A Differentiation Strategy for Small Businesses That Can’t Go Wrong
If you want your small business to stand out, grab attention, and show prospects that you offer the best solution available, use this strategy.
Do you want more people to see the true value of your product or service?
Are you tired of losing sales to competitors making big, bold, promises—knowing full-well they can’t deliver?
You’re not alone. Time and again, the effort we make to communicate our value is devoured by the noise. It’s enough to make you wonder if building the business you want is possible.
But believe it or not, there are a lot of people out there right now looking for what you offer. Unfortunately, they can’t see why they should choose your product or service because they are being inundated with more marketing messages than they can filter.
When it comes to getting more customers, many small business owners desperately hope to stumble onto something that helps them cut through the noise. But rather than relying on luck, marketing hacks, catchy headlines, or big promises, I would like to show how to get your target market’s attention using a brand differentiation strategy.
Because only the best brands win.
What is a Brand Differentiation Strategy?
Simply put, a brand differentiation strategy is designed to create and promote unique characteristics and traits for a company, product, or service.
The marketplace is getting more competitive by the day, which means it’s more challenging than ever for your prospects to see how your product or service stands apart from others like it.
You may be discouraged by reading this, but there is good news. You already possess everything you need to create brand differentiation. But before I show you how, I would like to address two common selling positions most small businesses take and explain why you should never rely on them.
Two Terrible Brand Differentiators
When I ask a business owner why someone should buy from them, I almost always receive one of the following responses, or both:
- We provide great service.
- We offer affordable prices.
These two statements will not convince anyone to buy what you’re selling. Why?
Because your competitors make these same claims. People have heard these promises so much they no longer have impact, if they ever had any at all. Yet these remain popular selling points for the average small business.
It’s understandable why business owners attempt to position service as a differentiator. Good service is something customers want yet seems so difficult to find. However, your prospects can’t know if you provide great service until after they become a customer. Only then will you have the opportunity to prove it.
When service does play a role, it’s usually presented in the form of added benefits that accompany the sale of higher priced products and services where profit margins allow concessions to be made.
Selling at lower prices is a weak—not to mention, dangerous—tactic. Let’s look at some terms many businesses use when competing on price and why they should never be part of your differentiation strategy.
Cheap, Affordable, and Best
These words are plastered all over company websites, social media profiles, and advertisements. However, all three fall short of convincing anyone to buy because they are subjective.
Each individual has his or her own idea of what is “cheap”, “affordable”, and “best”. Therefore, it’s up to the customer to determine whether your price is too high or just right for them.
As one example of how selling at the lowest price can backfire, let’s assume you’re in the healthcare industry and sell a supplement for $30 a bottle. Let’s also assume other comparable products sell from $35-$40. As it stands, yours is the cheapest.
So far, so good.
But when a competitor reduces the price of their supplement to $30 or a new one enters the market at that price—which will happen sooner or later—your advantage goes away. If you want to remain the cheapest, you must lower your price again (to less than $30).
Yet it’s likely that costs to produce or purchase the product will remain the same or perhaps even rise over time. This means less money will go in your pocket.
Attempting to maintain the cheapest price is a bad growth strategy.
Instead of competing on price, let’s look at some real differentiators and how you can leverage them to stand apart from competitors, attract qualified prospects, and win more sales.
The Obvious Brand Differentiator
The first component of your differentiation strategy is one you should have no problem incorporating into your business model—you.
Many business owners are hesitant to incorporate more of themselves into their branding and marketing. They shy away from letting their true colors show or from sharing their life or business philosophy with prospects.
Instead, they make a lot of effort to be what they think their target market wants them to be. They believe that doing this will attract more buyers. But the customer-first rule does not always apply, especially when it comes to a differentiation strategy.
This research from 2019 revealed that 76% of consumers surveyed value the experiences they get from the products and services they buy and the companies they buy them from.
In fact, they care more about “inspiration and meaning” than any other aspect.
Consumers are tired of mass-produced, mass-marketed goods and services and the companies that peddle them. They have no tolerance for poor or even average quality. They are instead searching for businesses that display authenticity and have a genuine desire to help them.
The best way to give your customers what they want is to share your values, beliefs, and philosophies. This doesn’t mean you should create controversy or make bold statements for the sake of getting attention. Rather, create a purpose-driven brand mission and build your business around it.
Create an Identity
How do you want people to perceive your business? What images or thoughts do you want prospects to get when your name comes up? Don’t be afraid to brag on yourself a little because no one is going to do it for you.
What can you do better than anyone else? Focus on accentuating these strengths and build value around them. People will pay more if they are confident the person they’re buying from is an expert in their line of work.
Pay attention to the impression you make. Your brand image is a reflection of the quality of work you do. It must look and convey professionalism. Don’t cut corners when getting design work done.
Also, keep in mind that you must teach your prospects what they need to know about your industry to help them make a good buying decision. For example, if you’re a health coach, people may not understand how your diet and exercise plan is better than a competitor. It’s up to you to show them what sets yours apart. Educational content such as blog posts and videos are an excellent way to establish credibility, authority, and trust.
Part of ensuring quality is knowing what your customers expect from your product or service. The time to learn this is before you sell anything. Talk with people and find out what their expectations are and be sure you’re prepared to follow through. Then, take it a step further by delivering even more than they have asked for.
Customer feedback is a valuable source of information for multiple reasons. Don’t be afraid to ask tough questions. The answers you get may not always be pleasant, but if you want to establish a truly great product or service—and ultimately, a great business—you must be able to deliver at the highest possible level. The only way to know this for certain is to ask the questions other businesses are afraid to ask.
As one example, talk with your current customers and find out what almost kept them from buying. Most people won’t tell you unless you ask. This information will help you correct unintentional mistakes or make other improvements in your sales process you may have overlooked.
What About the Brand Story?
The brand story is perhaps one of the most underused and misused branding tactics. Most companies have a mission statement on their website or a biography of the owner that discloses some personal details, such as why they started the business, past experience, or personal interests. But none of this conveys the essence or intent of the brand story.
The purpose of the brand story is to build interest in the business and create a link between its products and services and target market. To do this effectively, you must show some vulnerability and empathy for your customers. You can’t be afraid to reveal a degree of weakness, perhaps in the form of past mistakes, lessons learned, or even regrets.
You can also use the brand story as an opportunity to demonstrate how your product is better than competitors by explaining the process with which it is made or any other information relevant to its production. This applies to companies that sell physical products as well as service providers.
Proof Beyond a Reasonable Doubt
One of my favorite parts of a brand differentiation strategy lies in proving—beyond a reasonable doubt—that you can deliver at a high level and offer more value than competitors. This is the essence of a true differentiation strategy.
Just as an attorney must build a case for her client that sways the opinion of a jury, you too must build a case for your business, product, or service. To build that case, you must supply evidence to your prospective customers that you offer the best solution available.
The evidence you use to build this case largely depends on the target market segment. You must know them well—what they value, how they feel, what life for them is like right now and how you can change their lives with your product or service.
You must also communicate using their language. How do they describe the problem they have and what words do they use when looking for a solution?
This is one of the most powerful components of a brand differentiation strategy.
While it would be impossible to list every element of a brand differentiation strategy in this article, the tips I have provided here will allow you to create significant separation between you and your competitors.
If you have any questions, email me personally at email@example.com.
Until next time,
P.S. Do you want to build and develop a brand strategy that will grab attention and make your customers take notice? Click here.
We equip visionary entrepreneurs and small business owners with the knowledge and resources they need to stand out, communicate their value, and make more profit.