3 Strategies that Differentiate your Business from the Competition
- April 6, 2018
- Posted by: Nkem Mpamah
- Category: Leadership Development
How you differentiate your business in a crowded market will make a huge impact on your success or failure. Differentiation is the foundation of every business strategy and the determinant of business success.
Your business is successful only when you are delivering better value (not quality) than your competitor. So, being aware of what your competition is doing, and how they are doing them is useful for your own differentiation strategy. As in the military, you cannot successfully implement a business strategy independent of your enemy (your competition). Understanding what your competitor does, and why people buy from them will give you a clear understanding of how you can differentiate your business.
How do you differentiate your business?
What are you doing right now, or could do tomorrow to disrupt your industry? How can you position yourself against your competitor and attract more clients? Your ability to differentiate your business gives you a competitive advantage, which is everything you need to build an enduring business. Let me explain.
Customers make buying decisions every day on the basis of differentiation, and whether they know it does not change the fact. Before anybody buys your product or service, he or she wants to know what makes you unique from everyone else. This is usually a subtle 1 to 2 minutes thought-process that runs through customer’s minds. They either want to get the highest value at the lowest price, highest value at a reasonable price but delivered at the speed of light, or all of the above plus a superb customer service. And with the Internet, they do not need to go too far to find this information.
How to differentiate your business from your competitors and gain competitive advantage
Differentiation is not for the “big boys” only; small businesses’ too, differentiate their business. If you sell products or services, odds are you are familiar with the intense noise in the marketplace. Everybody is making noise about what he or she does. Social media platforms are typical examples, yet it happens daily on the radio, TV, and business networking circles. It frustrates me sometimes, to see or hear how people describe their products and services. You see or hear things like, “I am a consultant,” or I’m CEO of XYZ company.” From my experience of coaching top producers, neither of those statements is a winner because they are only about the individual.
When you differentiate, be crystal clear about what you do or say to cut through the noise, so you’d be heard. Below are the three fundamental strategies to differentiate your business.
1. Define your competitive advantage
In business, differentiation is the highest competitive advantage you can build on. So, your competitive advantage can be anything that you do or say that makes people see you as different from others. You do not need to somersault from a 10-story building to be seen as such, though. In fact, it could be anything as little as being honest; your everyday behaviour, attitude, or way of doing business that sets you apart. For a business like Apple, it is the simplicity of the use of their devices that differentiates it in the market.
In consideration of what sets you and your business apart, think of something you can do or create that could potentially give more value, more respect, and more meaning to your customer. In my executive coaching and strategic advisory business, I help top producers – senior corporate executives and experienced entrepreneurs to gain clarity, confidence, and capability. Each of the 3Cs is crucial for helping them to execute their actions with discipline and achieve the biggest goals. That’s the type of competitiveness I bring into the marketplace. Now, how can you describe your competitive advantage in terms of your product or service?
2. Be clear about your area of excellence
Your area of excellence or superiority is something that you do or your product or service offers better than your competition. Take my business for example. Many coaches in the executive coaching niche offer strategy, performance improvement, leadership development, or business growth improvement to their clients. After several years of working hard and refining my service, I started receiving feedback from my clients. The feedbacks show “Peace of Mind” as a key value my business adds in addition to the clients’ main goals. So, you can see how I discovered my area of excellence and superiority?
Achieving business excellence takes a consistent effort because you do not achieve it once and own it forever. To create business excellence, three things are required. First, you must focus on what it is that you do, that makes a difference. Then, you discipline yourself to commit your time, effort, and resources towards achieving it. Finally, you take a consistent action to ensure that you are on top of your game.
3. Define your Unique Selling Proposition (USP)
Unique Selling Proposition (USP) is something you, your product or service is offering that no one else could. The Cambridge English dictionary defines Unique is something that’s “being the only existing one of its type.” In other words, Unique Selling Proposition is something you cannot modify to make it more or less unique.
Understanding what makes a business unique can literally transform the business from struggling to the next big thing in town. It drives motivation and becomes the single most important marketing message or story anyone in the organization can tell. To give you an idea, your USP is the strongest promise that your product or service makes to your customer. Think of it in terms of the solution you offer to alleviate your customers’ pains or needs. You can also infer it from your competitive advantage (in strategy 1) above if the competitive advantage is derived from your product or service. In my business, my Unique Selling Proposition is the 3Cs that my service offers my customers – Clarity, Confidence, and Capability. They speak to the specific needs of my clients and give them peace of mind USPs upon completion of our work together.
The bottom line is, whether you are managing a multi-million dollar business or a sole trading outfit, identifying the key factors that differentiate your business from the competition will increase your chances of success. Take some time off now and brainstorm the three strategies above to discover what sets you and your business apart.