In my last blog, I talked about the importance of identifying your competitive advantage as a business owner, and marketing that advantage to show customers why they should choose you over a competitor. As a quick recap, I define “competitive advantage” as:
- How your product or service helps your customers.
- How your product or service is unique from other offerings available on the market.
It’s important to remember both of these elements as we walk through the steps of finding your competitive advantage, because you can’t have one without the other.
For instance, if your product or service was in high demand from customers, but you offered the exact same thing as everyone else in your industry, you wouldn’t have a competitive advantage. On the other hand, if you have a unique offering from anyone else, but there is no customer demand for it, that can’t be a competitive advantage either (and you may need to rethink your business strategy at that point!).
Now that we understand what a competitive advantage is, let’s move on to step one of identifying your competitive advantage(s) as a business: identifying and understanding your target market. This helps us get to the first part of the definition we just discussed. Before we even discuss our product or service, we need to take a deep look at our prospective customers.
Identifying your target market
Your “target market” means whoever you want to sell your product or service to. That may be the people who are already buying from you, but there’s likely a specific subset of those people who are your ideal customers. That’s who we want to focus on. (If you’re not currently selling to your “ideal” customer, that’s okay too – as long as you can identify who that ideal customer is.)
To get started with this exercise, think about one person (or company, if you sell B2B) who represents your ideal customer. You will be creating a basic buyer profile. (If it’s too hard to narrow down to one, you may want to do this exercise a few times and use a few different buyer profiles, but I suggest starting with one.)
Download this buyer profile template to make this step easy as possible!
Who is your target customer?
Start filling out your buyer profile with demographic information. For B2C businesses, this will be straightforward, including information such as:
- Age range
- Gender (if your offering skews to one gender or the other)
- Income level
- Family details (married, children, etc.; is this person in charge of purchasing?)
- Education level
If you are a B2B company, think about details such as:
- Size of company (by revenue or number of employees)
- How long have they been in business?
- Who in the company is the decision maker for your offering?
You want to be as specific as possible, but not all of these will apply to every business. Brainstorm and think about your ideal customer to start gathering these demographic details. You may need to do some additional research such as interviewing existing customers or sending out surveys.
What does your target customer care about?
Once you have demographic details compiled, it’s time to work on the most important part of the buyer profile, understanding what your target customer cares about. For this section, you want to get inside that target or ideal customer’s head, and ask yourself questions like:
- What keeps them up at night?
- What challenges do they face day-to-day?
- What do they value/what is important to them?
- What motivates them?
These questions are essential to help you deeply understand your ideal customer. The better you understand your customer’s needs, challenges and motivations, the better you can understand how to appeal to them through your marketing efforts.
If you’re not sure of the answers to these questions, again, that’s okay. It’s a good opportunity for you to do some customer research to learn more. Gathering this information will be extremely beneficial not only for this exercise but for the future of your business strategy and marketing efforts.
Once you complete your buyer profile, it’s time to connect your offerings to the needs of your clients and examine where you're unique from competitors.
If you're looking for more guidance on this topic, check out this full-length guide on identifying your competitive advantage.