Competitive Advantage: 5 Reasons why it is Important to Small Businesses
Do you know your small business needs a competitive advantage? Every small business owner wants to improve their business, increase revenue and take their business to the next level.
However many of them don’t know where to start from or are doing it the wrong way. One of the many factors to consider as a small business owner is your “competitive advantage”
You should answer questions like who are my competitors? What are they doing right? What are the flaws in their business models? Answering questions like this helps you to develop a better business model and gives you an edge over your competitors.
What is a competitive advantage?
Competitive advantage refers to an important factor small business owners have over other competitors. It distinguishes them by offering the consumers greater value for products. This could be by offering lower prices for certain products or providing a unique service to justify higher prices.
It has to do with small business owners trying to think of ways to improve their services better than their competitors.
Reasons Why Competitive Advantage is Important to Small Businesses
In this article, we will discuss a few reasons why competitive advantage is important to small businesses. Without further ado, let’s get started.
Here are five reasons why your competitive advantage is important as a business owner:
1. Quality of service
2. Customer relationship
3. Product differentiation
4. Branding and packaging
5. Tracking progress
Quality of service
In today’s world where competition is the order of the day, small business owners need to earn their customers’ trust. They can achieve this by constantly meeting or exceeding their expectations. Doing this helps them to be ahead and have an advantage over other competitors.
Quality of service is very important since it’s a determining factor in customer satisfaction.
As a small business owner, you must always evolve and try out new things that could give your customers satisfaction. This makes you stand out from your competitors. For example, surf the internet for different ways of producing a particular product. You can also review past works of different entrepreneurs. After doing this, look for ways to incorporate those ideas into your brand or business.
Customer relationship
As small business owners, creating a personal relationship with your customers goes a long way to getting more customers. The reason is that they serve as marketers by telling other people how good and authentic your product is.
Make polite gestures. Whenever there is an issue, always try to talk to them politely and get the issue resolved. Remember this phrase that says “customers are always right”
As a small business owner, you shouldn’t be aggressive and rude to your customers. Doing this means that you’re shelling out your customers to your competitors. This can be a very big loss on your part.
Product differentiation
This is a major reason small business owners should consider because this helps and distinguishes them from other competitors. In this context, small business owners can offer prices for products at a cheaper price compared to other competitors. They can offer quality products at higher prices which makes them stand out from their other counterparts. You can also offer discounts on products.
Branding and Packaging
This is also a reason why competitive advantage is important to small businesses.
Small business owners should focus on the branding and packaging of their products. Doing this helps them to attract more customers and make their product more appealing to the public. By doing so, it makes them stand out from their other competitors.
Tracking progress
It helps small businesses to accurately measure their progress and achievements. Small business owners can track how well their customer service is and how many more customers they have. They can do this by analyzing their data on how much they have gained so far on a particular product.
As a small business owner, one needs to have a record of all the activities and transactions being made. This will help to know if more revenue has been generated. It also helps to know how many more customers purchase their products based on the value they are giving out.
Conclusion
To succeed in a competitive market, you must be able to see, think and do things differently from your competitors. This helps you distinguish yourself. You could create a product for a cheaper price yet still retain its value. Also, you can provide quality and unique services which justifies a higher price.
In addition, understanding your market in-depth helps you come up with solutions that can serve your customers better. This, in turn, gives you a competitive advantage over other businesses.
