“If you don’t have a competitive advantage, don’t compete”

Jack Welch

Everyday we choose products or services based on our perception of their value, and we usually understand the differentiating benefits over the competitor products. Price is always a component in the value judgement but, depending on the type of business, our purchasing decisions are influenced by differentiating attributes like quality, design, comfort, taste, quantity, reputation, location, reliability, customer service, and so on.

Differentiating your business will help you stand out from your competitors, but that will only translate to success if you are appealing to the right customer profile.

A strong competitive advantage can get you out of the ‘lowest cost wins’ battles and move you towards a price premium for your offering. When customers appreciate the value benefits over your competitors, they become loyal to your brand and are more likely to advocate for it. Of course, low-cost might actually be your USP and that is fine if you are in the commodity business, as long as your profitability can sustain your business ambitions.

How will you stand out in the crowd?

Local business management consultantFor me as a business management consultant, there are no shortage of competitors offering help with growth initiatives, marketing ideas and business transformation programs. So, while it is important for me to explain to customers that they are gaining access to my extensive experience and expertise, I prefer to further differentiate my offering. I promise my customers to define objectives that will bring significant value to their business, and guarantee to achieve the results or there are no fees to be paid.

What about your business? Why would customers buy from you instead of your competitors and are you targeting those customers who appreciate how you are different?

To help you, here are 5 strategies that can focus your core strategy to make you stand out from the crowd:


Solve A Problem That’s Worth Solving

business problem solution business adviceWill customers want the product or service you are providing? Just because you think you have an innovative or irresistible offering, can you convince your target customers to purchase it? Are there enough customers eager to buy it at the volumes and price level that allow you to make sufficient profit to support a sustainable business?

These are basic questions for your business but, according to CB insights, more than 42% of polled startups failed because of a lack of market need for their product. Your solution must be compelling enough for enough customers to select it instead of choosing to do nothing or choosing an alternative option.


Segment The Market And Focus On Target Customer Groups

Don’t try to make your business all things to all people, find a niche where customers can appreciate and value the differentiation that you provide. Identify and target those customers with ‘pain points’ that match your offering, and of course the customers who have the available finances and an urgent need for a solution. Look for those customer groups where you can get the ‘quick wins’ and ‘low hanging fruit’. This is especially important when starting out in business as it will give your business sales and marketing momentum.


increase sales improve performanceAlways be mindful of the 80/20 rule; 20% of your customers bring in approximately 80% of the business, so you should focus on maximising the lifetime value of these 20%. By directing your sales and marketing efforts you can leverage your relationship with these vital customers so that you can build loyalty while capitalising on up-selling and repeat-selling opportunities.

Identifying and focusing on your target customers means that you sometimes will have to do something difficult; saying no to business.


Learn To Say No

Once you have found your differentiating value proposition you need to stay focused on it to grow your reputation and your customer base. Depending on your business type, you may need to rationalise your products and services portfolio periodically to ensure that you are aligned to your customer needs and your core capabilities.

marketing strategy business developmentIt’s easy to get distracted by what may look like a great opportunity to move into new markets or offer new services, but deviating from your core business could confuse your customers and dilute your brand value.

That’s not to say that you should never diversify, it is important to stay agile and alert to opportunities. Diversification may be a worthwhile strategic initiative to explore but it should to planned and executed carefully to avoid stretching your resources and diminishing from your existing strengths.


Research Your Competitors

Understanding your competitors’ strengths and weaknesses will help you to identify gaps and opportunities in the market that you can exploit to drive your business strategy. It will also enable you to develop the right marketing and sales strategies to highlight your differentiating value proposition.

digital marketing strategy improve salesTake the time to do your research thoroughly, especially if you are in startup phase and building assumptions for your business plans and projections. Be aware that the competitive landscape could be changing quickly. Now more than ever, disruptive competitors and innovative business models could pose threats in any industry.

Getting to know your competitors may also reveal opportunities to collaborate with them to build new capabilities and create collective advantages that will benefit both parties.


Create Great Customer Service

If you struggle to differentiate your business in the market, one area you can really make an impact is by providing outstanding customer service. Startups usually excel at this, but as companies getting bigger and more bloated they can become internally focused or too preoccupied with what their competitors are doing.

increase sales more customers

Improving the customer-experience should be at the core of your company’s activities;  a culture of ‘obsessive customer focus’ as Amazon’s Jeff Bezos describes it. Communicate with customers continually, find ways to amaze and delight them and they will come back for more. Positive reviews, referrals, and testimonials are marketing gold-dust and in themselves can be the differentiator for your business.


To stand out in a crowded marketplace you need to offer something different to your competitors and it must appeal to a specific customer profile. Focusing on your differentiating value proposition and showing your target customers how it solves their problem will help drive your business to success.


Do you have any more suggestions on differentiation and how to develop a competitive advantage?

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