5 Ways You Can Differentiate Your Business in a Crowded Niche
It used to be that one town had one hardware store, one grocery store, and one insurance salesman. Today, even the smallest towns have multiple businesses in a given niche – in addition to the options that are available online. As a business owner, this makes the concept of differentiation all the more significant.
5 Ways to Set Your Business Apart
Many entrepreneurs are under the impression that the only way to differentiate is to sell a unique product, but this isn’t true. While you certainly have an advantage if you sell a proprietary good, you don’t need a totally unique product to be competitive. There are plenty of other things you can do to successfully set your business apart, including:
- Lower Prices
One of the classic points of differentiation is pricing. When you’re the low cost leader, you’re able to appeal to a wide portion of the marketplace that’s looking to save money and find the best deal.
Unfortunately, it’s challenging for a lot of businesses to be a low price leader in a world of Amazons and Walmarts. Be wary of trying to undercut larger brands with bigger margins and additional room for error. You might end up thinning your margins and still losing the battle.
- Add On Services
If lowering your price point is impractical or insufficient, you might try integrating add-on services into your core product offering. If you operate a car wash, this might look like including free vacuums as part of the price. If you sell marketing software, it could look like offering additional cloud storage as part of the subscription.
Add-on services are effective because they’re extremely tangible. When customers are comparing two similar products, they’re naturally drawn to the one that offers an extra.
- Use Distinct Branding and Design
You might not even have to add something onto your core product. Differentiation might be as simple as using distinct branding and design elements to create an enticing customer experience.
An example of this would be a bakery that invests in unique packaging when the competition all uses the same boring boxes and containers. While the cupcakes or bagels inside the containers might be virtually identical, the packaging makes the product seem more enticing.
- Make the Product More Convenient
If you’ve studied business trends over the decades, you’ve noticed that convenience is an important factor in the shopping process. The more convenient a product is, the more likely that a customer will choose your offering over the competition.
Convenience looks different based on the industry you operate in and what sort of products you’re selling, but Stamps.com is a great example. They recognize that buying postage is a pain and give customers the ability to click and print from anywhere.
- Offer Superior Customer Service
When most people hear the name Zappos, they think shoes. But if you’ve ever done business with the company, then you probably think “world class customer service.” While the product is good, Zappos has built its name on a foundation of high quality customer service. It’s a point of differentiation for them.
If you can’t do anything else to set your business apart, you can at least offer exceptional customer service. It might take some time, but customers will talk and word will spread that you put shoppers first.
Blending in is a Death Sentence
There are plenty of times in life where blending in is a good thing, but not in the business world. If you camouflage yourself too much, you’ll end up losing customers to the competition. Focus on setting your business apart and you’ll enjoy much better results.