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How to Identify Your Business’ Differentiation and Why It Matters

By June 28, 2017 No Comments
How to Identify Your Business' Differentiation and Why It Matters
How to Identify Your Business' Differentiation and Why It Matters

Business owners have one goal in common with their competitors: they want to be the best in their niche. Being the best means dominating a marketplace, and typically leads to building a profitable business. Many business owners fail to realize that gaining the top spot requires a strategy to attract the right customers and stand out in the crowd. The key to building a successful strategy is business differentiation.

Business differentiation is often associated with the term unique selling proposition (USP) and is defined by what makes you different from your competitors. Many businesses think that as long as they have the lowest price, they are different. According to a recent study by Walker Information, price will no longer be relevant by 2020. It is more important than ever to stop focusing on price and start focusing on your USP.

Here are five steps to identify your business’s differentiation:

1. Figure Out Who You Want to Serve
If you could fill your office with the exact individual or business you want as a customer, what would they look like? Do they make a certain amount of money? Have a certain number of employees? Are they located in one area? Or do they represent one industry? Answering these questions helps you define your ideal client. If you have been in business for awhile, you probably already work with some who are loyal customers.

2. Do Market Research
Once you know who your ideal client is, you can start a conversation with these individuals. Ask those you already have a relationship with to answer the following questions:

+ What do you like about working with us?
+ What do you dislike about companies in our industry?
+ What made you buy from us initally?
+ Do we do anything different than other vendors you work with?
+ What other businesses do you enjoy working with?
+ What would you search for online if you were looking for a similar company today?

3. Research Your Competition
Once you know who your ideal client is, you can start a conversation with these individuals. Ask those you already have a relationship with to answer the following questions:

4. Create a SWOT Analysis
A SWOT analysis reviews strengths, weaknesses, opportunities and threats for your business. Completing one helps you quickly identify what you are doing well and where there is room for improvement compared to your competitors.

5. Pick a Key Differentiator
Review your SWOT analysis to pinpoint what sets you apart. Are there common themes in your market research answers and SWOT analysis? In some instances, this will be readily apparent, but in others, it might require more work. If there is no key differentiator, look at your core values and pick one that means the most to you, such as delivering a positive experience or a superior product.

6. Go With It
Once you know what you want to be known for―USP―it is time to brainstorm ways to deliver it. Incorporate your new, unique selling proposition into all of your marketing, messaging and daily activities. Educate your team on its importance, and make it the center of your business culture. With time, it will be the first thing your customers think of when they hear your business name.