Are you wondering about how to differentiate your business from competitors?
You’ve got to stand out to survive and thrive in business. Check out these powerful ways to differentiate your business from competitors and win…
It’s getting harder and harder to stand out today. There are more companies making more and more noise. At the same time consumers appear to be getting more and more savvy and particular about who they will take a chance on doing business with.
To be compelling enough to gain their attention and action, you have to be different. So where do you start?
Start With SWOT
The smartest way to choose how to differentiate your business from competitors is to begin with your SWOT analysis.
Considering your Strengths, Weaknesses, Opportunities and Threats will guide you to where it makes sense for you to highlight your differences, and not. You clearly want to differentiate towards your strengths and opportunities and where you can excel and hold that competitive advantage.
Too Little Vs. Too Much Differentiation
Is it possible to differentiate too much or too little? If you don’t have a powerful and obvious USP yet, you’re not differentiated enough. Think about this as the one thing you are known for. It is probably a part of your slogan and tagline. This should be something you can do 10x to 100x better than the competition.
The sweet spot is usually being different enough to grab attention and stand out with more value, but also being normal enough that people get it.
If you are too far out there and it isn’t like anything they’ve seen before, they may be too confused to buy.
You may offer a lot of great features and differences, but know your one thing to shout about and be known for. The others are just nice perks.
Ideas For How To Differentiate Your Business From Competitors
This may not be a strong and sustainable differentiator when thinking how to differentiate your business from competitors, but it can be an appealing one for customers. If you choose to differentiate by being the cheapest, make sure that you can really afford to continue to be the cheapest and remain in business when the price wars start.
You can also differentiate by price on the high end. You can be the most expensive option.
You can differentiate your business with your brand identity. This may simply be the colors and fonts you use. It can be the style. It can be the words you use.
You may be the modern, younger and hip version like Richard Branson has done with some of his Virgin brands.
You can be the buttoned up suit and tie version in your business, like LinkedIn versus Facebook in social media.
Or maybe it is again being the luxury option which suits you best.
Convenience is increasingly becoming a popular and in demand differentiating factor. It’s what Uber, Amazon, Airbnb, and many other new startups have been winning on.
Offering delivery and free shipping or apps are obvious ways to increase convenience. Or at least meet current customer expectations.
Location, how you communicate with prospective customers, and how easy the process of buying from you is are all ways you can make things more convenient too.
Speed can also be a great answer when addressing how to differentiate your business from competitors. Think about the fast food phenomenon. Tesla and Ferrari versus Volvo. Private jets versus commercial flights. Or Prime versus just about anything else.
How much faster can you go than the competition?
How much better value can you offer your customers? If you want to build a billion dollar business the investors are going to want and expect that you know your customers inside and out and why they really appreciate so much your product or service.
In this regard, keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Note that this is different from just being cheap and differentiating on price. The Dollar Tree is a brand. Walmart has its ‘Great Value’ brand. Neither really present real value to customers. They are the cheap option. You get something cheap and inferior for a cheap price. From some people, and for some products that is fine. It may work for paper towels when there is very little difference between the good brand and the 50 cent brand. It may not work for serving drinks at a party or for the food you feel comfortable putting in your body or giving to your kids.
Value is different. It is about what people feel they are getting versus the price. This is critical when thinking how to differentiate your business from competitors.
Costco is one method of this. People feel they are getting more value, from getting more goods for a lower price by purchasing in bulk.
For software startups and enterprise businesses the value differentiator may be how much the ROI is on the product. To others, paying $50k or $1M a year for a piece of software to save or gain 10% in revenues or costs may sound like a horrible deal. Though if you are doing $10B a year in business that can be a huge return and value proposition.
At the high end, exclusivity, prestige and the chance to be an early adopter of new fashion, innovations or smart decisions can all be a form of value. It feeds the ego, and for many that is priceless. It doesn’t matter that they may be overpaying for the new iPhone by $1,000, or $20M for a Manhattan penthouse. The point is that the feeling they get from overpaying and having the newest or most expensive is more valuable to them than the money.
Superior customer service can be a fantastic differentiator. This is my favorite one as part of the ways on how to differentiate your business from competitors. At least if you can really deliver on it and maintain it. Can you consistently be more responsive, go above and beyond expectation and deliver satisfaction?
Perhaps all you need is the right story. Just make sure it is authentic. This is one of the advantages of being an entrepreneur. This is essentially to craft your own story and to create your own future. I cover this topic in detail inside the video below.
People choose brands which are mission based, offer community and relatability, support a good cause, or are aligned with their values.
How are you different? Hopefully this post provided you with some perspective as you are tackling how to differentiate your business from competitors.
You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.