SBM 101: 8 Ways to Differentiate and Position Your Small Business

Trader Joe's High Protein Organic TofuFinding a unique way to position your business can be a major challenge, especially if you are a small business that is being challenged by a big box retailer or national competitor. But don’t despair. Even they have their weaknesses.

What you need to do is look closely at your competitors and identify where they are positioned, then you must decide where you want to position yourself. Consider this example. I have a buddy that runs a small outdoor store. About half a mile away there is a big box retailer that also sells outdoor goods. He struggled for a while when they opened up; however, what he did to combat them was interesting. Instead of worrying about selling to everyone, he focused his efforts and business on selling high end sporting goods (mainly camping, backpacking, hiking, and fishing) to true adventurers. He’s done quite well ever since.

That is your mission. Find your position and do it better than anyone else. In his case, he figured out that most of the big box guys carry average products for the mainstream. Their selection often sucks and finding specialty items is almost impossible. Good customer service is almost non existent.

Here is a list of ways (far from complete) to help you get started:

  • Price (high, mid, low)
  • Product (high, mid, low)
  • Local
  • Location (offline, online, both)
  • Service (poor, average, exceptional) – yes, there are businesses that purposely have poor customer service and it can work if done correctly
  • Features (few, many)
  • Exclusive offerings
  • Experience (spartan, catered to)
  • Continuity or loyalty programs

Whatever you pick, remember it has to be relevant to your target audience and you want to avoid selecting areas of differentiation that are easily replicated. Once you have something, commit to it for the long term and kick ass at it!

What can be added to this list? What companies excel at differentiation? Are there any that completely stand out among all the rest?


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