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Are you ever frustrated or hesitant when you talk to prospective clients because you can't readily explain why they should hire you rather than go to someone else? Sure, you might have your 30-second elevator speech, but then they ask you that dreaded question, "So what makes you different?" Then, all those self-doubts creep in, and you just aren't sure what to say. Differentiation can boost confidence--yours in yourself and that prospective customer's confidence in you!

Dif-fer-en-ti-ate v. tr. To perceive or show the difference in or between; discriminate.

In business terms, to differentiate means to create a benefit that customers perceive as being of greater value to them than what they can get elsewhere. It's not enough for you to be different--a potential customer has to take note of the difference and must feel that the difference somehow fits their need better. (Other words that mean virtually the same thing: Competitive Advantage; Unique Selling Proposition; or Value Proposition.)

As you are building your solo business customer base, you can use differentiation to attract more clients. Once you have momentum, differentiation allows you to charge a higher price because you are delivering more value to your clients. Make a point to evaluate and adjust your differentiation methods at least annually.

The various methods of differentiating a solo businesses fall into four general categories:

Price Differentiation
Focus Differentiation
Product/Service Differentiation
Customer Service Differentiation

Price Differentiation
Differentiating on price is probably the most common and easily understood method. HOWEVER, for self employed business owners, caution is in order. On the one hand, potential customers might expect a lower price from you than from your larger competition because they perceive you as having less overhead, etc. On the other hand, cheaper prices can evoke perceptions of lower quality, a less-stable business, etc. And if you compete on price against competitors with deeper pockets, you can price yourself right into bankruptcy. Be creative with this differentiator by competing on something other than straight price. For example, you might offer:

• More value--offer more products or services for the same price.
• Freebies --accessories, companion products, free upgrades, and coupons for future purchases.
• Free shipping, etc.--convenience sells, especially when it is free!
• Discounts--includes offering regular sales, coupons, etc. (see cautions above)

Focus Differentiation
For successful self employment, this is the most important method of differentiation, and in many ways, the easiest. Why? Because as a self employed business owner, you simply can't be everything to everybody, so you must pick a specific way to focus your business. Once you have done that, you have an automatic advantage over larger companies because you can become more of an expert in that one field --and you can build close relationships with key clients that will be hard to duplicate. For example, you might differentiate yourself through:

• Location--take advantage your closeness to prospective clients.
• Customer specialization--be very specific about what characteristics your customers will have--for example, racing bicycle enthusiasts or companies with a spiritual conscience.
• Customer relationships--know your clients really well, form partnerships with them, and get them to speak for you!
• Affinity relationships--associate your product/service with a well-known person or organization.
• One-stop shopping--offer everything your target market needs, in your area of expertise.
• Wide selection (within your niche)--although this one may seem to be the opposite of focus--the key is to be very specific in one dimension and very broad in another.

• Quality--create a product or service that is exceptional in one or more ways. Examples: Lasts longer
• Better
• Easier to use
• Safer
• New/First--be the first one to offer something in your location/field.
• Features/Options--offer lots of choices, unusual combinations, or solve a problem for a customer in a way no one else does.
• Customization--as a solo entrepreneur, you may be able to more easily handle special orders than big, mass-market competitors.

• Deliver Fast--next day, or one-hour--make it faster than clients think possible.
• Unique channel--offer a service over the phone or Internet instead of in person or in their office rather than yours.
• Service-delight clients!--it may seem expensive to offer exceptional service--but it pays off in word-of-mouth advertising.
• Before/during/after-sales support--provide technical or other support to customers using your product. You might use joint ventures to provide that support--but clients will perceive it as being from you!
• Guarantee/warranty--offer 100% money-back, or free replacement parts.
• YOU--offer yourself, your unique blend of talents and skills, to attract clients. Make sure they get access to you, too!

• Get to know your customers!
• Pick a blend of differentiation methods that, in the eyes of your clients, truly sets you apart.
• Talk about your differentiation in terms of customer benefits.
• Tell everyone about what differentiates you--often.
• Keep your differentiation fresh by listening for changing customer needs.