEGIC ALLIANCES
To identify potential partners for alliances, look at where your buyer is just before they make a purchase from a business like yours and what happens afterward. If other players are involved in the process, creating strategic alliances and partnerships can work to build business for all parties.
For example, businesses often partner with other businesses to create protected territories. Salon manufacturers contract with beauty product distributors who enjoy exclusive distribution rights within states or regions.
Others create alliances to offer better customer experiences, such as a home builder who sets new home buyers up with a home warranty company. Or an insurance agency that teams up with specific appraisers to estimate risk, assess value, and generate policy pricing.
ONE LAST WORD OF ADVICE: DON'T STOP INNOVATING
Without continuously innovating and monitoring competitors in the marketplace and watching the trends happening in your industry, you could find a rival pulling ahead. Conversely, by doing so, you position your brand to take advantage of emerging opportunities and extend your lead.