Differentiation is one of the biggest marketing issues in small business. Its role is clear, if the consumer cannot see a difference between you and your competition, they will look at price to set you apart. So to avoid continually competing on price then you need to differentiate. Easier said than done though for many small businesses. To help with this, I’ve put together simple three-step process to help small businesses to find their points of differentiation.
1. Know your competition intimately
This first tip is VERY important. You need to study your competition intimately and document their product, services and promotional offers. Just put a spreadsheet together and list them all. Also make a note of what marketing messages they use to sell their products. This is a really important foundation that will really help you to understand your competition.
2. Document your own products and services
Now that you’ve studied and document your competition, you can determine how your products and services compare. This will help you compare your offer against the competition and come up with ideas to be different.
3. Change every offer that is the same.
During this process, you will find products, services and promotional offers that are the same as your competition. For each, change the offer to make it different. As an example, if you are a coffee shop offering a coffee and cake deal and your competitor down the road is offering the same (and the coffee and cake are as good), the decision will come down to price. But come up with a unique offer, that is different to the competition and you can take price out of the decision. You will be competing on the offer, not the price.
The main challenge with differentiation is putting in the ground work to study the competition. Once you lay that foundation, then differentiating your business becomes much easier.
