4 Strategies for Defining Your Competitive Advantage

 Krista Moon  1 Comment

4 Strategies for Defining Your Competitive Advantage

This may sound crazy, but one of the hardest things to do from a business perspective is figuring out…what you actually do.

Oh sure, you know in general what you do – you offer some products or services, yada, yada, yada. That’s nice, but you’re normally not the only gig in town offering similar – or the same – products and services. What it really comes down to is this: why would someone want to buy from you vs. someone else?

What is your ‘special sauce’ that everyone absolutely loves, but no one else can make exactly like you?

Daniel M. Cable gives some pointers on how to define your ‘special sauce’ in his book Change to Strange: Create a Great Organization by Building a Strange Workforce.

1. Create a Caricature of Your Company

A caricature is “a picture, description, or imitation of a person or thing in which certain striking characteristics are exaggerated in order to create a comic or grotesque effect.”

Make a list of the characteristics of your company, then create a caricature based on those that really stand out.

This is really helpful if you use it in conjunction with what Gino Wickman talks about in his book, Traction. He claims that every company should have three “uniques” – qualities that will truly make your company special to the ideal customer.

He says, “If you line yourself up against 10 of your competitors, you might all share one of these uniques. Some may even share two, but no one else should have the three you do.”

The caricature can help you visualize up to 3 things that are special about your company, and make sure that no other company could draw the same picture to describe themselves.

2. Find Your Obsession

Being obsessed means “preoccupied with or constantly worrying about something.” What do you really obsess about regarding your products or services? What’s more important to you than anything else?

The key is to obsess about something your customers find highly valuable, but that your competitors don’t focus on.

According to Dan M. Cable, “To develop and keep a competitive advantage over a long period of time, you need to offer something valuable, rare, and hard to imitate. Something competitors can’t see, understand, or aren’t willing or able to do in a way that customers will appreciate.”

3. Identify Why Customers Love You

If you asked your most recent customers why they chose you over the competition, what would they say? What if you asked them why they continue to do business with you?

It’s critical to continually get this feedback so you can pinpoint what your people are doing that makes your company special.

Don’t just guess either. Ask your customers!

4. Focus on a Particular Market Niche

Here’s an analogy:

No matter how good your ‘sauce’ is, there will be people who don’t like it or can’t eat it. Maybe they are ultra-sensitive to the taste of some of the ingredients. Maybe they aren’t mentally capable of opening up to trying something new. Or maybe they’re allergic and will go into anaphylactic shock if they come into contact with it!

Does that mean that you need to change your recipe or stop making it all together, just because it doesn’t suit every single person? Of course not! There are still many others who will love it so much they can’t get enough.

Those are the people you need to stay focused on. Using buyer persona’s, create a market niche that values and loves your special sauce.

You might be tempted to alter your recipe for a special person that has a valid reason for not being able to eat it. Before you do that though, remember: it will take just as much time and money to create an altered version of your recipe as it will take to create the original version.

Not only that, the altered version might end up tasting horrible, and then you just wasted everything. It’s risky business investing that much for one person. Is it worth it?

The Value of Clearly Defining Your Competitive Advantage

I’m a small business owner too, so I know first-hand how hard it is to put your competitive advantage into words. I’m currently in the process of working it out for my own company!

From a business process standpoint, a clear competitive advantage is critical for keeping the company focused. It’s easy to get distracted, which leads to veering away from what makes you special. Pretty soon you realize you spent all kinds of money and resources on ingredients that have nothing to do with your special sauce, and you end up with a chaotic mess.

From a marketing standpoint, a clear competitive advantage is critical for creating strong messaging for your website and sales materials. It gets everyone at the organization talking the same language. There is no question about your ingredients and process for creating the sauce.

What’s your special sauce?

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