When billionaire investment oracle Warren Buffett talks, people listen.
When he coined the term “economic moat”, it was immediately ensconced in the business lexicon.
An economic moat is a distinct competitive advantage a company has that allows it to protect its market share and profitability. It’s often difficult to replicate – and thus creates an effective barrier against competition.
Get past the medieval imagery, and you’ll realize the concept holds water in the competitive world of freelance work.
Your business is your castle. Protect it.
Build a moat.
As a freelancer, you’ll know the market is a Wild West.
With the steady flow and availability of information, advantages or distinctions in products and services can be short-lived. They’re gobbled up by competitors who want to capitalize on novel ideas by replicating them.
The truth is, your top-shelf item could be relegated to the bottom drawer at any time by an upstart competitor.
Don’t make it easy for them.
Step back from a potential race-to-the-bottom price war with low-cost competitors. Instead, make value your focus.
If you haven’t already, create a UVP (Unique Value Proposition). Your UVP is a clear statement that details the benefits you offer, explains how you can meet your customer’s needs, and establishes what sets you apart from your competitors.
Check out what competitors offer, and tease out their value propositions. This will help you formulate a UVP that differentiates you.
Review the more popular freelance sites, and look at some of their user portfolios. What exactly are clients getting for their money? Determine where there are weaknesses so you can focus on establishing superiority in those areas.
Check out social media and online forums used by potential clients to identify their needs and interests. Align the benefits you can offer with their most pressing issues.
You can outdo your competitors by performing your work differently, offering different services, or targeting different customers. Become more efficient by establishing clear workflows for each of your tasks.
And by showing that you can provide a service and customer experience that’s superior and unique, you’ll establish your distinct value.
Build A Moat Around Your Brand
A strong brand is a virtually unassailable moat – because it’s yours alone.
Think about who you are as a designer/technician/writer, and what sets you apart.
Review all your services. Figure out what makes them unique – and convey this with consistent messaging across your brand.
As other entities (both freelancers and companies) focus on sales growth, they may let important things slide – things like service customization and quality.
Choose to invest more time and care in clients. Deliver on customer experience, service, and quality in ways that overbooked or under-motivated competitors don’t.
Pick up that dropped ball and run with it.
Find Your Niche …
If the market is veering towards saturation, develop a specialty and look into niches where you can put it to use.
For example, as a developer, you could focus on niches like creating Shopify apps or SaaS websites. As a writer, you could offer your services as a family biographer.
The benefits: you’ll have far less competition, a focused clientele and, as a skilled specialist, you’ll enjoy much better paydays.
… Or Expand Your Menu
Consumers prefer choice when they shop – so the more services you can legitimately offer, the more likely browsers are to become customers.
Look at the competition – specifically, at people with skill-sets similar to yours. What additional services do they list? How does it compare to what’s in your wheelhouse?
Find market opportunities that exist in your broader niche. Up your game by learning and marketing new skills. Mix it up. For example, consider complementing marketing savvy with design skills.
The bigger and more varied your menu, the larger and more diverse your crowd of diners will be.
Put Yourself In Their Shoes
If you’re targeting eCommerce customers, it makes sense to open up your own online storefront. Feature your hobby projects. You may not sell a lot of your tie-dyed T-shirts, but you’ll gain valuable insights into eCommerce challenges and opportunities.
Don’t stop at being a tech or design wizard. Investing time in learning about the business end of your client’s product or service is important. Remember, your goal is to help your client solve a problem. By gaining a fuller understanding of their business overall, you’ll be in a much better position than a disinterested competitor to help them meet the challenges they face.
See The Big Business Picture
Okay, you’re a solopreneur – but you can’t operate in a vacuum.
If you want to keep pace with competitors, consistently finetune service, and remain viable, you need to know what’s happening within your industry. That means:
- Staying updated on industry news via credible websites
- Signing up to get info from relevant newsletters, subscription sites, and industry groups
- Following social media groups that cover your industry
- Keeping tabs on new technology developments and service options that may impact your business
Mark Your Territory
Once you’ve decided what your unique offering is and how to present it, take legal steps to protect it.
Designate your territory – and hold on to it – by using trademarks, patents, and licenses. When you patent your product, you make it untouchable for 14 – 20 years. A trademark buys you name protection for anywhere from six years to … “indefinitely”.
Which gives you ample time to gain customers and establish a dominant position in the market.
But don’t rest on your laurels.
The growth in the freelance market is unquestionably a double-edged sword. On the one hand, it means more potential work. On the other, it means more competition, increasing market saturation, and, most importantly, it means finding ways to consistently stay ahead of – and distinct from – your competitors.
Define your own value, skills, worth, knowledge, and experience – and capitalize on them to create a compelling competitive advantage. That, in a nutshell, is your moat.
This isn’t a one-and-done process. It requires regular monitoring and adjustment to reflect changes in the market, in the competition, and in your business.
But in the long run, your moat will be a powerful defensive tool to help you safeguard and sustain what you’ve worked hard to build.
No alligators required.