3 Differentiation Strategies that WORK

Differentiation Strategies

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When I hear the term “differentiation strategies,” I think of a comment that I recently came across online: “Compare yourself to others, before your customers do.”

This made me stop and think.

In this day and age, we don’t like to promote comparing ourselves to other people. It stirs up anxiety and anger, depression and discouragement – no one likes to feel that way. 

But when it comes to building a business, it’s absolutely essential that you compare yourself to others. 


Because it will help you stand out in a crowded marketplace. More specifically, it’ll help you clearly define how you are different than (and better than!) your competitors.

This strategy is called differentiation, and it’s the one of the ways you’ll unleash your full potential and help your business grow

Try These 3 Differentiation Strategies

As a small business owner, you are tasked to differentiate yourself by highlighting your uniquely valuable offering.

Differentiation can involve many different strategies, depending on your business and market.

But, consider these three differentiation strategies to get you started…

1. Cost Effectiveness 💸

It’s important to note that “cost effectiveness” doesn’t mean cheap. Promoting the cost effectiveness of your products or services can look two different ways.

  • Offer more affordable prices than your competitors.
  • Offer similar or higher prices, but greater value.

Think carefully about what makes the most realistic sense for your business and your goals. For example, offering lower prices can be a good way to attract customers, so long as you maintain value and continue to grow. Be careful not to confuse affordable with cheap. Also, avoid setting prices so low that they become the reason you go out of business (cue the demise of the Michael Scott Paper Company)…

Alternatively, you can offer similar or higher prices than those of your competitors, but highlight the great value you offer. For instance, perhaps you offer added perks or benefits with the contracting of your services. Or, maybe your products are made with higher quality than your competitors’ products. 

Cost effectiveness can be a great differentiation strategy when you use it to build on your overall value. 

2. Personalized Customer Service 👩‍💻

When we think about small businesses, personalized customer service is often a key differentiator. Customers get to bypass annoying or ineffective robots and talk to a real person. Plus, they get someone that few others get: YOU.

Differentiate your business by highlighting not only the great attention you give your customers, but also the unique qualities that only YOU and YOUR BUSINESS can offer. For example, if you are known for responding quickly to queries, leverage this in your marketing efforts. Or, if you’re a family-owned business, highlight the unparalleled commitment you have to your customers.

By and large, customers love to patronize businesses that follow through with promises of excellent customer service.

3. Local Understanding 🔎

Finally, marketing your intricate understanding of a local community can be a great differentiation strategy.

Maybe your business operates in the same town you grew up in. Marketing your local knowledge can help you stand above competitors and establish yourself as an authority. Also, marketing your strong connections in the business community can help you build a credible – and distinctive – reputation.

Increasingly, customers are more inclined to shop at small and local businesses. Leveraging your foothold in the community can help you stand out.

Different Digital Marketing Agency

Need Ongoing Support?

Differentiation will look – well – different for every business. What works for one business won’t necessarily work for another.

That’s why it’s important for all small businesses to fully engage in a differentiation process. This process is a challenging journey, but it can be exciting and rewarding, too. 

When small businesses reach out to us for assistance, we at Spicy Lemon Marketing make it our mission to serve and grow. Clients are not just another number to us – they are small business owners making a dream happen. 

We can help you along this journey. Contact us today, and let us help your small business shine. 

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