Some companies are obviously different. Google. Apple. Coke. They have unique products. You know an iPhone when you see it.

But there are more companies out there that look the same. How many lawn mowing businesses are there? Plumbers? Air conditioning installers? Accountants? Lawyers? Bicycle shops? Bicycle brands? Shoe brands?

Plenty.

How do you tell them apart?

I ran an IT services business. When I last checked, there were over 10,000 IT services companies in Australia. If you look at their websites, many of them look like they do the same kind of stuff. Because they do. There are even third-party marketing services that will create you a generic “IT services business” website, all ready to go. (Gross. If you want to scale, don’t do that).

If your company looks the same as most of your competitors, how can a customer tell the difference between you and them? If you want your business to scale, you need to attract customers.

Why would a customer choose your business, over one of the many alternatives?

You need to give them a reason. You have to be different.

How do you differentiate?

“But”, you say, “my industry – accounting, law or lawnmowing – is different. Everybody does similar stuff. They might do it their way, but ultimately it’s tax work, contracts or cutting grass!”

Right. And wrong.

Even when businesses do similar things, even to similar markets, they should have an angle. Something that is different from other businesses around you. Otherwise, you’re generic, and you really don’t want to do that.

A common way to differentiate is by target market. Horizontal segmentation, vertical segmentation, or quality.

Horizontal segmentation is where you target customers by size, or volume. Like an accounting firm that targets family businesses between $5m and $20m of revenue. Vertical segmentation is where you target customers by type, or industry – e.g. a lawyer that specializes in law for construction companies. And quality, is probably obvious – a lawn-care company that does high end residential with golf course quality.

Or you can have a slightly different product. Or a different way of purchasing your product. Or, there are many more ways to differentiate.

Even when you’re the same, be different

Some markets seem easier to be different in than others.

But it’s even a challenge in markets where we’re used to expecting differentiation. Using the examples again in my opening paragraph – Apple differentiated amongst numerous PC and phone makers, Google was one of many search engines (when they first launched), and Coke – well, coke makes sugar water. Yet all three are iconic for how differentiated they are when compared to the rest of their market. That’s why you know them.

When you find your angle – when you differentiate correctly – you want your target customer to be able to say “that’s the one for me!”

Some business owners – especially small business owners – are afraid to differentiate too heavily, in the fear that it will turn some customers away. And they’re right! Differentiation will turn some potential customers away. Like a magnet, some customers will be attracted to your business strongly, and some will be pushed away. However, if you don’t differentiate, you’ll be nobody’s favorite – and that’s a far worse position. You want to be somebody’s favorite. That’s how you can scale.

All the successful brands differentiate themselves. You don’t need to be totally unique. How different is Coke from Pepsi, or Monster Energy from Red Bull? Enough to be different, but they’re clearly in the same market.

End-to-end is key

Differentiation is not solely about how you advertise and market, although that is part of it. Differentiation is about aligning your entire business model with your part of the market.

If you advertise as a premium brand, but have a poor quality product and poor customer service, you’re going to struggle. You’d struggle to meet customer’s expectations, and have high churn.

On the inverse, if you target low-cost/low-margin, and you have exceptional products & high-touch customer service, you’d probably struggle to be profitable.

You need to align your products with your customer service, channels, and advertising. Ensuring you’ve got your internal business processes and systems aligned with your target market is key. The differentiation should be throughout your business.

Your differentiated marketing will drive customers to your business, but the differentiated service and product experience is what keeps them coming back – so you can scale.