What’s Your Sustainable Competitive Advantage?

competitive advantageLet’s talk about strategy for a second.

If the Internet has torn down so many of the traditional barriers that prevented businesses from becoming successful, why is making money online so much harder than doing business in “the real world”?

Well, strangely enough, the lack of barriers is actually a disadvantage since it pushes more competitors into your market. This actually makes it HARDER to do business online, rather than EASIER.

Also, you must keep in mind that if you DO become successful, other people will begin to copy you… or even automate your tactics! If you haven’t properly defended your position, they can quickly move in to drown out your lead generation channel. We see this every day with successful online start-ups.

This is especially true of business models that rely heavily on PPC, SEO and Social Media marketing.

You can protect your position by firmly establishing a sustainable competitive advantage for your company. Since most of your competitors will be mainly focusing on easy sales and low-hanging fruit, you can intentionally go after markets that offer very difficult barriers to entry.

For example:

  • You might try exclusively targeting large companies. (Requires access to hard-to-reach high-level decision makers)
  • You could get a celebrity to endorse your company in exchange for equity. (This would give you access to a market/fan base that your competitors can’t reach)
  • You might try to get featured on national television or in major newspapers & magazines. (GoldenPalace.com has done a great job with this)

All of these strategies have 2 things in common. They are extremely difficult to implement, and nearly impossible to copy once you’ve got first-mover advantage. These are all long-term sustainable competitive advantage.

But once you attain this position, it’s very easy to keep it.

These sustainable competitive advantages are often all-or-nothing propositions. You have to commit to your plan and follow it through all the way. You either make it big or fail in spectacular fashion.

Unlike with SEO, your competitors will never be able to hire a team of off-shore workers to knock you out of your sustainable competitive advantage. You’ll be securely protected, with exclusive access to a lucrative customer base.

Let’s take a look at some online companies with true sustainable competitive advantages:

  • Ebay isn’t just an online auction site. They’ve invested heavily in establishing a strong presence as a community leader in a number of niches. They don’t just build customers, they cultivate long-term relationships.
  • Amazon has a patent on one-click purchasing, which prevents their competitors from offering a similar level of convenience. Also, they’ve established a strong community around the discussions and reviews of their products.
  • Microsoft has locked-in relationships with computer manufacturers that have allowed its operating system to become the “industry standard” for software developers.
  • Google has spent many years creating the most sophisticated anti-spam algorithms of any search engine, ensuring the best search experience and the most relevant results. IT would take many years and many millions of dollars to duplicate or improve upon what they’ve created.

Sure, all of the traditional online marketing channels are great for generating leads. But if your company is serious about long-term success, you need to pick a strong, focused position and just go for it. Throw all of your energy into being the best at something that your customers care about, and that your competitors will never be able to duplicate.

About The Guest Author: Paul Rudo has been a freelance business consultant for over 5 years. He specializes in B2B marketing for technology companies and organizations targeting geographically local clients.

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2 Comments What’s Your Sustainable Competitive Advantage?

  1. Bill Bliss

    I still go back to a basic form of marketing – establishing trusted relationships with your current clients and prospects. In his book “Go Givers Sell More” Bob Burg says that people buy from those they know, like and trust. He also says that each person knows an average of 250 other people in their network. This becomes the multiplier effect – if I work real hard at having just 10 highly influential people know me, like me and trust me, chances are great that they have a network far in excess of 250, and then I have these 10 people be my marketing arm – pretty soon, they are speaking about me from personal experience to over 2,500 and are doing more than just telling others about my company – they are singing our praises to others who need our services.

    While the internet can expand our reach, it is with those strong relationships that can’t really be developed over the internet, that will maximize our business and reach.

    Just my opinion!

    Bill Bliss, Author, Speaker and Leadership Consultant

    Reply
  2. Mike Stamatelos

    The internet brings globalization to the mom-and-pop stores on main street. It allows virtually any similar store in the world to be a competitor as if its storefront was right next door. Therefore, it is a great tool in the market for demanding differentiation. The good news is that there’s a lot of different ways to stand out online: all it takes is a little bit of creativity. A better designed homepage or nicer pictures of products may be all it takes.

    Kids are leading the internet charge. In fact, a local Pittsburgh entrepreneurship radio station is hosting some very young entrepreneurs today (Friday) from 3 to 6 pm on http://www.TAEradio.com. I believe that there is going to be three kids on it: it should be interesting!

    Reply

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