Small Business Advice - Three P's of Differentiation

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Three P’s to Differentiating Yourself
From the Big Box or other Competitors

Are you American Apparel or Tiaras?

Are you Whole Foods or Cross Plants and Produce?

Are you TCBY or Lone Star Delights?

Chances are, if you’re a small business owner, you identify with the single-location, mom & pop shops (that all reside in Kyle, Texas where I live) that I mention second in all of these scenarios.

So, how do you play with the big boys that seem to have a set brand, identity, and deep pockets... who offer an item that is similar to yours? It’s all about differentiating yourself and playing the local card.

 

How do you do this? Weave your business into the thread of the community. Be a presence. Do things that your national chain competitor can’t, or won’t do. Give someone a reason to shop at your store… other than you are local.

In this article I will share what I call the Three P's of Differentiation – Personality, Price, and Participation.

The Owners of Cross Plants and Produce pose with Santa
surrounded by their annual Christmas Tree Forest.
They've got personality!

Personality

You need to have some… or at least your store does. You’ve got to give someone a reason to shop with you. Do you have something eye-catching as your storefront? Once someone walks in, are they greeted with an interesting looking place beyond the four walls that house your products? Do you rotate your inventory so someone has something new to see (even if it was already in your store before) when they walk in? Do you have a mascot? Are you, the owner, memorable? Is your storefront?

New customers tend to come back to a place that looks inviting… and current customers will most likely tell friends about a place that has character.

Price

Are you playing the price game with the big box stores and coming out even or winning? If so, it might be a good marketing approach to talk about it. “For about the same amount as you spend at a chain store for a shirt, you can come in here and find something you won’t see anywhere else.”

Maybe you can’t compete with the big box on price. That’s OK. Sometimes it’s even better. You have a better product, so it costs a little more… but it’s worth it. “Our shirts may cost a little more than the one you pick up at a big box store, but they come from small boutique companies who do shorter runs, meaning you can pick up a beautiful blouse that hardly anyone else has. Treat yourself or your loved one to the best.”

Now, don’t under-price yourself or you might just come off as cheap. You have to make enough to pay rent, employees, electricity and anything else that might come up at your storefront. Oh, and make sure YOU get paid as well. Why are you doing it if it’s something that you aren’t able to make a living at it?  The common rule is “keystone.” Whatever you buy a product from your supplier for… you should AT LEAST double that price for the consumer. That way you can pay for the roof & support you need to operate a business.  

If you sell something that is really expensive.. chances are you’ll have to settle for a lesser markup… and if you sell something really inexpensive, you might get away with a larger markup. Do your homework and see what similar things are going for… then you’ll have your answer.

Volunteering to hand out water at Mile Marker 1at a 5k.
The (former) owners of Tiaras (L), a Realtor and an owner of a
local computer solution business. Participating.

Participation

Participate in your community. There are many ways to do this. This is where I think about time & money. You have to spend one of them to participate.

You can make the time to meet new people by volunteering on boards, at events, and for community committees. Get to be known in the area as a small business that gives back on a personal one-to-one level. This is the “pound the pavement” way to get your business’ name out there.

You can spend the money (or product) to support things in town like school events, community happenings and non-profits that interest you and/or your customers.

My suggestion is to set a budget for participation, be it volunteering or monetary, because there is only so much you can do without compromising your life and/or your business’ profit.

I hope you see value in this piece and you have a chance to evaluate your own business to see what you’re doing to answer to the three p’s of differentiation. If you have any questions or feedback, please let me know. Thanks for reading.

 About The Author:

Sean Claes has worked with Mom and Pop shops, International Corporations and the Music Industry on their branding, marketing, events and communications for more than 15 years. This article is just a sample of the observations he's made over the course of that time. For more information or to see how he might be able to help grow your business, contact him at seanclaesATseanclaesDOTcom.

Read more Small Business Advice via his Small Business Marketing page - link.