Whether you are in a niche market or not, your business has to be different than the rest, or people will have no reason to buy from you instead of anyone else. This is the heart of competition. And it depends on creativity, integrity, and current trends.

In a nutshell, market differentiation means, "Why should I buy from you instead of the 10,000 other people who are selling the same thing?"

In the world of web marketing, or even in setting up shop in your basement, that is the million dollar question. What makes you different.... or in the mind of the customer, what makes you BETTER?

Some Differences that Count

1. Product that nobody can get elsewhere. If you are the only source for an item, then you have cornered the market, and you have a powerful advantage. This is rarely the case though, as today's market is pretty much open.

2. Closer or more convenient access to a desired product. If you are closer, or make it more convenient for the customer to purchase the product, they will often buy from you rather than from someone who takes more effort. Website design, and marketing literature can REALLY be important to make this clear.

3. Better service. Ok, this one is overused. People often rule price above service, BUT they won't pay a lower price for downright lousy service either. They will only pay more or patronize a specific business for better service IF they think it is something they value.

4. Better price. Forget this one. Really. Small businesses can almost never compete on price and still make a profit. It is the temptation when starting out to try though, but don't. Large corporations with mega purchase power can always outdo you. Try to price competitively - in other words not outrageously high, but look for some other way to differentiate yourself.

5. Better VALUE. This is a different thing than price. It is not even really service. It is the total package of product, service, information, friendliness, personal attention, availability of several products instead of just one, integrity of the merchant, etc. This may be the most powerful thing in marketing because it is the whole feeling of shopping with you instead of the other guy. And it is very personal, and personality is often what differentiates someone more than anything else. This is also the most difficult thing to market because it is built on a relationship of respect between a merchant and customer, and that is something you cannot advertise! The only aspect that you can put in print is whatever makes your business a lower risk. This though is the thing that gets you repeat customers and referrals from happy customers.

6. Access to variety. Do you offer just one product, or do you offer a related range of products? If a customer wants you to find something, will you? The reason people shop at Wal-Mart is because they can get everything they need in one stop. Now, this doesn't mean spreading yourself too thin, but it does mean that if you want to build good customer relations, sometimes you should be willing to go out of your way for your loyal customers.

7. Customized and personal solutions. This is a powerful niche. It is a difficult one to advertise quickly though. It has power long term to keep customers, and to get orders though. And it can build long term customers who come back even if they know it will cost them more. This is established by ready access to a person, by email, phone, mail, or in person where applicable, and by a website designed with personal information about the business owner (why they do what they do, how they feel about selling what they sell, whether it is a family business or not, etc). And by replying personally to each email sent, in a friendly manner.

There are other things that you can form a niche around also. Whether you target a niche market, or whether you make a niche in a crowded market, the issues are the same:

1. How to persuade your customers that you are REALLY different than the other guys. This gets real hard if you are doing something that SOUNDS the same on the surface, but is truly different - especially when it is a market overpopulated with dime a dozen quick-buck artists. And telling the truth here won't help because the other guys are saying the same thing, and nobody can tell that they are lying and that you aren't. The SuperMom website is a good example. We say, "No SCAMS", and we mean nothing remotely like a scam. But everybody says that, when they are selling things that are so close to scams that people get taken all the time. You can perservere in such a market and eventually triumph, but it will take a lot more time to gain momentum. Search engines won't help you much because people looking to make a quick buck will always be able to afford better advertising.

2. How to help your customers find what they are looking for when they may not know it is available. When you have a new product, or a new idea, nobody looks for it because they don't know it is there. You have to market it in unexpected places so that people who MIGHT be looking can stumble on it. And you have to go through established related channels before you can build your own channel.

3. How to persuade your customers to select you from the range of similar merchants. If you sell a popular item, there may indeed be room in the field for one more. But if you market online, what is going to make someone click on your link rather than on the one next to it? Good ad lines can help. But you may need to market in a "corner store" manner. In other words, to a local market if possible (you are closer), or by being where they are at other times (through link exchanges, affiliate programs, directory listings, etc). Search engine placement won't mean a thing.

4. How to persuade people that you can serve them in a more personal manner, when your advertising is done in the same way as everyone elses. This is tough. The most powerful things that a small business can offer are intangible. I can give you a few more minutes of my time to make the sale. I can come up with a plan that fits you more closely than a large business can. I can congratulate you when your daughter gets married. Those are things that you can't buy with money. And you can't advertise them outright either! You can write your copy with a personal feel that helps the reader to feel that they know you. You can put email links and a phone number on every page of your site so that people know they can get in touch with you. You can put up a personal page with examples of how you have met specific needs of customers. You can quote satisfied customers (most are perfectly happy to let you do so) in the page margins. If you go into business, your friends won't necessarily buy from you - BUT, if you go into business, and make friends with your customers, they will return again and again. Estabilishing this is hard, but once established it has incredible power.

I have an opinion on market differentiation. It is different than what web marketing "pros" advise, because it is based on a lot of research, combined with personal experience as a small business. Most marketing books are aimed at people with adequate resources to do it the most popular (and costly) way. I never had that option because money was always too tight to spend on marketing. What I built, I did with hard work, intelligent strategy, and lots of patience.

Here is what I found were the most important things in successfully differentiating my business - setting it apart in the crowded markets:

1. Good website design. The website must be logical, easy to navigate so they can find what they need quickly, it must have a feel that is comfortable to the average user coming looking for what you are selling. The design has to be simple enough in appearance to look like a small business instead of a corporation, but to not have obvious design or HTML problems (overlapping text or pictures, badly sized tables, text that is too small to read, pictures that are too big to download quickly, links that don't work, background that conflicts with text, etc). Take a look at http://www.skinnyshoestring.com/sohotools/mistakes.htm for tips on avoiding the most common errors that will blast your business. If you hired it done, look anyway, because a distressingly large number of professionals at HTML code have no sense of logic or aesthetic taste at all! And many of them use bloated code or make things far more complex than they need to be to do the job correctly, making your pages too slow to be convenient to the user (if it is going to be slow, it better be worth waiting for!).

2. Personal feel throughout your advertising materials and in all your interactions with clients. Be professional, but also be personal. Tell them a little about yourself in your ad copy, talk to them like real people. In the web world, the personal touch is often lost, and if you can return that element to your dealings with people on a daily basis, whether your business is offline or on, you will make a good impression and get referrals and repeat customers. The better people feel they know you and can trust you, the more willing they are to buy. When you go online to purchase, or downtown to purchase, you look for one of two things: Someone who is friendly and knowledgeable, or someone who is well established enough that you feel they must have a good customer satisfaction level or they would not still be in business. So you have to establish either a history of professionalism, or to build a relationship with your customers individually so they will do more than just browse your site.

3. Advertising through sources that people trust. Leave some of your business cards with other local businesses that let you do that, or if friends will pass them out, ask them. Carry cards everywhere. Put a signature line in your email program and use it all the time. Find a newsgroup or e-group that deals with the topic of your business and participate regularly - offer advice when you are sure you know the answer. Don't push your business, just use that signature line - your URL and a description of what you do (limit to one or two short lines) - or if you don't have a website, leave your phone number and business name. Just be friendly and helpful everywhere that you have the chance and drop your contact info while you are at it. Do link exchanges with sites that have good reputations - make sure your reputation stays good or they won't link! Try building an affiliate program if possible, and find sources to recommend you.

Overall, the thing that was of most value to me on a budget was taking the time to find sources to advertise through that worked, being personal, and finding a venue to be helpful through - I offered advice and help on the Obsolete Computer Helpline for quite a while, and still have some loyal customers who came to me through that group because I could get them what they needed when they could not find it elsewhere, or because they did not quite know what it was they needed and I helped them find the right part. They trusted me because I offered free troubleshooting advice, and I was accurate and spoke in a way they could understand. Some of them still email me regularly to find out how I am doing because we have more than just an average business relationship.

Locally, posting ads helped, but word of mouth was most powerful. In fact, I got as many customers through word of mouth as through advertising, the main difference being that people who were referred by a friend are the customers who would not go away. I tried to shut down my computer tech support business, but they would not let me. They depend so completely on my judgment, and trust me so totally with their equipment that as long as I live in town, they will call me and request that I help them. They often overpay me on purpose, and send gifts to my kids. Those are customers that are worth far more than the business they brought in.

Differentiating yourself as a small business in a saturated market (and nearly all markets are saturated now) is less about price, and more about value. It is less about what you sell than how you sell it. It is as much about letting your customers know who you are as it is about letting them know what you do or what you sell.

The generalized information in this instructional page is based on professional advice which you can find echoed all over the web. The specifics of differentiating with a small business and on personalization are my conclusions alone. Try them if they make sense. All they take is time.

http://www.adventuretech.us/ - Affordable Website Design and Small Business graphic design services.