How To Gain A Competitive Advantage and Succeed Online

Word on the street is you want to gain a competitive advantage online against, well… your competition. Consider your request approved.

Mission: To gain a competitive edge.

Location: A very, very competitive digital world.

End goal: To beat ALL the competition.

Mode of transport: This guide *right here*.

We’ll call it Mission Possible (but only if you listen closely). Let’s start with the basics.

What is competitive advantage?

Competitive advantage is a factor – or series of factors – that leads a business to outperform their competitors or rivals. To gain a competitive advantage over another brand is to gain valuable results in an area of your business to enhance brand awareness, traffic, engagement and conversions.

6 types of competitive advantage

There are different types of competitive advantage when it comes to marketing your business. Here are a few ways you can use to get ahead of your competitors:

1. Cost: Provide offerings at a lower price
2. Differentiation: Create a niche (eg. quality, quantity, sustainability)
3. Speed: Be the fastest to act (eg. product development, customer service)
4. Innovation: Disrupt the market with new products and/or business models
5. Geographic: Choose locations with easier access to resources and suppliers
6. Customer service: Offer superior support than others (eg. faster responses)

And the thread that ties these all together in the end? Your marketing. How you market your product, and how you play your competitive advantage is where it’s at. That’s why we’re here.

How to identify a competitive advantage

Step 1: Competitor research

You can’t work out your competitive advantage without knowing what your competitors are up to. Look into them as a business; who they are, what they’re offering, how they’re positioning themselves in the marketplace, who their target audience is, and how well they’re doing.

No doubt that you’ll have competitors in different fields – some direct competition, some indirect, and some potential. For this exercise, we suggest starting with your direct competition as this looks more closely at the product, pricing, placement – 3 of the 4 Ps of marketing.

You can delve deeper into the promotional side of things with competitor analysis, looking into their content, SEO, PPC and more further down the line.

To perform a thorough process of competitor research, start by looking through each of your main competitors’ websites. Check the About page, analyze the messaging, and stalk their socials. However, this is just scraping the surface of the secrets and insights you can find out about your competition.

Use competitor analysis tools like Similarweb to dive deeper into the data, including digital performance and engagement metrics to see how your website compares.

On top of your competitors’ performance on paid and organic search, see how your target audience overlaps with that of your competitors in the Audience Analysis tool, with visuals, other common audience interests, and data like gender and age.

You can even find your competitors’ top performing pages using both Popular Pages and Organic Pages. This could give you a good inclination of what USP or niche your competitors are focusing on, what’s drawing your audience in, and what’s getting the most page views as a result.

Here, you’ll see newegg.com’s Organic Pages – these pages are the most successful, traffic-driving pages for SEO.

As you can see, the brand doesn’t focus on selling products, but also provides authoritative knowledge and help via an interactive calculator which could give them the competitive edge versus their competitors.

Step 2: Review your product offering

Take your findings and start to look at your own product offering. Make comparisons with your prices, expenses, locations, and acquisition strategies and work out how you can fill the gaps, and gain a competitive advantage.

Ask yourself questions like:

• What has [insert company name here] got that we don’t?
• What IS our competitive advantage?
• Where is working for competitors and not us?
• Is our product reasonably priced?
• Do we have room to lower the price?
• Are we working in the most cost-effective way?

Benchmarking yourself against your competitors helps you understand your industry’s standards, particularly in terms of pricing.

Step 3: Learn from your customers

There is so much you can learn from your customers – both current and prospective. Use your sales, account management and customer success teams to gather information, insights and opinions straight from the horse’s mouth.

It’s likely they’ve gone through their own research, to see what the market has to offer for the solution they’re looking for. During this research, they would have weighed up pros and cons of each solution to work out what stood out as best for them.

The pros could look something like:

• Lower costs
• A money-back guarantee
• Free delivery and returns
• More engagement on social media
• Higher trust and authority

Use this knowledge to your own advantage… and to your competitive advantage. Whether your teams are speaking to them first-hand, detailing those closed/lost deals, or sending out surveys, this information is great for understanding what your competitive edge is (and what you should work on).

Why not kill two birds with one stone and use your outreach with current customers to build on your testimonials?

Step 4: Learn how to leverage your competitive advantage

Now you’ve spotted your competitive advantage AND confirmed it with some of your clients, get working on the fourth P of marketing. Pssst.. that’s ‘promotion’ for those of you that don’t want to scroll up. 

Embrace your competitive advantage; let it play a huge role in your sales and marketing strategies. Stand by it to stand out from the (very competitive) crowd.

Let’s look at a few examples of companies with strong brand positioning, that promote their competitive edge openly to win more customers:

1) ASOS: Free delivery and free returns

ASOS stands out from its online fashion competitors by offering free delivery and returns to its customers. Despite not having its own highstreet store, this customer benefit takes on in-person shopping too because it takes out the effort of visiting stores, changing rooms, queuing and more.

You can shop ‘til you drop in your own home – except skip the dropping, because it’s delivered straight to your door.

2) Digital performance and engagement metrics

Buy more, but get money back? Works for me. Money is one thing in this day and age that not many people would turn their nose up at, and American Express have monopolized on that.

By forming partnerships with brands that people use day-to-day or for special occasions (luxury holidays, where you at?), it’s a easy win for the customer choosing Amex.

3) Patagonia: The message behind the brand

Patagonia takes transparency to another level, with some very controversial marketing techniques. But it works.

One big example was their ‘Don’t Buy This Jacket’ campaign released just before Black Friday, which backed its core values of quality, integrity, environmentalism and justice, as well as its overall message of “Buy less, demand more”.

In this campaign, they were selling clothing but also selling the open and honest voice behind the brand – one that wants to promote a greener, more environmentally-friendly world, and one that spreads the news about the impact of purchases on Black Friday (and beyond).

You don’t see marketing like this every day.

How to gain a competitive advantage

1) Provide a quality product

Your promotional skills and choices might be fantastic, but without the product to back it, you’ll lose money quickly.

Work hard to deliver both an exceptional product and exceptional user experience to keep the returns, money-backs, and the bad reviews at bay.

This doesn’t only include the product or service you offer, but everything that comes with your brand. Think about your content strategy, your email marketing, your social media comms, and make sure it all offers valuable (and actually enjoyable) material for users and prospects to engage with.

2) Get the price right

While you don’t want to underprice your product, your competitor research should allow you to see where – or if – you can afford to lower the price somewhere.

Of course, it’s not just about the price point for your customers, but for you as a business too – you’ve got a business to run after all. This all needs to be considered, and if it’s on the higher end, you need to big up that niche of yours.

3) Invest in relevant marketing

Look, TikTok isn’t for everyone. Don’t feel like you need to learn all about the next new TikTok trend… unless your target audience is on there.

But where is your target audience? Where are you getting most of your traffic from? Where is your competitor getting most of its traffic from? Explore competitive traffic gaps in order to understand which of these channels can provide you the edge.

Here is a comparison of how two big US brands have used their marketing channels in 2023 so far. While Target is the underdog in this situation, the two brands follow similar patterns, seeing most of their traffic coming in direct to the websites, and organic search coming close behind.

By comparing an overview of your marketing channels with your relevant competitors, you can see where you have the competitive edge and the opportunity to gain the competitive edge.

Where your competitors are lacking, you could be winning.

4) Embrace your niche

Q: Who wants to be the same as everyone else? A: No one that wants to beat their competition, that’s who.

Sure, you can want the same successes as another brand (Apple, how DO you keep getting us to buy more expensive phones that look no different to before?) but how you get there, that should be your own journey.

Find your niche, embrace the niche, win the competitive advantage.

Speaking of Apple, let’s use Similarweb to take a look into its efforts on paid search. In Product Ads for example, you’ll see one of the top promoted paid ads (with a total of 499 keywords) is the Apple Gift Card.

Now, Samsung knows it doesn’t quite have the ‘Apple effect’ – a spell that so many people in this day and age are under. Instead, Samsung focuses on the temptation of lower prices and a broader range of technology.

5) Divide and conquer

Gaining a competitive edge isn’t all about winning more overall revenue or more customers than your competition. In fact, dividing that huge ambition down into targeting specific geographies, markets, business sizes, and demographics one by one is often a more maintainable strategy longer term.

For example, your competitive advantage could be that you’re the go-to payment platform for small-to-medium sized businesses (SMBs). Or perhaps, you’re Gen Z’s new favorite and affordable fashion brand. Maybe you want to dominate the States before looking to move out into new markets.

Whatever you’re going for, in an ultra-competitive time for businesses online, it’s always worth finding the micro-opportunity to thrive in, before conquering the rest.

6) Encourage referral and loyalty schemes

Consumers are 77% more likely to buy a product if their friends recommend it. That’s the power of word of mouth, folks – and that’s exactly why we’ve made this our last point of how to gain a competitive advantage.

Step 1: Discover your competitive advantage

Step 2: Act on your competitive advantage

Step 3: Solidify your efforts and spread the love with positive word of mouth

The most effective way of doing this? Introducing referral or loyalty schemes.

Your customers love to feel special – just like you do as a product. Offer VIP offers like pre-sale access or exclusive discounts to your customers, introduce a referral program where there’s an incentive to leave a review or get another business to sign-up to your services, or even give new users an incentive to sign-up.

Pushing for referrals via positive word of mouth is like a competitive advantage on a competitive advantage. That’s right, the cogs of gaining competitive edge never stop turning – which leads us nicely onto our next section. ⚙️

How to maintain a competitive advantage online

The digital and search landscape is an ever-changing one. Your users will change, their buying behavior will change, how they use search will change, your biggest competitor’s strategy will change – and you’ve got to change with it.

With so much change, our main piece of advice is: Act fast to adapt. 

But to act fast, you need all the insights about new search trends, algorithm updates (and how they impact your performance), your target audience, and your competitors. And you need these insights when they actually happen – not a month later like *some* data and insight platforms.

To maintain a competitive advantage online, you must regularly perform:

• Digital marketing competitive analysis 
• Keyword competitive analysis
• Content competitive analysis 

And monitor the SERP on a daily basis. Using data analytic tools like Similarweb can help you stay on top of all these things, and more.

Monitoring the SERPs could not be easier with Similarweb Search Tracker. With a rank tracker and a brand protection tool, Search Tracker gives you a holistic view of what’s happening on the search, looking at and differentiating between paid and organic results so you have full visibility and know exactly what’s going on on search.

You can even set up a competitive tracker so you can keep a close eye on up to 25 competitors. And by “close eye”, we mean a complete and fully up-to-date dashboard showing changes in your competitors’ strategies and digital performance, as well as monthly emails straight to your inbox with highlights.

Defeat the competition with data

When you’ve got the right data, you’ve got less drama.

Similarweb gives you all the insights you need to gain a competitive edge in your digital marketing efforts, but don’t take our word for it.

Try Similarweb for free, or book a call with one of our specialists for a free demo, customized to your business needs.

FAQs

Why is gaining a competitive advantage crucial in digital marketing?

Gaining a competitive advantage is crucial because it sets your business apart in the digital landscape. It helps you attract and retain customers, increase market share, and ultimately achieve long-term success.

How can I identify my online business’s unique selling proposition (USP)?

Your USP is what makes your business stand out. Identify what sets you apart from competitors – whether it’s exceptional customer service, innovative products, or a unique brand personality. Conduct market research and gather feedback from customers to understand what they value most.

Is competitor analysis important to gaining a competitive advantage?

Yes, monitoring competitors is essential. It helps you stay informed about industry trends, identify gaps in the market, and learn from their successes and mistakes. Regular competitor analysis ensures you can adapt your strategies to stay ahead.

How important is customer feedback in gaining a competitive advantage?

Customer feedback is invaluable. It provides insights into customer preferences, pain points, and expectations. Use feedback to improve your products, services, and overall customer experience, which can give you a significant edge in the market.

How can I leverage data and analytics to gain a competitive advantage?

Utilize data to understand customer behavior, preferences, and the performance of your marketing efforts. Analyze metrics such as conversion rates, website traffic, and social media engagement to make informed decisions and optimize your strategies.