Graham McGregor 's Opinion

A weekly marketing column by Graham McGregor

Graham McGregor: Differentiating your business

12 comments
Photo / Thinkstock
Photo / Thinkstock

I've just finished reading an excellent guide on repositioning a business. It's written by my good friend and marketing expert Bob Serling.

In this guide, Bob shared the story of a local coffee shop in his home town and how they differentiated their business in a positive way.

Bob lives in a beach community in San Diego, close to the Pacific Ocean.

Because of the exceptional year round climate, many people lead a very active, outdoor lifestyle with jogging, walking, cycling, and surfing being some of the favourite pastimes.

Along the coast, you'll find dozens of outdoor cafes, restaurants, and coffee houses.

A few years ago, a local merchant decided to jump in on the gourmet coffee craze.

He opened a shop right on Pacific Coast Highway, just a block from a beautiful park that overlooks one of the area's most famous surfing beaches, which is a major tourist attraction.

The location he chose was superb and he expected to do a landslide business as soon as he opened his doors.

Unfortunately, this wasn't the case.

Now it appeared that he had done everything right. He offered an eclectic selection of custom brewed coffees, the place had a casual homey feel that made visitors feel welcome, and he hired an eager, attentive staff to serve the customers. But sales were just lukewarm.

To make things even worse, not long after he opened, Starbucks announced that they were opening a new location just three blocks away. Fortunately, this merchant could see the writing on the wall and knew he had to act fast.

What would you do in this situation?

What many merchants would do is cut their prices. They would figure the only way to beat a powerful chain like Starbucks would be to undercut them on price. And they would be making a horrendous mistake.

First of all, very few people buy anything based on price - there is almost always some other factor that makes customers buy from you.

Secondly, trying to compete based on price alone is a losing proposition.

There is always someone who will come along and offer a lower price than you.

If all you have to offer is a low price, you can easily get caught in a continuing price-lowering war that will soon take its toll on your business.

What this merchant did was a stroke of pure genius.

He conducted a bit of quick, shirt-sleeve research and noticed that he did a pretty strong business with the local surfers. So he decided to capitalize on this not by lowering the price of his coffee, but by offering surf wax (the wax that surfers use every day to give their boards proper grip) at his cost.

He loaded up on all the most popular brands of surf wax and sold them at cost, far below what all the local surf shops charged for wax.

It didn't take long for the word to spread. And this quickly resulted in his coffee shop becoming a favourite hang-out of the local surfers, who bought coffee, muffins, sandwiches, and lots of other assorted goodies.

Because the coffee shop was now jammed, it caused even more people to want to come in and see what all the activity was about.

By offering a popular product in order to draw the attention of a sizable customer segment, this merchant conquered all his competition and has continued to do so for many years.

One of the things I personally take away from this story from Bob is the value of looking for a positive way to differentiate your business.

In many cases you don't have to change dramatically what you sell or offer.
Just change something to make your business more appealing to your ideal clients and customers.

"In order to be irreplaceable one must always be different" - Coco Chanel

Action Exercise:
How can you positively differentiate your business so that you become more attractive to many of your ideal clients and customers?


Graham McGregor is a marketing consultant and the creator of the 396 page 'Unfair Business Advantage Report.' www.theunfairbusinessadvantage.com (This is free and has now been read by business owners from 27 countries.) You can email him at the link above.

Graham McGregor

A weekly marketing column by Graham McGregor

Have your say

We aim to have healthy debate. But we won't publish comments that abuse others. View commenting guidelines.

1200 characters left

Sort by
  • Oldest

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n3 at 22 Apr 2014 03:57:30 Processing Time: 659ms