How to stand out from the crowd: differentiating your small business

I have been a business development and marketing adviser to small businesses for over 20 years.  Without question the biggest marketing challenge most small business face is:

  1. Clearly defining their ideal client, and 
  2. Differentiating their business from your competitors.

Are you in the ‘all things to all people’ category?

It is common for small businesses to have a broad and undefined target audience. 

For example, an accountancy firm recently told me that their target audience were businesses in the North West of England, up to around £10milllion turnover who require everything from payroll to audit.  

What they were actually describing was their current client mix.  

Your current client mix is not necessarily the same as your ‘ideal client’.  In fact, for the vast majority of small business it is very different.  

The reality is, we all have hundreds of competitors who broadly do very similar things to us. 

If your target market is too broad you may be emitting an ‘all things to all people’ vibe. In which case you are probably in no man’s land when it comes to messaging cut-through, positioning and differentiation. The upshot of this is, winning new clients is going to be a lot harder than it needs to be

So, how do you differentiate your small business and stand out from the crowd?

Step 1. Define the Ideal Client

While it is natural to assume that taking on a new client equates to growth, if that client isn’t a good fit it can actually stunt real growth. In some cases, working with clients who are a bad ‘fit’ can lead to such a bad experience that it can be detrimental – not just as an experience for both parties but reputationally, commercially and from a morale perspective too.  

Most businesses are best suited to serve a narrowly defined market segment – a sweet spot. It doesn’t mean the ideal client won’t grow, evolve and change altogether over time, but at any given time there exists a set ideal client for most businesses.

The trick is to discover what that ideal client looks like in the most specific way possible, and then build an entire marketing strategy around them.

For some, an ideal client might simply be a subset of people who can afford what you offer. For others, the ideal client might mean that the client has a specific need your company can really help with. But is also might mean the client values your unique approach and treats your staff with the respect the relationship deserves. A red flag prospect (we have all come across them) will suck the life out of a small business faster than almost any other dynamic.

A less than ideal client can also come in the form of a person with whom a company would love to work, but they just don’t really have the need that matches what the business does best. This could be a good friend or relative who works for an organisation that’s not a good fit, or someone at your tennis club who has a company you would like to help but doesn’t have the resources.

The following questions can help you define your idea client

  1. Who are your most profitable clients and why?
  2. Think about the projects or clients you have enjoyed the most – often this an indication of when you are doing your best work that is bringing real benefit to your client.  Are there any commonalities here in the type of work / challenges / sectors / contacts? If so, what are they?
  3. Have there been times when the hairs on the back of your neck have stood up talking to a prospective client because you know that you are perfectly placed to solve their problems?  What was it about these prospects that made them ideal for you?  Look for commonalities. 

Then, draw up a short list of what constitutes your ideal client. In doing this  a) they will be much easier to find, and b) you can build your profile around meeting their needs perfectly. 

Step 2: Differentiate the Business

Small businesses absolutely must find or create, as part of their strategy, a way to differentiate their business from all the other businesses that claim to do the same thing.

It isn’t necessarily a new concept, but it’s one of the hardest to get businesses to actually do. Everyone wants to think what they do is so unique. Unfortunately, in most cases it’s something that everyone either can or does claim as well.

Here’s a good way to get a sense of this idea. Cut and paste the first paragraph of your top five competitors’ websites, blacking out all references to names, and then pass the document around the office to see if anyone can recognize which company each paragraph belongs to. Chances are that the descriptions will be nearly impossible to tell apart.

One of the most effective pieces of research you can conduct to help understand what really sets your organisation apart is to sit down and interview a handful of clients over the years, who you consider ‘ideal’. Ask them these questions:

  • What challenges do/did you have that you are wanting us to support with (think about things around the core service you provide e.g. responsiveness, service levels, ways of working, etc)
  • What does ‘great’ service / support look like to you? 
  • Can you give me an example of when you received great service / outcomes and what was it that made it great?
  • Why did you hire us over the competition?
  • Is there anything that makes us different to others you have used and if so what?
  • Would you refer us and if so why?

Then, make a list of common problems and challenges they face and what they find most valuable in the how you helped them to overcome these. 

Armed with this information you will be able to position your business around providing solutions to common challenges and objectives for a specific audience – your ‘ideal client’. This will form the foundation of your messaging, tone of voice, marketing and prospecting.

Good luck and let me know how you get on!

Lindsey Moore, founder of Agnes Marketing, is an award-winning business development and marketing adviser to small businesses. Lindsey works with ambitious small businesses helping them to become much more effective in their business development and marketing activities. She does this through her consultancy work and her practical, no-padding training courses. These courses deliver practical and super specific advice, tips l businesses create a competitive advantage.