Differentiation ? Smart Marketing Strategies for the Solo Entrepreneur

Are you ever frustrated or hesitant when you talk to prospective customers because you can't readily explain why they should come to you rather than go to your competitors? Sure, you might have your 30-second elevator speech, but then they ask you that dreaded question, "So what makes you different?" Then, all those self-doubts creep in, and you just aren't sure what to say. Differentiation can boost confidence--yours in yourself and that prospective customer's confidence in you!

-- 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 perceive as being of greater value to them than what they can get elsewhere. It's not enough for you to be different--a potential customer has to take note of the difference and must feel that the difference somehow fits their need better. (Other words that mean virtually the same thing: Competitive Advantage; Unique Selling Proposition; or Value Proposition.)

As you are building your business, you can 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. Make a point to evaluate and adjust your differentiation methods at least annually.

The various methods of differentiating your businesses fall into four general categories:

Price Differentiation

Focus Differentiation

Product/Service Differentiation

Customer Service Differentiation

Price Differentiation

Differentiating on price is probably the most common and 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 because they perceive you as having less overhead, etc. On the other hand, cheaper prices can evoke perceptions of lower quality, a less-stable business, etc. And if you compete on price against competitors with deeper pockets, you can price yourself right into bankruptcy. Be creative with this differentiator by competing on something other than straight price. For example, you might offer:

- More value--offer more products or services for the same price.

- Freebies --accessories, companion products, free upgrades, and coupons for future purchases.

- Free shipping, etc.--convenience sells, especially when it is free!

- Discounts--includes offering regular sales, coupons, etc. (see cautions above)

Focus Differentiation

For Solo Entrepreneurs, this is the most important method of differentiation, and in many ways, the easiest. Why? Because as a Solo Entrepreneur, you simply can't be everything to everybody, so you must pick a specific way to focus your business. Once you have done that, you have an automatic advantage over larger companies because you can become more of an expert in that one field --and you can build close relationships with key customers that will be hard to duplicate. For example, you might differentiate yourself through:

- Location--take advantage 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 customers really well, form partnerships with them, and get them to speak for you!

- Affinity relationships--associate your product/service with a well-known person or organization.

- 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. For instance, 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 to successful differentiation in this category, again, is to know your customers, really, really 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. For example, your product or service could stand out in one of these ways:

- Quality--create a product or service that is exceptional in one or more ways. Examples: Lasts longer

- Better

- 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 than big, mass-market competitors.

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. Works great with referral marketing, too. Examples:

- Deliver fast--next day, or one-hour--make it faster than customers think possible.

- Unique channel--offer a service over the phone or 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, your unique blend of talents and skills, to attract customers. Make sure they get access to you, too!

Keys to Successful Differentiation:

- Know your customers, really, really 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 about what differentiates you--often.

- Keep your differentiation fresh by listening for changing customer needs.

Copyright 2002-2003, Terri Zwierzynski, Accel Innovation, Inc.

_________

Terri Zwierzynski is a coach to small business owners and Solo Entrepreneurs. She is also the CEI (Conductor of Extraordinary Ideas) at Solo-E.com and the author of 136 Ways To Market Your Small Business. Terri is an MBA honors graduate from UNC-Chapel Hill. Terri has been coaching for over 10 years in a variety of settings, including 6 years as a senior-level coach and consultant for a Fortune 500 company. She opened her private coaching practice in 2001. You can reach Terri at http://www.TerriZ.com.

_________

***** Find more articles like this at http://www.Solo-E.com ? Keeping Solo Entrepreneurs Juiced in Business and in Life. Our team of Solo Entrepreneurs are comprised of small business experts who support others in finding business success with the flexibility and freedom to have a life, too. Network with other freelancers, self-employed and Solo Entrepreneurs in our forums, enjoy our articles and newsletter, and find other online training opportunities. *****

---

Message to Prospective Franchisees for Franchisors

Many franchise companies fail to send the proper message to... Read More

How Good Is Your Big Idea

Q: I want to start my own business. I have... Read More

Competing With The Big Dogs

You run a small consultancy. You're well qualified, experienced and... Read More

Have You Been Thinking About Owning Your Own Business? Or Becoming An Entrepreneur? Part 1

Almost every day, I talk with people who want to... Read More

Top 10 Mistakes Entrepreneurs Make Before They Even Start

So you want to start a business. You have an... Read More

Why Every Student Should Start a Business

With the economic downturn, students in all the major business... Read More

Health Insurance for Solo Entrepreneurs

One of the most important benefits employed people enjoy is... Read More

Prescription for the Future and Technological Revolutions

The world sure has changed in the last two-decades hasn't... Read More

Abstract Business Marketing Strategy for the Entrepreneur

If you look at those Corporations in franchising today you... Read More

Confidence = Preparation + Courage

It always amazes me when I see someone on television... Read More

Book Yourself Solid: The Simple Selling Process

As a service provider you may not want to think... Read More

Your Company Needs A Mission Statement; Make It Count

Does anyone remember that book "Built to Last" done y... Read More

Venture Capital Negotiating Issues

When companies enter into negotiations with venture capital firms, there... Read More

Do You Have What it Takes to be a Successful Entrepreneur?

Print off this page, take the quiz and find out... Read More

Expand Your Resourcefullness!

The success and failure for the entrepreneur is largely dictated... Read More

10 Ways Entrepreneurs Shoot Themselves In The Foot

Entrepreneurs and their businesses have a tendency to ambush themselves... Read More

Angel Investors: 7 Online Business Plan Scams and 1 Real Deal

We've all seen the hype: "We'll put your plan in... Read More

An Entrepreneurs Biggest Cost

When launching a new product or company, an entrepreneur must... Read More

A Dorm Room With A View

As a senior in high school, he paid cash for... Read More

The Danger Of Hate

As you have shown an interest in starting a business... Read More

Staying Ahead of the Perils, Excerpt of Entrepreneurial Motivation Speech

Running a business is not an easy endeavor, it takes... Read More

Determine Your Niche & Be Successful

What's a niche?Dictionary.com provides a great, twofold definition:"A situation or... Read More

How to Start a Franchise

Franchising InformationFranchise oppotunities are all around us today. You may... Read More

The Lonely Hat: A Marketing Parable

Jones was a typical entrepreneur who worked long hours and... Read More

Creativity & Entrepreneurship: The Creative Evolution of an Intellectual Property©

In each of us, there is a creative spark -... Read More

Rx for Falling Corporate Profits

Once again the squeeze is on as renewed inflation worries... Read More

Motivation and Commitment

Why do people start small businesses? The most frequently cited... Read More

Ten Traits of Successful Entrepreneurs

Successful entrepreneurs have many traits in common. Here are ten... Read More

Creativity & Entrepreneurship: The Secret to Discovering Your Purpose in Life!©

Hello Creative Entrepreneurs!In the second course on Creativity & Entrepreneurship... Read More

Lets Not Forget About The Little Guy

Every business has to start somewhere. What truly makes this... Read More

Great Tips Of Choosing An Office

You have decided to strike it out on your own... Read More

Isnt it Time You Started to Fly?

I am going to begin this article by sharing a... Read More

An Entrepreneur and a Life To Be Remembered

I was reminded of my own mortality today. I guess... Read More