Your business is set. You’ve developed a strong plan, you know your market, and you’re ready to become a success. But what sets you apart from everyone else? What makes your business unique? Many small businesses compete on price. However, competing on price will make your product seem cheap. No one wants a product that seems cheap. They want a product that is unique; a product that is different. This is where you will need to implement a differentiation strategy.
What is differentiation strategy?
Differentiation strategy is the development of a product or service that offers unique attributes valued by customers. The product or service is perceived to be better or different from the rest. With this strategy, you will want to identify what customers deem as the most important. You will need to offer a high quality service or product, the best solution, or an exclusive feature.
While it may cost more to focus on a quality product rather than pushing your product upon people for the lowest possible cost, look at the facts when it comes to offering high quality products or services.
- In Louisville, KY, 45 percent of consumers are willing to pay more to shop locally and find a higher quality item.
- 94 percent of people believe purchasing from a small business is important.
- More Americans today are willing to spend more money to support a small business.
- The need to help a small business is increased by 36 percent when consumers state they will travel further to support a small business.
- Many consumers believe it leaves a positive impact.
- They also believe they are buying quality products.
Quality over Quantity
That is what it’s all about – quality products. If a consumer is willing to travel further, shop locally, and support your business, wouldn’t it make sense to only offer quality products? Offering a product or service that is cheaper than the competitors’ doesn’t always profit in the end. When companies focus on the dollar made more than the caliber of their product, they lose focus on the consumer. As a result, the consumer will go elsewhere for the same service or product. Not only is differentiation strategy effective, it helps promote your business in a positive light, and it is the smartest strategy for a small business. Knowing that your hard work will pay off in the end, it makes sense to utilize effective strategies to optimize your potential.