A competitive advantage is something that makes your business different and more attractive than others. It doesn’t necessarily have to be a product or pricing-based advantage; it can be something more niche, like impeccable customer service, a convenient location, or a sustainable manufacturing process.
The good news for small businesses is that their flexibility and resourcefulness often make it easier to adapt and gain a competitive advantage even over larger, more established companies. Read this blog by Rapid Formations, a leading company formation agent in the UK, to learn how to do it.
Engage on social media
Social media is one of the main ways small businesses can stand out and gain a competitive advantage in today’s digital age. Most social media platforms are free to join, and that’s where your target audience and competitors will be.
Some companies (especially larger ones) often fail to engage with their followers on social media. For example, they might fail to offer customer support, which, according to the 2023 Sprout Social Index Report, is what the majority (76%) of users want, notice, and appreciate about brands.
However, only 30% of brands have adopted customer care processes to actively engage on social. So, there’s certainly a gap that your small business can fill to gain a competitive advantage.
Deliver a superior customer experience
Customer service matters well beyond social media—you should deliver exceptional support across all your engagement channels from day one, be it via your website, over the phone, or in person.
A small business like yours certainly has a huge opportunity to gain a competitive advantage over brands losing customers due to a negative experience. According to the Zendesk Customer Experience Trends Report, a staggering 84% of global customers say they value customer service over convenience and reputation when deciding whether or not to buy from a company.
However, many businesses struggle to meet this growing demand. Fortunately, as a small business owner, you generally have greater control of your company and play a more active role in running it than larger organizations. This puts you in a great position to deliver a superior customer experience and gain a competitive advantage over other players.
The report highlights that the following contribute to a superior customer experience:
- Proactive engagement involves companies actively contacting customers first. For example, it could be to tell them about a new offer or update them on their recent order.
- Human interaction is preferred over AI, with 70% of people saying they want to talk to a real person when contacting a company.
- Younger generations expect businesses to have a strong data protection policy, while older customers want companies to keep track of their order history and personal details for a quick and easy experience.
- Speedy and efficient resolutions.
- The ability to reach a business by phone.
- A user-friendly website that’s easy to navigate.
As a result of delivering an impeccable experience, people are often willing to spend more and become loyal customers. They’re also generally more likely to share their personal information with you, which is useful for building a mailing list or understanding your buyer persona.
Increase your prices
We often assume customers want the cheapest price, but that’s not always the case. Many people are often willing to pay more for factors like quality and convenience.
So, if your small business uses higher-quality materials than your competitors or is based in a more convenient location, you can leverage that to increase your prices and gain a competitive advantage.
There’s also a psychological element to pricing. If a product is too cheap, it can actually deter shoppers. Let’s take a simple example of strawberries. This fruit can get quite pricey in season, around £3 per punnet at your average supermarket. But when we see one for £1.50 a punnet, we’re inclined to wonder, “What’s wrong with it?” and “Why is it so much cheaper than the others?”.
Naturally, we’re skeptical when something is considerably cheaper than we expected, urging us to opt for the more expensive option, which we presume is of better quality.
We’re not saying price isn’t important. On the contrary, you should offer your customers a reasonable and fair price. But if you sell products and services associated with a higher value, like beauty, trade, or locally sourced produce, you’re well-positioned to raise your prices and gain a competitive advantage.
Safeguard your intellectual property
Protect your intellectual property to prevent other brands from gaining a competitive advantage over yours. Whether you’ve designed a top-notch logo, come up with a catchy slogan, or created an innovative product, be sure to safeguard your company’s unique elements with trademarks, patents, and copyright.
These types of legal protection prevent others from stealing or copying your work. You can trademark words, sounds, logos, and colors or protect brand-new, inventive concepts with a patent. Meanwhile, copyright is automatic (and free). It can be used to safeguard artistic work, music, videos, and publications.
Marking your intellectual property with the relevant protection symbol shows the world that you have something valuable that makes your business stand out from others.
Create an impressive company culture
We mentioned that small companies benefit from greater control. Well, you can also play this to your advantage by creating an impressive company culture. This is particularly powerful if you’re recruiting.
Nowadays, candidates look way beyond the salary when searching for a new role. Remuneration is still incredibly important, but if you cannot match or exceed the average salary standard for a particular position, you can stand out by offering an attractive culture, benefits, policies, and perks.
Let’s say company A has a negative working environment, a poor work-life balance, and restricted professional advancement options. Meanwhile, company B (you) offers flexible working arrangements, mental health support, and training and development opportunities. Candidates are more likely to opt for your company, where they’ll feel valued and supported.
Culture also matters to customers. When choosing whether to shop with a particular brand, shoppers will likely research its ethics, values, and practices, which will heavily influence their final decision.
For instance, they might choose a business that gives their staff Christmas Day off over one that doesn’t or one that takes part in charity work over one that doesn’t. Therefore, you can gain a competitive advantage by building an impressive company culture that both future employees and customers will want to be a part of.
Collaborate with other small businesses
Being a small business doesn’t mean you can’t benefit from collaboration. Partnering up with other small businesses can be a powerful way to reach a wider audience, access new resources, and leverage a competitive advantage.
If this is something you’d like to explore, start by identifying the right company to collaborate with (this can also be a social media influencer). It’s not essential that you both operate in the same industry or sell similar products (think Heinz x Lick). It’s more important that your values and objectives align to ensure a successful partnership.
Once you’ve found the perfect partner, you can work together to:
- Offer an exciting promotion
- Launch a competition or giveaway
- Create a unique, co-branded product
- Activate a social media campaign
- Share retail or office space
- Run a referral program
The possibilities are endless. It’s all about forming strategic relationships to help your business evolve and stand out.
Present at networking events
Last but not least is networking. These events are crucial for small businesses; it’s an excellent chance to build meaningful connections, learn new skills, exchange advice, and get your brand name out there.
But why not go further and gain a competitive advantage by presenting at relevant networking events? Next time you’re looking for a networking opportunity, contact the organizers and learn how to be a guest speaker.
This is a great way to establish yourself as an authoritative business leader. And if it goes well and you enjoy it, present regularly to increase your confidence and help your business get noticed.
Thanks for reading
From social media engagement to presenting at networking events, there are plenty of ways that small businesses can gain a competitive advantage in their market—and not just over other small companies but also over the big players.
Ready to launch your new business? Get started with Rapid Formations, a top-rated company formation agent in the UK. Register your limited company in just a few hours, from as little as £52.99, and access a range of corporate services and helpful resources to guide you through your entrepreneurial journey. Visit the Rapid Formations website today to get started.
