Customers can solve their problems by buying your products or services or those of your competitors. If you do not have direct competitors, there will be generic competition. The Bugatti La Voiture Noire, which costs £14.4 million, faces competition from other high priced cars as well as other forms of ostentatious spending, including private jets.
It is important to differentiate your business. Most enterprises do not spend sufficient time thinking through this key issue.
Consider it from the customer’s perspective: why is your business, brand, product or service different from other providers?
As a human being, you are unique. You are one of a kind amongst billions of human beings. Think of your enterprise in this way. What is special about it? What makes it different from your competitors? The business guru and author, Michael Porter, says that there are only two fundamental business strategies: Low Cost and Differentiation.
For example, there are many retailers who promote low prices. This’s fine, as long as they can sustain low costs. However, many new retailers focus on low low prices and go out of business fast fast fast.
The other fundamental strategy is differentiation. Another way of saying this is: ‘Standing out from the crowd’.
List the various ways in which your product is different from everyone else. Write it down like this: ‘At ABC Co we are different because we offer fantastic service.’
Now think of a competitor and put their name into the phrase. Do you think that customers are as likely to believe them as they are to believe you? If that is the case, discard this point and try again.