In the business world, three doesn’t make a crowd. It makes a marketplace.
Few business owners get to work in an industry of one. Unless you’re bringing a completely new idea to market, you’ll always have competitors selling similar products. Fortunately, competition doesn’t kill business. It drives quality, innovation, and branding.
Differentiation in business — however narrow — is the key to building brand loyalty. Think about the last time you and your friends argued about the best pizza in town. Some people love the restaurant with the perfect cheese blend. Others obsess over the old school parlor with the house-made herb tomato sauce. Maybe for you, it’s all about finding the most crisp crust or creative toppings. The “best” is relative, and it depends on what matters to each person.
As a business owner, it’s hard to be the best at everything because competitors are always looking for gaps to fill. Instead, figure out why people choose to do business with you. Then, get better and better at delivering those core selling points. Through brand storytelling, you can learn how to differentiate your business and be “the best” to your customers.
Own your business identity
Overthinking the backstory is a key reason business owners get hung up on branding. You may think you need an extraordinary origin story to make an impact. Guess what? Amazing stories get attention, but few people deeply relate to them on a personal level.
Customers relate to the blue-collar worker who will do anything for his family. They admire the entrepreneur with an inspiring rags-to-riches tale. They sympathize with the busy parent who can’t keep up with her to-do list. They respect the business owner who wants to create jobs.
Spend less time thinking of your business as mundane, and focus on the meaningful moments in ordinary lives. What purpose drives your business? Think about factors that motivated you to start a business and the solutions you want to provide. Do you care about environmental consciousness? Making a difference in your community? Creating luxury or handmade products? Offering affordability and convenience?
Sell your strengths to the right audience
Business differentiation requires taking a stance. You can’t be everything to everyone, but you can be the champion for a niche group of people. In other words, let your target market know how you go the extra mile in ways your competitors do not.
Domino’s went from being the bane of pizza lovers in the mid-2000s to the second largest pizza chain by 2016. Instead of claiming to be better than competitors, Domino’s did the opposite. The company apologized for “sucking” and positioned itself as the brand that listens and grows. While it’s a risky strategy, Domino’s saw its strength as owning up to past mistakes and following through on change.
Position your brand by pinpointing the best qualities you have to offer, no matter how simple they seem. The important thing is to make endearing promises you can keep. Consider things you’re already doing and services you could easily add at little cost. Answering these questions can help you identify crucial strengths.
- What matters most to your customers? Speed? Flexibility? Quality? Style?
- What is the most common positive feedback you get about your business?
- What are the most common obstacles people face while using your product? What are simple ways you can manage this obstacle?
- What steps do you take to make sure customers have a good experience with your product?
Let’s say you decide to enter the pizza market. It isn’t necessary to try and beat your competitors at everything. Instead, you could be the place with the fastest delivery. Or convenient web and mobile ordering. Or the zaniest topping combos. Or the best loyalty discounts. Stress the things you do really well, and people will pay less attention to your shortcomings.
Leverage your business journey
Just like customers travel a purchase path, business owners have a journey of entrepreneurship. Use it to your advantage. No two people are alike, and all business owners have unique skill sets that influence their brand. Celebrate the challenges, missteps, and insights that led you where you are today.
- Do you have years of expertise that make you an awesome consultant? Can you package those services with products to make life easier for customers?
- Do you have an unconventional background for your industry? Does it help you bring innovation to your business?
- Do you have a habit of stumbling upon great ideas after failed attempts? Do you have inspiring stories to tell that might amuse, charm, or motivate others?
- Do you have a funny or off-beat perspective on common pain points? Can you think of ways to surprise people with a comedic or unexpected anecdote?
You are already different from your competitors. You just have to look at yourself from an outside point of view to uncover interesting story elements.
Study competitor weaknesses
Don’t completely ignore your business weaknesses — competitors won’t. Other businesses capitalize on the cracks you overlook and draw away customers who aren’t satisfied. You should be using the same strategy to win more business and downplay shortcomings. Find out what your competitors aren’t doing well, and enhance your business in those areas. Consider these common ways to differentiate your business.
- Customer service: Make the user experience as successful as possible. Whether it’s resolving problems quickly or listening with compassion, great customer service is worth paying for. Try out simple services, such as hassle-free returns, ship to store, free shipping, and mobile orders.
- Price: Price isn’t the best competing factor because going too low can hurt your bottom line. However, if you can lower prices and still meet your profit goals, use it to build your customer base. You can always reduce the price on a few high-selling products and upsell with companion services.
- Value: Unlike price, value is a matter of perception. Try bundling services and products that are important to your customers, especially in B2B sectors. Many customers are willing to pay more for the convenience of an all-in-one solution.
- Social engagement: Being socially active has become an important trait for modern brands. People like to engage with their favorite brands online and contribute to the evolution. Find ways to place social engagement at the core of your outreach and retention strategies.
- Process/strategy: Emphasize the detail or distinction of your business process. If you have numbers or proven statistics to back up your strategy, use them in your brand story.
- Signature style: Style, aesthetic, and taste are integral to a great experience. Play up the unique style or craftsmanship of retail products and the creative or superior ingredients in food products.
- Activism: Is your business closely tied to a social cause? Let customers know what you stand for to attract people who admire your stance. Causes such as health, education, homelessness, and sustainability are common draws.
Big brands are a useful source of differentiation ideas, so look to them for inspiration. Tired of pizza comparisons yet? Well, here’s another one.
Off and on, Little Caesars Pizza struggled to compete with bigger chains in the late 90s and early 2000s. Now, it’s the third-largest U.S. chain and the highest rated for value. Why? Other chains and mom-and-pop pizzerias have higher prices and longer wait times. Little Caesars appeals to speed- and money-conscious families and youths with $5 Hot-N-Ready pizzas you can pick up right away. It’s a simple, effective way to win over a niche customer segment.
Expand your brand positioning as you grow
As you learn more about customers, you have more opportunity to differentiate your business. Consumer needs change, so it’s normal to revise your position in the market from time to time.
Not everyone will value your business, and that’s okay. Business differentiation is about tailoring your brand story to people who share your values. Some competitors have more experience, lower prices, or broader services. Yet, none of those businesses are exactly like yours.
In the long run, it’s much easier to master your strengths than overcome your weaknesses. There’s plenty of room in our economy for more business owners, so be confident in the unique value you offer.
Next step: Now that you understand what makes you different from competitors, it’s time to create a marketing plan and grow your business.