Business Differentiation Is Not A Simple Planning Exercise

Cut out the BS? What do we mean by BS? The typical responses provided when a new business owner is asked this: Who is your competition? And, usually, there are two responses:

No one, I am unique.
Everyone.
BS.

Here’s why: If they have come up with a new way to solve a problem for their customer, then how the heck was the customer solving it before? Hence, competition.

In the second reply, say we are talking to a new pizzeria owner. His competition is not just other pizzerias…just the ones in his or her geographic area. That narrows it down a quite a bit.

This illustrates the critical need to understand:

How your business is different?

How can you communicate that difference to your target audience?

Do enough customers care about the difference between you and your competitor enough to change their behavior?

In my thirty-plus years of counseling new small businesses, probably close to 1,500 startups of all niches, including restaurants, tee-shirt companies, fitness centers, yoga studios, apparel companies, internet marketing companies, and a variety of service companies, I’ve witnessed first-hand how their issues are far different than those of established companies.

Here’s a great example. I was buying a World Series tee-shirt for my brother. I ordered one from Major League Baseball and as told it would be delivered in three days, in time for him to wear during the series. TEN days later — after the World Series was over – it arrived, but to the wrong address and was subsequently returned. MLB’s response? They were too busy.

However, the local Modell’s, had Mets World Series shirts in stock the day after they won the playoffs. In addition, they got free advertising from nearly TV station about the frenzy for the shirts.

This is a great example of how one company differentiated itself from its competition. Modell’s anticipated what their customers would be looking for, and was ready. When I am looking for another sports shirt, who will I look to first?

While it’s not a hard concept to grasp, it is something that can easily be overlooked. Here are some ways to stay on top, and set yourself apart from your competition. And, believe me, every small business has competition of some kind.

Research Google and Amazon regularly to better understand competition and seek opportunities.

Truly understand what it is you are selling, and the extent of what your product or service offers.

Understand why you price your product the way you do in terms of competition, value, and total package, rather than just pricing high or low.

Quality in terms of a subjective general evaluation of things like materials, construction and durability.

Keep up with your inventory, in terms of style, size, color, price distribution and availability.

Create a plan for customer service, including the terms at time of purchase, every possible transaction, product/service warrantees and guarantees, and what the customer can expect after purchase.

Make sure your company is on stable grounds for its future.

All employees should be expert in product and customer service knowledge.

Stay current on your company’s reputation, brand image, and what people are saying about you.

Be involved in the advertising plans and make sure to find out how effective the advertising campaign was. Make sure you are reaching your target customer.

In summary, business differentiation is not a simple planning exercise that gets ignored once you have your ribbon-cutting. Rather it needs to be the backbone of your success in terms of understanding, developing and executing solutions. While a total package is critical, do what you can, when you can, but don’t take your eyes off the ball.