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.

How to create and sustain a competitive advantage

Competition is fierce, especially for small businesses.

Large corporations have more money to spend on marketing. This makes it tougher for small enterprises to compete.

Thanks to the Internet, people can shop around the world to find what you sell. However, the threat of worldwide competition is real, even for local businesses.

So, is it still possible for a small company to set itself apart in today’s marketplace?

The answer is yes. But smaller businesses must do things others aren’t willing to do. They must be bold, buck the trends, and stay true to themselves.

Most of all, small businesses need a strategy to sustain a competitive advantage.

In this post, you’ll learn:

  • what you can do now to create differentiation
  • the keys to setting your business apart
  • why competing on price is a bad idea and how to overcome price pressure
  • why niching down rarely works and what to do instead

Create a Competitive Advantage by Knowing Your Customer

For most businesses, success isn’t determined by how bright the owner is. Nor is it based on whether a product is the best available solution.

The key to your business’s success lies in how well you serve your target audience.

Knowing your customers better than anyone else gives you an edge over competitors. But what does it mean to “know your customer”?

To answer that question, think about who your best customers or clients are right now.

They are likely the ones:

  • you enjoy working with most
  • provide the most significant share of revenue
  • refer people they know

When observing this group, what do you notice about them?

You can learn a lot from your best customers. Studying them can help you uncover buying triggers. These triggers are specific needs, desires, or values that prompt people to purchase something.

By learning why people buy things, you’ll discover what makes them tick. You can then leverage these triggers in your marketing and advertising.

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 information, 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 with this process:

  • 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 triggers prompt them to buy?
  • How much time do they invest in researching options?

Of course, people buy products and services to meet a need. But it may surprise you to know that emotions drive most purchases.

People also want to buy from brands that share their values. But you can’t understand your customers’ values unless you go beyond demographics. So dig deep 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 the goal isn’t perfection—it’s to keep improving until your audience takes notice.

Improvements keep your business relevant and strengthen credibility.

Many businesses become complacent once they reach a certain level of success. But only 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.

Get ready for change because it will come. So be prepared to adjust and always look for new opportunities.

When observing trends, 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.

Studying data is the most common approach to uncovering trends. But most of the time, intuition, experience, and common sense prevail. Do all you can to confirm your hunches before taking action, then take the leap and don’t look back.

Staying on the wrong course too long can be a mistake, but pivoting isn’t always the solution either.

First, you must know your limitations. Changing direction could put your business in uncharted territory. So be sure you’re ready to meet the challenges that come with change.

Sustain a Competitive Advantage by Being Unique

Being different is not easy in a crowded marketplace. Yet, differentiation is critical for brands to get their audience’s attention. So, rather than trying to be different, focus on being unique instead.

Creating a unique brand is an effective way to show people the value you bring to the table. The more value your customers believe you offer, the more likely they are to buy–and the more they’ll pay.

So, how do you create unique value?

While it starts with knowing your customers, you must look at your competitors too.

  • What promises do your competitors make?
  • How do they communicate with their audience?
  • What buying triggers do they leverage?
  • Whom do they target?
  • What is their value proposition?
  • What is their sales process?
  • Do they make guarantees?
  • What is their brand image? (i.e., colors, packaging, attitude)
  • What are their pricing structures?
  • Do you see any weaknesses in their value proposition or benefit claims? How can you improve on what they’re doing?

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

Why You Should Never Compete on Price

Many business owners try to compete by selling at the “lowest price”. But it’s a tactic that 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. It also becomes harder to make the profit you want.

When you set a precedent, it’s difficult to change it.

Charging premium prices is more practical than some might think. There is a direct correlation between price and value. The more something costs, the more value it is perceived to have. Remember, people will pay you more for something if you show them why they should.

The “Niche Down” Strategy

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 more likely to understand the problems you face. You’re also more inclined to believe they are better qualified to provide a solution.

While choosing a specific niche can pay dividends, it can be a mistake if you do it for the wrong reasons.

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

In many ways, this is like starting over.

Niching down an effective way to create unique value but choose your market wisely when you do.

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 with your audience.

For example, many businesses assume people understand what they do. But you might discover that they don’t understand your business that well at all.

Don’t make this mistake. Instead, educate your audience on what you do and the unique value your product or service offers.

Clear communication builds more value. It also positions you as a reliable resource, which establishes credibility and trust.

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

Sustain a Competitive Advantage With Branding

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

Whether you realize it or not, this 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.

Branding your business helps you create the right impression.

Here are some examples of how branding helps companies sustain a competitive advantage:

  • attracts customers that are more qualified and profitable
  • makes it easier to communicate your value
  • improves efficiency, and makes prioritizing goals simpler
  • ensures clear marketing messages, which makes them more effective
  • builds more value for your offers
  • develops a stronger connection with future and existing customers


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

We’re 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