A Differentiation Strategy for Small Businesses That Works Every Time

If you want your small business to stand out, grab attention, and show prospects that you offer the best solution available, use this strategy.

Differentiation strategy for small businesses

Do you want more people to see how unique your product or service really is?

Are you tired of losing sales to competitors making big, bold promises—knowing full-well they can’t deliver?

You are not alone. For most small businesses, getting their audience’s attention and communicating value smothered by the noise. It’s enough to make you wonder if building the company you want is possible.

But believe it or not, there are a lot of people looking for what you offer. Unfortunately, your target audience is being inundated with more marketing messages than they can filter. As a result, people don’t remember you when they are ready to buy or can’t see why they should choose your product or service over a competitor.

When it comes to getting more customers, many small business owners experiment with marketing tactics, hoping to find anything that works. But rather than relying on luck, “hacks”, or big promises, get your target market’s attention with a brand differentiation strategy.

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 each day. This makes it 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.

Ever.

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 from you. Why?

Because your competitors make these same claims. People have heard these promises so much they no longer make an impact, if they ever made any at all. Yet, these remain popular selling points for the average small business.

It’s understandable why business owners attempt to leverage service as a selling point. Everyone wants good service, yet it is in limited supply. However, your prospects can’t know if you will provide excellent service until they become customers.

Only then will you have the opportunity to prove it.

Service can be a practical selling point when presented as an added benefit of a higher-priced product or service. In this case, the higher profit margin allows the company to give the customer extra attention without compromising quality.

But selling at lower prices is a weak—not to mention, dangerous—tactic. So 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 their 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.

Here is one example of how selling at the lowest price can backfire. Let’s assume you are in the healthcare industry and sell a supplement for $30 a bottle. Other comparable products sell from $35-$40.

As it stands, yours is the cheapest. So far, so good.

But when an existing 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. So to remain the cheapest, you must lower the price tag 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 into your pocket.

Attempting to maintain the lowest price is an unwise growth strategy.

Instead of competing on price, you need real differentiators to stand apart from competitors, attract qualified prospects, and win more sales.

The Obvious Brand Differentiator

The first component of your differentiation strategy should be easy to incorporate into your business model—you.

Many business owners are hesitant to make themselves the focus of their branding and marketing. As a result, most avoid letting their true colors show or 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. Naturally, 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. Instead, develop 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 will 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. Therefore, it must look professional. Don’t cut corners when getting design work done.

Also, remember that you must teach your prospects what they need to know about your industry to help them make a good buying decision.

For example, suppose you’re a health coach. In that case, people may not understand how your diet and exercise plan is better than a competitor’s. 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.

Your brand is the link between you and your customers min
Utopia usually lies somewhere between the business’s goals and what the customer wants.

Exceed Expectations

Part of ensuring quality is knowing what your customers expect from your product or service.

Determine customer expectations before you sell anything, if possible. Start by talking with people, find out what they expect when they buy something. Then, be prepared to follow through.

Customer feedback is a valuable source of information for multiple reasons.

First, don’t be afraid to ask tough questions. Of course, they may not always say what you want to hear. But if you’re going to establish a truly great product or service, you must be willing to honestly assess your business.

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 to demonstrate the product development process or anything else that makes it unique. This applies to companies that sell physical products as well as service providers.

If you want to know how to implement your brand story into a content marketing strategy, read this article.

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 differentiation strategy.

Just as an attorney must build a case for her client that sways the opinion of a jury, you too must make 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 depends on the target market segment. So, you must know them well—what they value, how they feel, what life is like for them, and how you can change their lives with your product or service.

You must also communicate using their language. For example, what words or phrases do your customers use to describe their problem and the solution they hope to find?

This is one of the most powerful components of a brand differentiation strategy.

Conclusion

It would be impossible to list every element of a brand differentiation strategy in this article. But, the tips I have provided here will allow you to create a significant separation between you and your competitors.

If you have any questions, email me personally at chris@goldenvineyardbranding.com.

Until next time,

Chris

P.S. Do you want to build and develop a brand strategy that will grab attention and make your customers take notice? Click here.

Chris Fulmer

Chris Fulmer

Director, The Golden Vineyard Branding Company