How to Uncover Your Company’s Competitive Advantage

iStock_000005051077XSmallToday’s guest post is by Ivana Taylor, President of Third Force Marketing a boutique strategic marketing firm that helps companies become the obvious choice for their ideal customer.  She runs a how-to resource for marketers.  Her blog is called Strategy Stew.

Do you know why your customers choose you?  You might think that you do, but chances are you would be wrong.  Janie L. Smith, author of “Creating Competitive Advantage” discovered that only two CEOs out of the thousand that she asked could clearly articulate a competitive advantage.  This is a critical point because understanding why your customers choose you can mean the difference between getting or losing the sale.

What’s Competitive Advantage?

A solid competitive advantage has four attributes:

  1. Must be objective.  This means that it’s a statement of fact; 3 locations, open 24 hours, etc.  If you think about it, it’s kind of like a “feature” of your business.
  2. Must be quantitative. Specify how much, how many of anything you’ve got as a feature.  In the example above we made some specifics here are a few more: each service representative has at least 20 hours of training (specify what kind), your pizza delivered in 30 minutes or less or it’s free.
  3. Not claimed by any other competitor.  This is where it gets tricky,  your competitive advantage could truly be something that no one else is doing OR it can be something that they are not claiming – or focusing on.  This gives you a lot of creativity.
  4. No cliche. Stay away from empty phrases like “your solution provider.”

Now that you know what constitutes competitive advantage, it’s time to start a list of what you think your company’s competitive advantages.  To get your brain bubbling, take a moment and list as many “factual features” of your business.  Aim for a list of 49!

  • How would you respond to your customer when they ask “Why should I buy from you?”
  • What’s most important to your customer when they are buying what you are selling?
  • What features of your business give the customer what’s most important to them?
  • In what ways does your business deliver what’s most important to your customer?

But getting a list of what you think your company’s competitive advantages are is only half the battle.  A competitive advantage will only get you chosen if it’s an advantage your customer cares about.  In other words, the things that differentiate you and set you apart have to matter to your customer otherwise – you won’t get the sale.

The best way to be sure that the competitive advantage that you’re going to use in your marketing strategy is viable is to test it with your customers.  A great approach is to hire a third party to run a blind research study which asks customers to rate what attributes are important to them and how well a variety of “brands” perform against those attributes.

It just so happens that QuestionPro has an advanced question in that exact format.  It’s called a “Side-by-Side Matrix” question and you’ll find it by adding a new question and clicking on “Advanced Question” type.  The side-by-side matrix question is already pre-formated to measure how important an attribute is to your customer and how satisfied they are with that attribute.

Have you used this type of question to uncover your company’s competitive advantage?  What did you learn and how did you implemented it?