A competitive advantage is anything that convinces a customer to buy from you over the competition.
The beauty if that simple reality is the fact that just about anything can be a competitive advantage.
It could be a strength. It could even be a seeming weakness that when viewed differently becomes a unique strength.
In business, it’s effortless to focus on weaknesses. Especially your own. You see your weaknesses and your competitors’ strengths. This can serve you well. It can lead to improvement. It can get your entire team focused on catching up and passing the competition.
But it’s not the only way to focus. In business, as in life, it pays to be sufficiently self-aware. Of your weaknesses and of your strengths. And both could become your competitive advantage.
If you’re struggling to discover your competitive advantage, here are some steps to follow…
Step #1. Audit & Assess
The first step that works best in my experience is auditing your entire operation. Going through every step to every process from start to finish.
What you’ll find is that you’re excellent at some things while not so good at others. You’ll find bottlenecks that you can address, which is a nice little advantage in itself. But this is about self-discovery.
As you learn more about yourself you’ll find where you’re good. Where you’re really good. Usually where you’re really good are areas where you’re better than the competition.
You’ve found a possible competitive advantage.
But even if you find a weakness it may be a potential advantage. More on that in a bit.
Step #2. Ask Trusted & Trustworthy Associates
To learn more about yourself, talk to colleagues and associates you trust. But not just those that will tell you what they think you want to hear. You’re looking for the truth. Both good and bad. It’s good to do your own audit like we did in the previous step, but it’s just as helpful to get an outside opinion.
Hold back on any urge to fight back. Just listen. All the information will be useful. Some of it may not be entirely correct in your mind, but I’m a believer that perception is reality. If someone believes something about you then to them it’s the truth. It’s your job to change their perception.
Ask them what they like most about you. Then ask what they dislike the most. Press them to get real.
Step #3. Ask Fervent Customers
Next, go to your customers. But go to your most passionate customers. The ones that will probably be the most willing to share the truth with you. They want to see you succeed. Take the same open-minded approach. Press them for the truth. Both what they love and what they detest.
Step #4. Identify Competitive Opposites
By now you’ll have a really good idea of where your strengths are in business. This will clue you in on your competitive advantage or advantages.
But now it’s time to dig a little deeper. It’s time to get clever.
Look back at the competitive landscape. Then look at how the competition compares to you. Everybody has different ways of doing things. And these differences can be to your advantage.
For example, maybe you’re located in a small town in the midwest. Maybe your biggest competitor is in a big fancy office on the east coast. It’s a competitive opposite.
And it can be worked to your advantage. Use it in your marketing. Use it when talking to potential customers and clients. You could say that you don’t need or want a fancy office. You’d rather spend that money on the product you provide. You could also say that you’re big enough to serve any customer while being small enough to give them your full attention.
Step #5. Seek Out New Directions
Embrace technology. Look to the past for inspiration.
This one involves knowing yourself and your competition. Then it involves looking to other industries for inspiration on how you can take your industry to the next level.
In the early days of Anheuser-Busch, the founder was looking for ways to get his beer to faraway markets. After several years he finally stumbled on a process that was intended for use in wine.
The process, pasteurization, had been used in various areas of the world on food, dairy and wine for centuries. But the beer company was the first to use it on beer and was then able to take the beer industry in a new, and profitable, direction.
Knowing your competitive advantage is a huge key to taking your business to new heights. The more you know how you compare to your competition, the better you can call out the things that specifically make you different. When people see the difference they can make a clear decision. Usually they’ll choose you.