Differentiating Your Small Business From The Competition

Sarah Levy is a small business blogger who works with Merchant Express

What differentiates your small business from the competition? And why do those differentiators matter to your customers? Being able to answer those questions and leveraging them as part of your marketing and sales strategy is an important key to being successful in business. Selling on price alone cannot do that.

Think of a differentiator as a value-added difference, or VAD, which can serve you well in a competitive space. Let’s say you run a dry cleaning establishment in a community that’s already well served in that niche. Chances are there’s already a price war going on, so what makes your business stand out from the others? What is your VAD?

Perhaps you also offer tailoring services, which may appeal not only to established customers but to potential customers who have clothes that need alterations. Or maybe you offer convenient pick-up and delivery services, or you open early in the morning and keep late evening hours to accommodate commuters. A really ambitious dry cleaner might even establish a satellite location at the local train station, saving commuters looking for convenience a special trip to the primary location. It goes without saying that you work hard to maintain an excellent reputation as a knowledgeable and reputable service provider.

Once you’ve identified your VADs, make sure your customers know about them and how they can impact them positively. Hand out business cards or magnets that trumpet your differentiators and talk them up in face-to-face conversations. And don’t forget the personal touch, like taking the time to examine each item of clothing for spots that need pre-treating, loose buttons that need to be reattached and other damage that can be easily repaired by your in-house tailor.

It’s not enough to know your own VADs — you need to know those of your competitors, too! Learn their strengths and weaknesses by checking out their online reviews on social

media and local discussion boards. If you’ve lost a customer to them, screw up your courage and ask them why they chose to take their business elsewhere. You may not want to hear criticism, but it can help your business in the long run.

When you interface with your customers, find out which VADs matter most to them. Conduct an informal survey or work your questions into a casual conversation. Their responses can help you redefine your differentiators and focus on the ones valued most by your customers.

Above all, maintain your integrity. Don’t talk down your competitors — talk up your business. If you can’t explain honestly and succinctly why you’re the better choice, you haven’t put enough effort into identifying your VADs.

Ask yourself this question: Why are you a loyal customer at your favorite retailers or service providers? What keeps you coming back year after year? You’ve obviously found more than one reason to become a repeat customer. So what differentiators in your small business are bringing in customers? Pinpoint them, roll them into all your marketing and sales messages, and make the case for why shoppers should spend with you instead of the other guy!

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