Business differentiation is a marketing strategy used by many successful entrepreneurs. Some business experts believe it is one of the most important and effective marketing tools available to small business owners and entrepreneurs today because of its flexibility, ease of use and general low implementation cost. Also called positioning, business differentiation is what sets a business apart from the others in its field, geographical area, market or demographic. Essentially, it is (hopefully) what a client or customer would say when asked, "What's so special about business XYZ?"
Why Business Differentiation Is Important
Without business differentiation, all businesses selling the same product or service would be challenged to compete against one another, as the market's perception of the business can make or break an entrepreneur. The goal is to discover a niche in the marketplace that:
- is large enough to make money;
- small enough to position the business in a different light than the others in the market or area;
- is well suited to the needs, skills, interests and strengths of the business, and;
- fills a need in the marketplace.
Ways To Create Business Differentiation
Of the business differentiation list that follows, not all will fit any given entrepreneurial venture- and that's a good thing. Every business cannot compete on the same level, in the same way, and therefore why there are so many business differentiation methods and tactics to choose from. A marketing plan will be very helpful in this business differentiation decision making process, as it provides all of the business strategy needed.
This list is not comprehensive, but it is a good starting point. Do note that it is impossible for any one business to use all of the business differentiation tactics listed below, as it will muddy the message. This is a situation where less is most definitely more.
- Quality
- Service
- Price
- Perceived Value
- Durability
- Convenience
- Warranty
- Financing
- Range of Products/Services Offered
- Accessibility
- Production Method(s)
- Reliability
- Familiarity
- Credentialing
One Last Note On Business Differentiation
As an entrepreneur works through the how to start a business process, more business differentiation ideas will come to light, as well as different ways of implementing them. Just be sure that once a decision is made regarding business differentiation, that it isn't changed once its been put in place, as it can be extremely difficult to reposition a business, if downright impossible.
The image a business portrays in the marketplace - especially with smaller businesses or entrepreneurs- is how customers come to relate and refer to the business. Remove that, and clients can become confused, frustrated, and will likely go looking for another company to frequent that they feel is more stable and reliable.
Bonny Albo - Bonny offers 20 years of writing experience to her readers. CNN, MSNBC, The LA Times and Macleans all reference her for expert advice.
