How to Sustain a Competitive Advantage and Grow Your Business

What you need to know to keep your small business strong in a saturated marketplace.

Sustain a Competitive Advantage Blog Post Nov21-2

Marketplace competition is fierce. Consumers have become smarter and spend more time researching their options. Companies need larger marketing budgets to reach their audiences. Global competition affects everyone as customers compare online alternatives. Even local businesses feel the pressure to compete.

Many businesses limit their competitive focus to a few relevant brands. Of course, the idea of competing with the world is overwhelming. But it’s a mistake for small business owners to ignore the depth and scope of their competition.

You will learn how to create and sustain a competitive advantage in this post.


It’s a valid question:

“Is it possible for a small company to set itself apart in today’s rabid marketplace?”

The short answer is yes. But small businesses must think differently. They must be willing to do things their competitors won’t. Most of all, they must remain diligent.

Small businesses need a strategy to sustain a competitive advantage.

In this post, you will learn:

  • how to create effective differentiation
  • the dangers of competing on price
  • when targeting a specific niche doesn’t work and what to do instead

What Is a Competitive Advantage?

Before we explore how to create a competitive advantage, it may be helpful to clarify what it means. A competitive advantage is something you do that is not easy for competitors to emulate. It is a unique value that lies at the core of your product or service offering.

Examples of competitive advantages are:

  • Speed of delivery or service response time
  • Design or manufacturing process
  • Scale or reach
  • Personalization
  • Price

There are many others.

Your company may do several things well. But the best competitive advantage is the one most unique to your business.

How to Create a Competitive Advantage

The more value your customers believe you offer, the more likely they are to buy—and the more they will pay. Unique value is the foundation of every competitive advantage.

A SWOT analysis enables you to compare your business to competitors. SWOT is an acronym that stands for the following:

  • Strengths: the things you do exceptionally well
  • Weaknesses: needed improvements
  • Opportunities: actions you can take to become more competitive or profitable
  • Threats: marketplace changes that could make your product or service less valuable

The SWOT framework is a good starting point if you have never analyzed the competition.

To complete a SWOT analysis, list at least a few points for each category. For example, your strengths may be: service, less lead time, and reduced customer costs. Increased competition and cheaper alternatives might be threats.

A SWOT analysis is telling, but it may not always provide the information you need to create unique value. So, you will have to dive deeper into your business to develop an effective position.

Here are some more ways to uncover unique value:

  • feedback from current customers
  • social proof or reviews
  • competitor comparisons (benefit claims and price)
  • brand image (stated and implied)

I’ll go into more detail on the last point (brand image) in the next section.

Remember, it isn’t enough to claim a competitive advantage. You must provide your target market with proof.

READ MORE: A Differentiation Strategy for Small Businesses That Can’t Go Wrong

Sustain a Competitive Advantage With Branding

Your business’s messages, images, and associations work together to form its brand. The brand attracts people to your business or pushes them away.

Whether you realize it or not, this attraction, or lack of it, is happening right now, even as you read this blog post. Every time people interact with your company, they will decide to engage with it or move on. A branding strategy helps your business create a favorable impression on the audience.

Here are some ways branding helps companies establish and sustain a competitive advantage:

A brand attracts qualified customers.

Qualifying prospective customers is a challenge for most businesses. But the job becomes easier when the audience is better suited for the product or service.

Your brand image should align with the audience you want to attract. This alignment also makes all marketing campaigns more efficient.

Design and messaging are key components in brand development. People gravitate toward images and messages that resonate with their preferences. As the saying goes, a picture is worth a thousand words. A developed brand establishes a connection almost instantly.

A brand builds value for products and services.

Customers buy the product or service that gives them the most value for the price paid. But value is subjective. One person may treasure an item that another deems worthless. So, an influential factor in selling is perceived value.

Consumers favor brands that reflect authority and trust. The brand development process positions your business as a trusted source of expertise. The timeframe for doing this varies and depends on other factors, such as competition. But the benefits far exceed the effort required.

A brand makes it easier to set business goals.

Setting accurate goals is critical to business success. But it isn’t always obvious which goals will make the most impact on the bottom line. As the branding process evolves, the business may find some goals are no longer necessary. Likewise, new, relevant goals may come to light.

How to Sustain A Competitive Advantage

By now, you may know what sets you apart from competitors. But the challenge to communicate it to the audience remains. In this section, you will learn how to establish and sustain a competitive advantage.

There are three vital components of brand communication. They are:

  • the offer
  • target audience
  • platform

Your offer is a set of benefits you deliver to the customer through a product or service.

The platform is the channel through which you broadcast the brand message. Websites, social media, and search engines are examples of digital media platforms.

Create a Competitive Advantage: Know Your Customer

The key to your business’s success lies in how well you serve your target audience. Knowing your customers well gives you an edge. But what does it mean to “know your customer”?

To answer this question, think about your current customers or clients.

These people are the ones:

  • you enjoy working with most
  • provide the majority share of revenue
  • refer associates and others in their network

When observing this group, what traits do they have in common? You can learn a lot from your best customers.

Studying your customer base will enable you to uncover buying triggers. Buying triggers are specific needs or desires that influence people to buy something.

By learning why people buy things, you will discover the benefits they want. You will also gain insight into your target market’s expectations. Then, you can leverage these triggers to improve marketing and advertising results.

There are several ways to research buying triggers. For example, if someone tells you they bought a car last week, ask them why they picked that model. You can do this in a way that isn’t intrusive by working the question into conversations.

With enough feedback, you can create an ideal customer profile. This profile will serve as a tool for communicating with your audience. The more accurate your customer profile is, the more effective your marketing will be.

Here is a list of questions to help you develop an ideal customer profile:

  • What do the people in your audience worry about?
  • If your product or service didn’t exist, what would they replace it with?
  • What features and benefits do they care about most?
  • Does your business meet those needs?
  • What are some reasons people decide not to buy a product or service?
  • How much time do they invest in researching options?

People want to buy from brands that share their values. But you can’t understand your customers’ values unless you go beyond demographics. So dive deeper and find out what makes them tick.

Most small businesses only know the basics about their audience. You can establish a competitive edge by deepening your understanding of who they are.

READ MORE: 3 Product Benefits Every Irresistible Offer Should Have

Be So Good They Can’t Ignore You

During an interview, someone asked comedian Steve Martin what it takes to be successful.

I love his response. He said:

“Be so good they can’t ignore you.”

Aspiring to be the best in your industry feels intimidating at first. But don’t get overwhelmed by the idea. The goal isn’t perfection—it’s to keep improving until your audience notices.

Improvements keep your business relevant and strengthen credibility. Many businesses become complacent once they reach a certain level of success. But those with discipline and focus will sustain a competitive advantage.

Here Today, Gone Tomorrow

We live in a fast-paced, ever-changing world. What works today won’t work tomorrow. Change will come. So, be ready to adjust and keep an eye open for new opportunities.

Refer to the information you uncovered in your SWOT analysis. You can anticipate change while analyzing opportunities and threats.

When observing trends in your industry, the key is to figure out if one is temporary or a sign of permanent change. For example, you may have to create other products or services to get more growth or offset a sales decrease. Targeting different demographics may be another solution.

Most of the time, intuition, experience, and common sense prevail. Confirm your hunches before taking action, then make the move and don’t look back.

Staying on the wrong course too long can be a mistake, but pivoting isn’t always the solution either. You must know your limitations. Changing direction could put your business in uncharted territory. Be sure you’re ready to meet the challenges that come with change.

Why You Should Never Compete on Price

Many business owners try to compete by selling at the lowest price. But this tactic rarely creates a competitive advantage. In fact, it often works against you.

First, no matter how low you go, someone else will go lower. Second, businesses that position themselves as the cheapest option devalue their offer. They also risk becoming a commodity.

Many enterprises resort to aggressive pricing tactics without considering the long-term effects. Once they slash prices, the pressure is there to keep them low.

Economy pricing makes it more difficult to make the profit you want. And when you set a precedent, it’s challenging to change it.

Charging premium prices may be more practical than you think. Why? Because there is a direct correlation between price and value. The more something costs, the more value it is perceived to have.

Here is the key to premium pricing:

People will pay more for something if you show them why they should.

When the “Niche Down” Strategy Works. And When It Doesn’t.

The idea of niching down is to target a specific market segment. This strategy creates the belief that you’re better qualified to serve the niche.

For example, many financial advisors choose to serve retirees. Others advertise as planners for small and mid-sized companies. Some business owners won’t niche down because they believe it limits opportunities. But choosing a niche strategy makes it easier to reach your best customers.

Think about it: if someone specializes in serving people like you, they’re likely to understand your problems. You’re also more inclined to believe they are better qualified to provide a solution.

While choosing a specific niche can pay dividends, it doesn’t always work.

Some business owners choose a segment because they think it will be lucrative. But, they find out later that it isn’t as profitable as they had hoped. So they must then reposition themselves in another niche.

In many ways, this is like starting over.

Niching down is an effective way to create unique value. But, if you choose this strategy, select your target market wisely.

Sustain a Competitive Advantage With Communication

How you say something is as important as what you say.

Much of your success will come as a result of how well you communicate. For example, many businesses assume people understand what they do. But you might discover they don’t understand your business that well at all.

So, educate your audience on what you do and the unique value your product or service offers. Clear communication positions you as a reliable resource, which establishes credibility and trust.

All brand communication must be consistent. Most people will only encounter your brand a few times. So, though you may get bored repeating the same messages, many people will be hearing them for the first time.


Differentiation will make your business more competitive. But creating unique value in a crowded marketplace isn’t easy.

I’m here to help. If you have questions, email me personally at

Until next time,


P.S. Are you ready to build a competitive advantage? We can help. Click here to set up a FREE consultation and let’s get started.


Chris Fulmer

Chris Fulmer

Director, The Golden Vineyard Branding Company

Free Resource

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