How B2B companies can build a sustainable competitive advantage?

Competitive advantage is a set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. It is the reason behind brand loyalty, and why you prefer one product or service over another. There are three different types of competitive advantages that companies can use. They are cost leadership, product/service differentiation, and niche strategies.

In this article, we will be looking at the product /service differentiation in detail.The key to success lies in achieving real differentiation. (in the eyes of your customer) .

So, what is a real differentiator?

A differentiator is a characteristic of your product/ service that separates you from key competitors and gives you a perceived advantage in the eyes of your target customer.

What are the ways to evaluate a differentiator?

To be successful, a differentiator must meet three important criteria:

1.  It must be true & authentic. You can’t just make it up.

2.  It must be important to potential clients. If not, what’s the point?

3.  It must be provable. If you can’t demonstrate that it is true, it won’t be believed.

Most differentiators fail on at least two of these criteria.

What are the different types of successful differentiators?

1. Industry Specialization.

Your clients value the specialist in their industry. But you need to be careful, you can’t specialize in too many industries. If you try to show that you will lose credibility.

2. Role Specialization.

Role-based specialization is also quite successful, especially if you combine it with an industry focus.

3. Specific service specialization

This is also quite successful, especially if the service you specialize in is rare and hard to find. But beware, unique service offerings can quickly become mainstream.

4. Offer a truly unique technology or process.

Being truly unique does not mean your process starts with assessment and ends with monitoring results and adjusting. It means a totally different approach to solving a problem.

5. Deep understanding of a target audience.

A key differentiator for some firms is their in-depth understanding of an audience. Your firm might specialize in marketing to millennials so your clients might be gadgets, clothing retailers, education institutes etc.

6. Highly qualified staff

Imagine your staff consists of PhD holders or rocket scientists. Jokes apart if your staff are highly specialized it can become an excellent differentiator. 

7. Specialize in clients that share a common characteristic.

This differentiator is focused on a characteristic of your clients other than their industry or role. Let’s say you provide remittance services to expatriates. They might be from any country, in any industry or any corporate role, yet you will have a competitive advantage.

8. Specialization in solving a specific business challenge.

Here, the spotlight is not on the client but on the nature of the business challenge they are facing. To work, it must be a challenge that is easily recognized and tough to solve without specialized skills and experience. Helping firms with VAT returns filing, helping them secure top certifications or government contracts etc.

9. Have one or more individuals who are industry influencers.

This is a time-tested strategy that works very well. Having the country’s top expert in your speciality is a very powerful competitive advantage. Many firms have been built on this differentiator alone. Add multiple high visibility experts and you will have a compelling and very valuable brand.

10. Offer a unique business model.

Everyone in your profession bills by the hour, but you offer a fixed fee. Voilà, a perfect differentiator is born! A unique business model can be both meaningful and easy to prove. But be watchful. If it works well, you are likely to accumulate imitators.

11. Offer access to a unique set of information

Sometimes, access to certain information can be very valuable to potential clients. Do you have benchmarking data that no one else possesses? Some firms have built very valuable practices around proprietary data not easily duplicated.

12. Offer a unique set of contacts or relationships not easily accessible.

While the previous differentiator focused on information, this one is focused on relationships. Public relations firms have long used relationships with reporters and editors as differentiators. What relationships can your firm bring to the table?

13. Differentiation by clients

Having an impressive client list can be a differentiator. Some firms differentiate themselves based on their client list. For example, if your firm serves the banking market and your clients are the top 5 banks, you have a differentiator.

14. Differentiation by Size

We are the largest…etc can work especially in the middle east. Large size sends a powerful signal of assurance to your potential customers.

15. Differentiation through a relationship with the principal or a large company.

A close relationship with a large market leader can be a great differentiator. E.g platinum partner of google or SAP etc

16. Differentiation through great accomplishment.

Some firms can build a strong brand based on achieving a milestone or a great accomplishment. So, you may have invented a patent or have created a big difference to the society etc.

17. Differentiation through results.

Here the differentiator focuses on a valuable result. If you can guarantee the outcomes then this can be a great differentiator.

18. Differentiation through design/ system or communication.

Most brands or services companies tend to look and act a lot like their competitors. Well, a very different look and feel can be a powerful differentiator for this exact reason. Think Apple- They are totally different from the other smartphones due to their own operating system etc.

About the author

Shantanu is the founder of an award-winning B2B business growth consulting firm & passionate about helping startups and mid-size companies grow better & faster. He has been empowering CEOs, CMOS and Sales Leaders of B2B companies build high growth firms. As a successful entrepreneur who has successfully built & sold multi-million $ business, he knows what it takes to really differentiate, scale & build a high growth company. Shantanu is also involved in building thriving communities, so in partnership with Dubai Government & leading brands, he has been organizing business growth summits like SME World Summit, Global Innovation Summit, Emirates NBD Global Business series etc. Over the last 6 years, he has brought together over 20,000 entrepreneurs & business leaders to learn the battle-tested strategies of building great businesses. Reach out to him to avail a free business strategy assessment session. Visit www.spigroup.ae to learn more.