In business, there will always be someone greater than you, who has more marketing money than you, who has been in business longer than you, and who may even offer a product or service at a lower price. Your competitors may have higher internet search rankings and an army of followers on Facebook. How do you compete in the market with disadvantages like that?
As a smaller player, he has some advantages of his own. You can tackle markets that are too small for the big players to compete at a profit. You may be able to meet the specific requirements of a niche better than your big competitors. Your level of service may be higher than that available from your more established competitors. Perhaps you can offer a guarantee that larger competitors cannot match. You can certainly make changes to the way you serve your market faster than larger competitors. Your products may be higher end with better quality and performance than those offered by mass market vendors. Lastly, you may have an experience that is important to a set of customers that big competitors can’t match. However, in most cases, the worst thing you can do is compete on price with larger, better-established competitors. It may work for a while, but with limited exceptions, in the long run you won’t be successful or make as much money as you should.
The answer to competing in highly competitive markets against larger, established competitors is to develop your unique selling proposition. What makes your product or service different from all the others. Your product or service cannot be an undifferentiated good. All of the possible perks I listed above are unique selling features. They establish that your product or service is different from others, is not a commodity, and offers customers a unique value proposition that they would be hard pressed to find elsewhere.
So what is your unique selling proposition? What differentiates your offer to the market? What combination of features will your customers find that will benefit them more than your competitors’ offerings? If you are a distributor or manufacturer, can you deliver full orders faster than your competitors, allowing your customers to keep less inventory? If you work in financial services or real estate, do you have any special education or experience that your clients would find valuable if they knew about it? Are you so confident in your product or service that you can offer your customers a performance guarantee that others cannot or will not match? Can your clients call and speak to a real human being on the fourth ring or better 98% of the time, making working with your company an exceptionally pleasant experience? You get the idea.
The key to knowing what your unique selling proposition is lies at the intersection of two sets of information:
- What are you really good at and in a position to provide
- What your customers find valuable
I’ve said it before: if you can’t establish value, all you can talk about is price. So find out what your customers value and are willing to pay that may not be obvious at first glance. Ask them and keep asking them. Find out what they want, what they don’t like, what they fear, what they are trying to achieve with their purchase, and what they would really like to see in a product or service offering. These are all clues to possible points of differentiation. Then find a way to offer your product or service in a way that addresses that point of differentiation at a profit.
Once you’ve established your unique selling proposition, customers should know that you offer it. It should be on your website, your warranty, and your sales scripts. Every time a customer or prospect comes into contact with your company, they need to know or see your unique selling proposition. When they do business with you, they need to experience it all the time. It is your brand from that moment on. It is what you will be known for. It’s the reason potential customers will choose your product or service over others in the market, and the reason customers will keep coming back. It’s what makes your business, your products, and services unique in the marketplace, and how you can compete with larger, more established competitors.