How to stand out from the competition in 3 simple steps
One of the biggest challenges entrepreneurs face when launching their business is how to get new customers to choose a relatively unknown product or service in a crowded market.
The truth is that it’s almost impossible to launch a truly unique business. On the rare occasion that it happens, it’s usually not long before alternative products pop up on the market at cheaper prices or existing competitors add new features. We’ve all seen this play out with Instagram adding Snapchat-style filters, video reels á la TikTok and even launching an X/Twitter rival app.
What you really need is a strong strategy to differentiate your brand. Here is a step by step guide on how to create a strategy to stand out from competitors that will make the process stress-free.
What is brand differentiation?
Differentiation is not about being unique. As the word itself suggests, it’s actually about being different. This means being better or more well known for something.
The goal is to align with an attribute or association that your target customers care about and then communicate to them that your brand is more of this than other brands in the market.
How to stand out from the competition in 3 simple steps
STEP 1 — Understand what your target customer really wants
In the beginning, we often want to cast our customer net wide and appeal to everyone. We make the mistake of thinking that if our brand appeals to everyone, we will get more eyeballs on our offer, more users, more sales and more revenue.
But if you’re promoting your brand to 'everyone', you probably don’t have a good idea of their needs, desires, attitudes and behaviours. Without this information, it will be impossible to differentiate your brand and stand out.
For example, the following brands are all targeting very large customer bases, but they don't appeal to 'everyone'. They each have a very specific target customer:
Airbnb targets travellers who want to feel like a local
Patagonia targets environmentally conscious adventurers
Walmart targets regular people who aspire for more for their families
If you don’t currently have this level of specificity, you need to gather qualitative data through calls, interviews, coffee chats or online forums to build a clear picture of your ideal customer.
STEP 1 — Action points
Seek out your target customer and schedule 10 market research calls.
Create a discussion plan to make sure you capture the following:
Relevant Demographics: location, age, income, education etc.
Attitudes: views, perceptions, feelings, barriers, beliefs.
Behaviours: preferences, satisfaction and usage of other products/services in existing market.
Ask permission to record the call and take notes on their pain points and desired results.
On the call get into listening mode, don't guide the conversation too much and let them talk about their current views, behaviours and problems within your industry or niche.
Review all the calls and look for patterns or trends on what this group of people really wants.
STEP 2: Map your competitive landscape
Now it’s time for phase two of your market research – the competitor analysis. It can be easy to go for one or two obvious businesses that exist in your market and leave your analysis there.
But, it’s beneficial to go deeper to really understand where you can create real differentiation. There are three types of competitor that you should broadly understand following this research, they include:
Direct competitors: they are offering the same product or service and customers would need to decide between you and them
EXAMPLE: Someone shopping for a running shoe may go to a department store and face a choice between Nike or Asics.
Indirect competitors: they are operating in your industry and meeting the same needs or goals with a different product or service
EXAMPLE: After this person buys their running shoe, they feel thirsty and want to grab a drink. The same department store has a coffee shop and a juice bar.
Substitutes: Completely different products or services customers could use instead of yours to solve the same problem
EXAMPLE: At the end of the shopping trip this person needs to get home. They could either travel by train or bus from outside the department store.
STEP 2 — Action points
Use Google to gather a list of all three types of competitor for your industry. Here are some search techniques:
Search an exact description of your product or service
Search generically around your niche e.g. ‘tools for email marketing’
Search for your industry + business model e.g. ‘coffee subscription’ or ‘jewellery marketplace’
Search ‘Find cheap [your product or service]’
Search for the problem you solve e.g. ‘my rent is too expensive’
Use the list to scan websites, social media pages and news articles. Create an Excel or Google Sheet that captures the following:
Description of what they offer
Average price point
Target customer
Customer sentiment (check third party review sites and social media comments)
Pros and cons a customer might experience with their solution
Overall health (size, funding, marketing strategy, brand, growth)
STEP 3: Define your differentiators
Finally it’s time to apply the learnings from your research to your own offering. The goal is to define one to three attributes of your business that your customer really wants and you can genuinely deliver better, differently or more than any of the competitors.
STEP 3 — Action points
Write a list of the following for your own product or service:
Features
Benefits
Problems it solves
Results customers get
Look at your customer interviews, competitor research and your own list from the previous point to identify your differentiation points. The following prompts might help:
Looking at the ‘pros’ lists from each competitor, what can you deliver on better?
Looking at the ‘cons’ list from each competitor, what do you already do that addresses these issues?
What is the one result your target customer wants and how do you deliver it?
Where can you provide more value for money, deliver faster or get better results?
As a small or relatively new business where can you use smallness as an advantage over larger competitors?
Write down 1-3 attributes that your customers want and you can deliver better than your competitors.
Getting an edge over the competition
Standing out from the competition is not just about having a brand that looks distinctive. Without the differentiation strategy to back up your branding, you will find yourself struggling to attract your ideal customers away from existing brands and solutions that they are more familiar with.
At brandbeam we used this exact 3 step strategy to differentiate our own brand and it made it so much easier to create all our marketing communications and materials because we were 100% clear on what people wanted from us and how we could deliver it. Use these steps to create your strategy and in no time, you’ll stand out head and shoulders above the competition.
ABOUT THE AUTHOR
Katie has more than a decade of experience in brand marketing having worked with some of the world’s most iconic brands from the BBC to Burberry through to British Airways.
She is on a mission to make branding easier and more affordable for entrepreneurs so they can build brands that fuel business success.
