If you have a business or at least an idea, the chances are that there is already someone out there doing the same thing. This doesn’t mean that they are, or will be, your direct competitors. However, from a business perspective, it is always important that you can differentiate positively from your competitors, be it through quality, price or something else. Being able to give the customer reasons to choose your business over a competitor’s is essential for growth and survival. We will look at the reasons how you can differentiate and why it is important to do so.
Having this is what all businesses should strive to have over their competitors. This may come in various ways, depending on the line of business, e.g. an office landlord may have modern furnishings with the best booking systems compared to a rival who has not yet upgraded, or a clothing manufacturer may be able to attract customers because they use better materials than the competition. Being able to gain a competitive advantage not only means a better reputation for your brand, but it could also allow you to charge a premium (if that is part of your business strategy).
Beat them on pricing
The vast majority of customers are aware of product or service prices, and will actively shop around for the best deal. This is one of the most common ways to differentiate your business, but it can cut your margins very thin, or even incur a loss on some products or services. Usually, larger businesses who can take advantage of economies of scale would be able to offer the lowest prices, but now online sellers are too, able to offer low prices for the same products, thanks to their low overheads and purchasing direct from the manufacturer.
Specialise in something
If you focus on providing the absolute best of one product or service, this could do well to differentiate you. Are you able to go above and beyond for the customer and offer guarantees that your competition are unwilling to? Do you have a product that works much better than others and that you are willing to offer extended warranty for? By getting the customer to focus on these aspects, you are sure to win over more customers.
Differentiate your product
This can just come down to clever marketing – often we see two brands with similar products, however one brand is able to make the customer feel that theirs is superior. This could simply be through superior packaging or better advertising; either way, being able to make your product or service seem not only different, but better than a competitor, is something that all businesses need to do in order to become successful.
These are various ways in which you differentiate yourselves from competitors and reasons why it is important to do so. Remember, it is always beneficial to plan ahead and research your competition before starting, so you can really hit the ground running.