So what makes you different?
The popular answer is: We are much better and cheaper than our competitors.
Lower price is seen as a competitive advantage.
The problem with lower price is your competitive advantage is that what happens when the competitor lowers their prices below yours? Then what?
Will you lower your prices again to gain your advantage? What if they lower price again?
Then this becomes a race to the bottom.
The problem with the race to the bottom is that you might win it and be bankrupt. Even worse, you might come in second and not profitable.
In the long run, to be the cheapest is a refuge for people who do not have the flair to design something worth paying for, who do not have the guts to point to their product or their service and say: “this is not the cheapest, but it is worth it.”
Let’s take price out of the equation and repeat the question: So what makes you different?
How do you help your customers get results differently to your competitors or alternatives?
Why should we invest in you?
Knowing what makes you different from the competitors shows that you have researched the market and know what competition is out there.