Terri Zwierzynski

Differentiation –
Smart Marketing Strategies
for the Solo Entrepreneur

Using Your Size as a Competitive Advantage
Dif-fer-en-ti-ate v. tr. To perceive or show the difference in or between; discriminate.

In business terms, to differentiate means to create a benefit that customers will perceive as being of greater value to them than what they can get elsewhere. It's not enough just to be different—a potential customer must notice the difference and feel that the difference fits their need better.

As you build your business, use differentiation to attract more customers. Once you have momentum, differentiation allows you to charge a higher price because you are delivering more value to your customers.

Price Differentiation
Differentiating on price is probably the most easily understood method. HOWEVER, for solo entrepreneurs, caution is in order. On the one hand, potential customers might expect a lower price from you than from your larger competition. On the other hand, cheaper prices can evoke perceptions of lower quality or a less stable business. I don’t recommend competing solely on price; when you do use price as a differentiator, do it by competing on something other than straight dollars. For example, you might offer:

• More value: Offer more products or services for the same price.
• Freebies: Give away accessories, companion products, free upgrades, or coupons for future purchases.
• Free shipping, etc.: Convenience sells, especially when it is free!
• Discounts: Offer regular sales, coupons, etc.

Focus Differentiation
For solo entrepreneurs, this is the most important method of differentiation: you simply can't be everything to everybody, so you must pick a specific focus for your business. Then you have an automatic advantage over larger companies because you can build close relationships with key customers that will be hard to duplicate. For example, you might differentiate yourself through:

• Location: Take advantage of your closeness to prospective customers.
• Customer specialization: Be very specific about what characteristics your customers will have; for example, racing bicycle enthusiasts or companies with a spiritual conscience.
• Customer relationships: Know your customers really well, form partnerships with them, and get them to speak for you!
• One-stop shopping: Offer everything your target market needs, in your area of expertise.
• Wide selection (within your niche): Although this one may seem to be the opposite of focus, the key is to be very specific in one dimension and very broad in another.

Product/Service Offering Differentiation
How much you are able to differentiate your product or service offering will vary based on what type of business you are in. If you are in a highly regulated business, your options may be limited. Explore a totally new market or type of product or service, however, and the possibilities abound. The key is success: knowing your customers well—talk to them often, and you will know what they need most and be able to offer it long before your competitors know what is happening. Examples of ways your product or service could stand out:

• Quality: Create a product or service that is exceptional in one or more ways (For example, your product or service lasts longer).
• Better features
• Easier to use
• Safer
• New/First: Be the first one to offer something in your location/field.
• Features/Options: Offer lots of choices, unusual combinations, or solve a problem for a customer in a way no one else does.
• Customization: As a solo entrepreneur, you may be able to more easily handle special orders.

Customer Service Differentiation
Have you noticed how customer service seems to be out of vogue these days? This situation makes excellent customer service a great opportunity for differentiation and another natural advantage for solo entrepreneurs that already know what’s important to their customers. Build your reputation on making customers feel really good about doing business with you. Examples:

• Deliver Fast: Next-day, or one-hour—make it faster than customers think possible.
• Unique channel: Offer a service over the phone or the Internet instead of in person, or in their office rather than yours.
• Service: Delight customers! It may seem expensive to offer exceptional service, but it pays off in word-of-mouth advertising.
• Before/during/after-sales support: Provide technical or other support to customers using your product. You might use joint ventures to provide that support—but customers will perceive it as being from you!
• Guarantee/warranty: Offer 100% money back, or free replacement parts.
• YOU: Offer yourself and your unique blend of talents and skills to attract customers. Make sure they are able to get access to you, too!

Keys to Successful Differentiation:

• Know your customers very well.
• Pick a blend of differentiation methods that, in the eyes of your customers, truly sets you apart.
• Talk about your differentiation in terms of customer benefits.
• Tell everyone—often— about what differentiates you.
• Keep your differentiation fresh by listening for changing customer needs.