Most successful businesses get that way because they offer something different than everyone else–and that “something different” is an offering that their customers want.
With this fact in mind, it’s worth your time as a business owner to look closely at the “special sauce” that differentiates your business from the rest. Everyone knows that they need one to be successful, but identifying whether you truly have one, and if not, how to get one, can be tricky.
A true competitive advantage sets you apart from your competition not some of the time, but every time you do business. It is a unique aspect that can be summed up in ten seconds or less.
Here are the three main types of competitive advantages, and ways to determine whether your business has them.
Your Competitive Advantage Is Integrated Into Your Product
Whether your product is vegan baked goods or software, if you have an ingredient, method, or feature that make your offering unique and superior to others like it, then you have a competitive advantage.
Examples of this type of competitive advantage include Instagram’s filters, which allowed every user to post professional-looking photos online, or KFC’s secret recipe for their fried chicken, which was rumored to have been leaked recently by a former employee (luckily for the brand, the rumors weren’t true).
The way to know for sure whether your business has a competitive advantage in this category is to ask, “if other companies started using or offering this special sauce/feature/method, would it be bad for our business?” If the answer is “yes,” then you have a competitive advantage, and it’s important that you take measures to maintain it. You may want to explore options such as trademarking your materials or having your employees sign non-disclosure agreements, to ensure that your advantage is kept secure.
You Make a Promise, Not a General Statement
The key to knowing whether you’re offering a competitive advantage in this category, versus just keeping up with regular customer expectations, is the Promise Test. When you state your idea of your competitive advantage, is it a promise, or a general statement?
Here are examples illustrating each:
GENERAL STATEMENT: “We offer top-quality customer service to every customer.”
PROMISE: “We resolve every customer service inquiry within 24 hours.”
The general statement, while important, is not a competitive advantage, since no business ever states that their customer service is poor, or not a priority. The promise, meanwhile, is more. It is a concrete statement of accountability that can be easily communicated, tested and, if your business truly commits to it, relied upon by your customers.
Your Product Or Service Creates Unique Results
If your business can provide a result for your customers that no one else can, either through technology or another means, then you have a clear competitive advantage. This result could be driving twice as many unique visitors to a website as any other traffic-driving product, or it could be cutting the time it takes to heal a broken leg by a month. No matter the context, the key is that the customer gets something above and beyond, that they can’t get anywhere else.
Once again, if your competitive advantage falls into this category, it’s crucial that you identify what makes your results unique, so that you can maintain both the results and the singularity of your business in producing them. If you’re doing something that no one else is doing, make sure that you can stay ahead of the pack for as long as possible.
If you have an idea of your business’ competitive advantage, use these steps to ensure that it passes the test. If so, congratulations! You have a great business that’s poised to thrive. Just make sure that your advantage stays competitive, and also that it stays yours alone.