Cloud-based services and global markets make launching a business fast and easy for almost everyone. For this reason, new businesses can have a good start but also face many competitors.
Many business owners slash prices in response to competition. However, competitors may follow suit, causing a price war that obliterates profits.
To avoid the pitfalls of price-based competition, business owners must find alternative ways to compete. Among the several possibilities, a differentiation strategy often makes the most sense.
By emphasizing the differences between one brand and another, businesses can make their brand stand out, giving some customers a good reason to choose them. businesses can get started by asking themselves the following questions.
What’s unique about my offer?
Business owners should avoid making the same pitches and offering the same incentives as everyone else. After all, anyone can offer free shipping and everyone can say that they have the best products.
Everything from business models to logistics can make a brand unique. Business owners may also choose to use factors such as a social cause or geographic location to create a distinction.
Does anyone care?
The unique selling point chosen for a brand should be something people care about. In other words, uniqueness doesn’t guarantee success.
So, businesses should engage in market research to test possible differentiation strategies. Generally speaking, a quality that is satisfactorily unique is one that, solves problems that customers understand and want to solve.
How do I sell my offer?
When a business has a unique offer that can command the interest of relevant buyers success still is anything but guaranteed. After all, buyers may doubt the details of an offer or question claims about a product’s performance.
Business owners and marketers have the job of discovering why people hesitate. After finding out, they can offer incentives to overcome each barrier. In many cases, a free trial or money-back guarantee can nudge people into a sale. Similarly, a lifetime warranty or free return shipping will give shoppers the confidence they need to buy.
In summary, by differentiating their brand, firms can create a niche in the marketplace where they can stand out. Ultimately, a unique, compelling offer will make price reductions unnecessary while building a noticeable brand that appeals to a distinct set of customers.