Key Learning Outcomes

  • Learn to respond to questions from prospective clients such as “why should I do business with you?”
  • Differentiate your business from your competition through uniqueness, superiority or price.
  • Analyse current points of difference to see if they still hold true as time moves on.
  • Refer to the case study business for examples of points of difference for a business.


When thinking about your business, it is essential to be clear on what sets you apart from your competitors. This is your point of difference or unique selling proposition. Imagine a prospective client has just asked you the simple question, “Why should I choose to deal with you?” Can you clearly and concisely list the reasons? If you are not clear on the reasons, you need to spend some time identifying what they are and if you cannot find any, it is essential that you develop some as a matter of urgency.

There are really only three ways to differentiate your business from the competition.

  1. You have something to offer that is unique.
  2. You are providing a product or service better than your competitors.
  3. You are offering the same product or service as your competitors at a lower price.

At Absolute Best we prefer our clients to differentiate on value rather than on price. Being the cheapest may work in the short term but is dangerous as a long-term strategy. By differentiating through offering unique or superior products and services, you are also likely to be able to demand higher prices than your competitors.[wlm_ismember]


When you have something unique to offer a client, it provides you with a clear point of difference. To pass the uniqueness test you have to be able to say “and no other business can offer you this”. Some examples of uniqueness could be:


To differentiate by providing higher levels of service or product than your competition is a valid way to create a point of difference in today’s competitive world of business and in industries where it is more difficult to provide a unique offering. The thing to remember is that this can be subjective and you have to be able to back up these points of difference with evidence. Some examples could be:


If you are going to differentiate on price, you need to determine a strategy for the longer term. Some businesses have successfully differentiated by being the most expensive; however, it is important to remember that those businesses are able to do this through offering exclusivity and quality. Think about some of the high-end boutique brands with waiting lists for new products.

If you are looking to differentiate on price by offering your service at a lower rate than your competitors, you will want to think about this strategically. Usually the best way to do this is through offering the lower price for a limited time. For example, when we look at retail promotions such as a stock take or end of season sale, these work to increase revenue through offering discounts for a very limited time. The thing to remember is that while such sales can boost revenue, unless you are bringing new customers into the business, you are likely to be redistributing income that you would have got from your regular clients regardless of the sale. Another strategy used successfully is an introductory price offering for a new product or service.

Case study

For the business plan case study business, The Best Beauty Salon, a number of points of difference are identified in the business plan, as follows:

Once you have identified the points of difference, you will need to analyse them to ensure that they fit with what your customer wants. We suggest you read the article and take our ‘so what?’ test to ensure you are selling features that appeal to your clients.

The next step in the planning process is to begin your research and analysis.  The market identification article will be the first in this section.[/wlm_ismember]

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