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Project Manager
URL Idiots, Inc.
Affordable Palm Springs Web Design, SEO and Marketing

Office: 760-278-1875
http://wwwURLidiots.com
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For small and medium sized businesses it is often difficult to gain a footing in the marketplace.  In this economy competition is fierce and it often seems like there is not much you can do to maintain your current business levels, let alone grow.  This article will lay out some basic principles for differentiating yourself from your competition.  There’s a funny thing that happens when you become “different.”  Your competition fades away, at least momentarily.  There are a few challenges that come with differentiation because once your difference is established it must be maintained.  We will discuss ways in which you can differentiate yourself from your competition, grow, increase profit and maintain your position at the top in your market.

The Blanket Approach Rarely Works

First and foremost you can not be all things to all people.  You can not simply pick a product or service and try to market it to everybody.  I call this the blanket approach and it is not that easy.  Walmart is a great example of the blanket approach in action.  You can do everything at Walmart, grocery shopping, taxes, oil change the list goes on and on.  The problem is that what made Walmart successful is their low pricing.  Since neither you nor I want to cut our prices to our lowest prices we can not take this approach.  Additionally if you begin cutting prices as a way to differentiate yourself your competitors will quickly follow suit.

The only way to beat your larger competitors is to figure out what it is that makes your product or service different.  There is sure to be something that your larger competitors do poorly or not at all.  If there is an improvement to be made and you can do it then, my friend, you have just found your “difference.”  When you become unique you have the potential to create your own category and demand your own prices.  It is imperative that you establish your difference in the marketplace.

Consider the following:

• What does your competitor do wrong?
• What does your competitor not offer?
• Is there anything missing in the current market?  Can you provide it?

These are all things that must be considered when deciding what products or services you will offer.  Once you find something good make a decision.  In the words of Yoda “Do or do not, there is no try.”

Establishing Yourself in the Marketplace

In order to establish yourself you will need to take the “difference” you have decided on and market it.  Your website, brochures, business cards and other advertising must be clear.  They must all definitively state how you are different.  It is important not to be vague.  Your client should be able to understand from your slogan “use this product/service and you will get this specific benefit.”  If this is not evident in your current slogan or reflected in your current advertising campaigns then consider a rewrite.  Companies like Nike can get away with slogans such as “Just Do It” because they have multi-million dollar marketing budgets that shove their image and identity down your throat.  We can not compete with that so every person that sees our advertising must be able to tell what exactly it is that we do and why they need it.

Price

Price often seems the first place businesses try to go in order to compete.  Namely because it is easy to drop the price.  The problem is that in most cases this is unnecessary and often times foolish.  Price wars rarely benefit any business.  If you choose to drop your prices merely to differentiate yourself from the competition you will lose that differentiation when they drop their prices.  Now what do you do?  Do you drop prices again?  You can’t suddenly raise them and choose another way to be “different.”  It is best to avoid this problem at the very beginning.

There are many ways to combat pricing adjustments.  To do that you must be different in other ways:

• Do something different – If you can offer clients something that is unique to them you can beat price.  For example, offer something of value to a specific client that you would not normally offer.  If you are a real estate agent you can offer a fax machine to loan to your clients while you are going through a transaction.  If a $50 fax machine, that you eventually get back, will make the difference between a 2.5% and 3% commission it is a small price to pay.
• Shift the argument – If your competition is cheaper than you are then focus on the long term cost savings of your superior service/product.
• High price differentiation – This method involves setting your prices high in order to set your self above the crowd.  People will often pay more to get the “best.”  Think Rolex.  If you have the opportunity to be the “Rolex” of your industry and offer the service/product to back it up then consider using much higher pricing as a way to set yourself apart.

Price is easy for competitors to copy and lowering prices only undermines your business plan.

Keep it simple stupid

Keep your products or services to a minimum.  If you are a grocery store owner then choice is great.  However, if you have a small interior design business specializing in retail, industrial, residential and children’s rooms means that you are, in fact , no specialist at all. If you can not differentiate across all of these categories the only difference left to make is price.  Which is easy to copy as we discussed above.

Control the Message

It is not simply enough to have the best product or service on the market.  It is often times the strongest perception in the marketplace that wins.  You must communicate what makes your product or service different and get the market to embrace that idea.  You can not over-communicate your difference.

Resist Growth

Well, resist growth sort-of.  Growth has a tendency to negatively impact you differentiation.  If you begin to grow and have the desire to expand your product line be careful.  It is a slippery slope from one extra product or service to trying the blanket approach we discussed above.  Growth often causes companies to become distracted and overextend their products or services.  Milton Friedman, the famed economist, once stated “We don’t have a desperate need to grow; we have a desperate desire to grow.”

This may seem counter-intuitive to most business minded folks but there are ways to grow while maintaining focus on what makes you different.  You can achieve growth by expanding into new markets.  For example, expanding your online advertising campaign from only Los Angeles into San Diego as well.  This allows for growth through acquiring more customers and does not threaten your differentiation.  Just be sure to research your new markets and ensure that your “difference” is relevant in the new market.

• Expand into new geographical territories
• Ramp up advertising to reach more customers

The idea to growth in this instance is growing customers not product lines.  This is the only way to stay on top in your market without watering down your image.

Conclusion

These are things that I have learned over the years but still have to come back to in order to remind myself.  I am not perfect at employing all of these concepts nor should you be.  Just remember that doing just one of these things can and will improve your business.  Dare to be different.  Dare to be a success.

JSM

Register HERE: http://urlidiots.com/index.php/race-to-1500-contest

Rules

TO WIN:
1. Must be an Entrepreneur or Small / Medium Size Business.
2. Must Follow on Twitter, Friend on Facebook AND Connect
on LinkedIn. All three are required*.
3. Must register on this page.
4. All requirements will be verified when the winners are chosen.

There will be 1 winner from each of 3 categories:

CATEGORIES
1. Most referred people.
This winner will be based on how many friends or colleagues you refer.
After the contest closes on February 15th 2010 please send us an email with a list of all friends that you referred.  Please send their name and email.  We will match both names and email addresses to get an accurate count.  Send this email to Sweeps@URLidiots.com with “Referrals” as the subject.  Your referrals will not be spammed nor have their addresses distributed/sold.
2. Most deserved – as chosen by other participants
This winner will have to post a story or YouTube video explaining why they
deserve to win a free website.  Post your submissions here: http://www.URLidiots.com/blog
- A judges panel will pick the 10 best submissions.
- Video submissions will receive extra credit.
- The 10 best submissions will be voted on by all participants via a poll on our
blog.
- Please Tag your submissions on YouTube with “URLidiots.com.”  This will ease
our finalist selection process.
3. Randomly chosen winner by drawing.

TERMS:

Winners will receive a website valued at $1500.  These websites will be completed within 120 days of contest closing.  Results will be announced to all registered participants on February 18th 2010.  Winners will receive a custom 5-10 page website with a year of hosting.  This website will include up to 25 email addresses.  If you choose to have an e-commerce website built you will receive 5 pages and up to 25 items entered.  We will also set up your PayPal, Google Checkout or Authorize,net payment gateway.

Some participation on the part of the winner will be required.  This includes picture submissions as well as text for the website.  Also any existing logos will need to be submitted.  A maximum of 20 hours will be spent on each site.  These terms are subject to change without notice.  We reserve the right to alter the terms of this agreement in order to effectively build a website for the winners.

All winners, in order to claim their website must agree in writing or via email to these terms.

Register HERE: http://urlidiots.com/index.php/race-to-1500-contest