How Do You Differentiate Your Business?

Textbook Definition

Differentiation is a competitive strategy in which a business distinguishes its products or services from those of competitors through unique attributes, such as quality, process, people, location, or relationships, that customers value.

In Plain English

Differentiating your business means making the real difference between you and your competitors visible to customers. Not your logo or your price, which anyone can copy. The people, the place, the process, the proof, and the history that only you have.

Why Is a Label Not Enough to Stand Out?

The moment your marketing works, someone will copy it. Your label, your words, your look, sometimes your name with one letter changed. If a label is all a new customer knows about you, the copy wins half the time.

Differentiation is not a slogan about being different. It is the real stuff behind the slogan, put where customers can see it: the people by name, the place with directions, the process they can watch, the date, the signature, the proof.

Signs you have this problem:

  • A competitor has copied your look, words, or name.
  • Customers cannot tell you apart from cheaper options.
  • Your marketing describes things anyone could claim.
  • Your people, place, and process are invisible to new customers.
  • You have never registered your business name or logo.
  • You only fight copycats, and never show customers the difference.
The copycat did the copying. That is on him. Showing customers the difference is the part that is yours.

What It Looks Like When Someone Copies Your Jar

From the Fabled Forest · Chapter 15

Doctor Owl found jars on Sunny the sea otter's cart that looked almost exactly like Beatrix's honey: same glass, same lid, a crown with five points instead of six, and BEEATRIX FOREST-STYLE HONEY. The back label copied hers, even "come and see." There was nowhere to come. Inside was syrup.

Sunny could copy the label in an afternoon, because the label was all a coast customer knew about Beatrix. Doctor Owl had her draw a line down a page: what he can copy, and what he cannot. Glass, lid, gold, crown, words, and price went on the left. Her helper Juniper filled in the right: the hive, the meadow, the second station, the Tuesday shipment, the date, and Juniper herself.

Beatrix put the right side on the jar: batch date, directions to the hive, visiting hours, and her signature. She met the dock store owner and left a card with a photo of the hive and the line: if the crown has five points, it is not ours. She wrote to every customer who had visited. She also saw a trademark lawyer. Sunny's jars stopped selling in two weeks.

Beatrix's story is Chapter 15 of Marketing for Small Businesses, Book 4 of Dr. Paul's Fabled Forest Business School Series.

How to Differentiate Your Business in 5 Steps

One page, two columns, and the honesty to fill in the left side first.

  1. Draw a line down a page.

    Left: everything a competitor could copy in an afternoon. Right: everything they could not.

  2. Be honest about the left side.

    Your logo, your words, your price, your packaging. Those can be copied, so they cannot be your only difference.

  3. Fill in the right side with your team.

    People by name, the place, the process, history, relationships, proof. Your staff often see differences you take for granted.

  4. Put the right side in front of customers.

    On packaging, your website, signs, and photos. Names, directions, dates, signatures, and things customers can see for themselves.

  5. Protect your name and mark, and tell your customers first.

    Ask a trademark attorney about registering your name and logo (in the US, through the USPTO). And tell your best customers the truth before a copy reaches them.

Dr. Paul's Insight

The most common mistake is doing only one of the two. Showing the difference works on every copycat. The legal step works on this one. Do both. And write to the customers who already know you. The fastest way to beat someone telling your story is to tell it first, to people who already know it is true.

Worked Example: Copy vs. Original Copycat jars: about 20 on the shelf at $5, selling 2 while Doctor Owl watched. Every sale to a confused customer is a lost sale for the original, and a bad taste blamed on the wrong name. After a signed label, a photo card, and 41 handwritten notes to past visitors: copy sales stopped within two weeks. A basic trademark consultation is usually a modest one-time cost compared with years of protection. Ask an attorney for current fees. Figures are an illustration to show the math, not a projection for your business.

Sample: Copy vs. Cannot Copy

Fill in the left honestly. Show customers the right.

Business: Small honey producerFilled in by: Owner and staff
A competitor CAN copyA competitor CANNOT copy
Glass jar and lidThe hive, open to visitors on Sundays
Gold label and crown logoThe beekeeper and her helper, by name
The words on the labelHand-checked twice, with a batch date
The priceDirections to the meadow, a short walk from the ferry
"Come and see"Dozens of past visitors who have met the owner

Sample for illustration. Talk to a trademark attorney about protecting your name and logo.

Video: How to Stand Out When Competitors Copy You

Video Coming Soon

How to Differentiate Your Business From Competitors

Dr. Paul builds a "can copy / cannot copy" page and turns it into packaging and messaging on screen.

He Hasn't Got a Juniper

Chapter 15 · Differentiation

Feel It, It's Real: A Bee's Knockoff

"He can't copy me," said Juniper. "It says 'checked by hand' on his. It doesn't say by who. Mine says 'once by Juniper.' He hasn't got a Juniper." She looked at the jar in her hands. "He hasn't got a second station, either. Or a Tuesday. Or a date. Or the meadow road. He's got a crown with five points and a bucket of syrup."

What went on Beatrix's new label, and who did she write to? Find out in Chapter 15. Book 4 of Dr. Paul's Fabled Forest Business School Series.

Get the Book on Amazon →

Differentiation Questions

What are examples of differentiation for a small business?
Examples include a named owner or expert customers can meet, a visible process like an open kitchen, a local source customers can visit, a strong guarantee, faster or more personal service, specialized expertise, and long relationships with customers. The best ones are true, specific, and hard to copy.
What is the difference between differentiation and positioning?
Differentiation is the real difference between you and competitors. Positioning is how you communicate that difference so it holds a clear place in customers' minds. You need something real to differentiate on before positioning can work.
Should a small business trademark its name?
It is often worth considering, especially if you sell beyond your immediate area or your name is distinctive. A trademark attorney can tell you whether your name and logo can be protected and what it costs. Registration helps you act against copies that confuse customers.
What should I do if a competitor copies my brand?
Document the copy, talk to a trademark attorney about your options, and do not take matters into your own hands. At the same time, make your real differences more visible and tell your existing customers how to recognize the genuine product.

Written by Dr. Paul Borosky, DBA, MBA, business consultant and author who helps owners get found by the right customers. Want help finding and showing what makes your business different? See business growth plan options.

This page is for general educational purposes only. It is not legal, financial, or other professional advice. Trademark, privacy, and advertising rules vary, so talk with a qualified professional before registering a name, collecting customer data, or making claims about a competitor. Dollar figures are illustrations. The Fabled Forest and its characters are fictional. For decisions about your own business, consult a qualified professional.