Before we get into the ways you can differentiate your business from your competition, as the title suggests, I want to make it clear that price is not the only factor that comes into play.

Yes, being cheaper is a great way to convince customers to buy from your business, but being cheaper also comes with a long list of negatives such as low profit margins, and the need to make a much higher volume of sales to make your business profitable.

In some cases it is also not practical or possible to be cheaper than your competitors, particularly when your competitors are very large, very efficient, and have a lot of buying power. Imagine being a small hardware store and trying to compete on price with Bunnings.

You’re in business to make money, so let’s look at ways you can differentiate yourself from your competitors and become the first choice for clients.

The Power of Differentiation

Imagine you are looking for a childcare centre to send your child to. You’ve jumped online and found a list of centres that are all offering childcare services at similar prices. One centre however stands out from the large list of childcare centres in your local area.

The centre that stands out has a great looking website, a long list of great reviews on Google and very inviting branding making them look more professional and credible. They also offer fun karate lessons for their children and the educators run weekly french lessons. To ensure the children are receiving the best care possible they guarantee that every room in their centre has a qualified teacher looking after the children at a minimum level of bachelor’s degree. To make things more convenient for parents they also offer slightly longer operating hours so parents who get home from work later, or who have to travel a long distance from work can make it to pick their children up without rushing or leaving work early.

By offering services that are convenient and fun, and by promoting a sense of quality and professionalism, this childcare centre has helped themselves stand out from the pack and become a much better choice for parents within their local area.

This is the power of differentiation. Customers will pay more for a service if they feel the service offers more value than those of competitors.

How You Can Differentiate Your Business

There are many ways that businesses can differentiate themselves from their competition and these will change from business to business. Instead of looking at specific ways you can differentiate your business from your competitors, let’s look at two of the most common and most accessible types of differentiation to get your mind working and to help generate some ideas of your own.

Service Differentiation

Many businesses stand out from the pack in their industry through providing a more convenient, or more involved service. Effectively anything you can provide to your customers that makes using your business easier falls into this category.

Example:

A dry cleaner may offer a pickup or delivery service allowing clients to have their dirty laundry picked up from their workplace and then have it delivered back to them the next day. This takes the hassle out of driving to the dry cleaner to drop off and pick up their clothes, making the whole experience very efficient and very easy.

Even if the dry cleaner charges a small fee for this service, many customers will be willing to pay for the convenience. Offering this service allows the dry cleaner to make a bit more money off each order, makes life easier for the customer, and ultimately gives the dry cleaner a leg up over its competitors who make customers drop off their own clothes.

Reputation & Relationship Differentiation

For a customer to buy from a business they must first trust the business. Building trust is a great way to get an edge over your competitors, but is often hard to build when a customer has only recently been introduced to your business.

This form of differentiation is very important as consumers will not buy from a business that they feel uneasy about, or that has a bad reputation unless it’s prices are significantly lower than those of competitors.

Example:

Pretend you’re looking online to buy a new pair of shoes. You find the exact pair of shoes you are after and there are two online stores with your size in stock. Both stores are offering the shoes at the exact same price and both stores can deliver the shoes to your door within 3 days.

Now pretend one store has a long list of 5 star reviews on Google, readily available contact details, a great website design, and a great logo. The other store, however has no reviews online, a very outdated website, a scrappy logo, and has hidden their contact details, only offering a hotmail email address.

What store are you going to buy your shoes from? It seems obvious, but hundreds of businesses operate this way. They have old, barely functional websites that are not maintained, they offer limited ways to contact their business, and they don’t push reviews online. What’s more alarming is that these business owners sit down each day and wonder why they don’t have sales and enquiries coming through the door.

To land sales you must build trust. To build trust with customers who don’t know your business you must look the part online and prove to customers that they can trust you.

Differentiation Exercise – Try It On Your Own Business

Looking to help your business stand out from the pack? Let’s get started with your website to aid your reputation & relationship differentiation.

This exercise will help you cover the basic necessities that should be present on your website. By making sure your website includes the following items, you’re already helping differentiate your business from many of your direct competitors.

  1. Does your website include readily available contact details?

    At a minimum you should have your phone number and your email address in the footer of your website and available on the contact page of your website. If your business has a physical location also include your address and optionally a map.

  2. Do you have testimonials or a portfolio of your work listed on your website?

    Testimonials are a great way to show off good experiences your clients have had and a portfolio of your work (if appropriate) is a great way to prove the quality of your work.

    Testimonials should always include as much detail as possible about the customer such as first name, last name, business name, or suburb to show that the testimonial is from a real customer.

  3. Do you have a Google Business Listing?

    Google Business Listings are crucial. If you don’t have one you are missing out on enquiries it’s as simple as that.

    A Google business listing is the panel that shows up within the search results when your business name is typed on Google. The listing allows you to show of photos of your business, your opening hours, your address and more, but more importantly it allows customers to leave reviews.

    You should always be encouraging customers to leave honest reviews about your business on Google whenever possible. A large portion of customers will check Google reviews before using or purchasing from a business to see if they can trust you.

  4. Is your website design up to scratch?

    Be honest here because a bad website design will kill your sales online. If you’re unsure, take a quick look at the websites in our web design portfolio and compare them with your own website design.

    If you feel your website looks outdated or that it needs work, it might be time to have a chat about getting your website re-designed by a professional so that it stops scaring customers off and starts generating an income for your business.

    If you feel your website does need a redesign why not get in touch with the team here at The Honest Agency?

Recommended Posts