3 Ways to Strengthen Your Competitive Advantage
The small business landscape is fiercely competitive.
According to the Census Bureau’s Annual Survey of Entrepreneurs, there were 5.6 million employer firms in the United States in 2016.
Business owners and their management teams are searching for ways to capture additional market share. They are constantly assessing their position in their industry, gathering market intelligence, and deploying new tactics to acquire customers.
Too often it can seem like there isn’t enough time in the day to implement our own growth strategy. It’s easy to get distracted by our daily activities which include meetings, operational challenges and other logistics of running a business.
However, we can still find ways to move the needle towards our desired business outcomes.
Here are three ways to do so:
Know Your Customers
If you don’t know your “avatar”, I’d suggest you grab a pen, a piece of paper, and write down who your ideal customer is. According to marketing experts, you’ll want to know their fears and desires that influence their buying decisions.
Whether you are a B2B or B2C operation, you’ll want to know the pain points that affect your ideal customers.
What are their three biggest problems and how can you solve them?
Once you’re clear on who your customers are, where you can reach them and how you can resolve their challenges, you can properly position your products or services as the solution.
Know Your Competitors
Intelligence gathering is an important component of your business strategy. You want to know how you measure up against your competitors. There are two questions that you should know the answer to:
1. What are their competitive advantages?
This can be in the form of the service that they are providing or the perceived value that they deliver to their customers.
2. What are their comparative advantages?
Pay attention to the marketing and pricing strategies that your top three competitors are using; and how your customers respond to those strategies.
When assessing your strengths against the companies in your industry, ask yourself, “What can we do better?” And start doing it today.
Know Your Numbers
Numbers tell the story of your business. At any given time, you want to know the amount of money coming in and going out of your business.
If you are still using manual processes like Excel to manage your books, it’s time for an upgrade. A cloud based solution, such as QuickBooks Online or Xero, can help you manage your business finances. By implementing automated processes, you’ll save time and always know where you stand, financially.
You also want to research the benchmarks for your industry to see if your margins are in line with your competitors. If they fall below, you have to adjust your pricing strategy. If your margins exceed industry averages, you’re on the path of progressive growth.
As a business owner, assessing your position on a consistent basis and making the right adjustments will save you time and money. This will result in positive service experiences for your customers. As a bonus, you’ll see increases in brand loyalty and profitability which will strengthen your competitive advantage.