When you are shopping for something, what’s the first question you ask yourself when considering a particular vendor or store? If you are like most consumers, the fundamental question, asked on reflex, is “Why should I do business with this person or business?”

Have you answered this unspoken question for your own customers and prospects? If so, does the answer make you stand out in your field, or are you simply part of the herd?

Every day, your customers and prospects are showered with advertisements, brochures, newsletters, Web sites, and other media that ask them to open their wallets. As a result of this barrage, buyers strive to tune out the noise by ignoring things that are the same.

Said another way, they commoditize the available choices. They identify the goods or services that, in their perception, are identical and differentiated only by price. Commoditizing makes everyone the same, part of the herd, and helps prevent “decision overload” by decreasing the number of choices from which to select.

Your challenge is to keep your business from being turned into just another sheep in the herd by your customers and prospects. How do you do that?

Perception.

If consumers look at your business, your competitors’ businesses, and (it can happen) a totally unrelated business, and see them as the same, you are in trouble. When this happens, your only competitive criteria are price and convenience – no customer loyalty, no recognition of value. Some companies may be able to stay alive as sheep, but they are unlikely to grow in any significant way or stay healthy over time.

Perception is reality. To differentiate yourself from the herd, you must clearly articulate your value and unique benefits. This is easier said than done, but it definitely can be done. To differentiate your business in your customers’ eyes, consider this approach:

• Articulate your view of the business (your internal perception). For example, why are you the one to choose over your competitors? Where do you create needed value for your customers? What are the values by which you conduct your business and how do they benefit buyers? Express your internal perception as clearly as possible.
• Look at your company through the eyes of your customers and prospective customers. Be realistic. Understand the strong tendency to commoditize and don’t fight it. Ask customers why they do business with you, what works and what doesn’t. Get a feel for how prospects view you, and how they make buying decisions.
• Pinpoint mismatches between your internal perception and your market’s perceptions. Don’t overlook simple things: Make sure your appearance, your Web site, your e-mails, and anything else that your market sees of your business all conspire to create the desired perception.

To differentiate yourself, stand out by creating the right perception. When your customers and prospects know that you aren’t just part of the herd, they will buy, and they will stay.