Your small business is faced with a financially strong competitor, they can influence market prices as they see fit, and they have the latest technology on their side. What do you do?
Imagine a phone with no social media; no internet and no applications trying to compete in a market where iPhones exist. A company making a phone that only receives calls or text messages cannot possibly be profitable in today’s world, right?
Wrong.
It has been done, it is still being done, it is profitable and here’s what you can learn from it and apply to your business.
Competitive Advantage
Competitive advantage refers to factors that allow your companies to produce goods or services better or more cheaply than your rivals. These factors mean that you continue to generate more sales or make superior profits compared to market rivals. As a small business owner, you can find, develop, and embrace your competitive advantage by:
- Knowing your competitors
- Knowing your customers
- Identifying your unique selling point
- Serving your customers and earning their trust
1. Knowing Your Competition
Find out who your competition is, what they have that you don’t and what you have that they don’t. The answers you get will form a major part of your competitive strategy.
Nokia relaunched its 3310 handsets in 2017, knowing fully well that it cannot compete with the likes of Samsung’s Galaxy A5, A7, or the iPhone X, it focused instead on something that it has; affordability, low specs and history.
Nokia leaned into its history when marketing the new 3310 to create a feeling of nostalgia for people who used earlier versions of the phone. Nokia also emphasized the phone’s low spec as a way to reassure people of the promised long battery life and finally it was so affordable that you could get 4 for the price of an iPhone X.
The 3310 Series remains one of the biggest selling mobiles of all time and highlights just how important knowing your competition is.
2. Knowing Your Customers
Many customer research based on competitive advantage would usually focus on:
- Pricing higher/lower
- Improving quality
- Shifting market focus
- or Increasing advertising efforts
No doubt all these are good points but their focus is on the obvious & predictable. Nokia’s relaunch of the 3310 rode on the feeling of nostalgia that it provided customers.
What it would be like if you had that phone you wanted/had as a child. Well it’s available again and it’s cheap too.
Over-the-surface customer research would always ignore nostalgia, but as a small business owner, if you can influence customer bias by keying into something they already like, you get a fighting chance against these heavily funded corporations.
The task is not so much to see what no one has seen; but to think what nobody has yet thought about that which everybody sees.
Erwin Schrodinger
3. Identifying Your Unique Selling Point
Just ask yourself: What is the one thing I do better than anyone else?
As an entrepreneur, it is important that you have something that your customers can’t get anywhere else.
- This is why Disney removed star wars and all its other franchises from Netflix.
- This is why Elon musk is so proud of his tesla batteries.
Even dumbphones have one of these selling points. As opposed to attention-seeking smartphones with social media, people who get dumbphones have been known to boost their productivity, focus and mental health. There is a unique selling point in every market no matter who your competitor is. Find yours.
4. Serving Your Customers and Earning Their Trust
Light phone, a New york-based dumbphone company recorded its strongest year for financial performance in 2021, with sales up 150% compared with 2020.
For a company that exists in the same sphere as Nokia, Samsung, iPhone e.t.c. Light phone founders identified their customers as people who want a break from their smartphones partially/totally. They made sure to emphasize their willingness to serve their customers in that regard, boldly writing their promise on their website;
Designed to be used as little as possible. In this time of ‘Surveillance Capitalism’ and the ‘Attention Economy’, the Light Phone represents a different option. You are the customer, not the product. This is a phone for humans.
Light Phone
They addressed the customer’s pain point, ensure they stay true to their company’s goal and most importantly this move ensures that their customers trust the company.
Light phone whose main customers are surprisingly aged between 25 and 35 understands that trust breeds loyalty and made sure to emphasize that they’ll keep that trust unbroken.
As a small business owner having loyal customers ensures that the threat of competitors would be unable to shake your profits.
Having a Competitive advantage is important to the survival of your business as a small business owner and regardless of what industry you are in there’s always something you can do differently, that would create value. I’d like to know if you have used any of the strategies here in the past or if there are others you adopted. How did it go?
Information Prime 