Background: Small service businesses face the challenge of differentiating themselves in increasingly competitive markets, such as Norway. While customers are always important to any business, how do the firms act differently under the impact of customer interactions? Objective: Assess the differentiation strategies that entrepreneurs in small service firms in Norway apply, under the impact of customer interaction. Method: A qualitative case study on Norwegian small service firms. The study assessed the ways entrepreneurs act in different circumstances based on feedback from customer interaction activities. Results: Ten entrepreneurs were interviewed in this study. The interviews were conducted with open-ended questions in a semi-structured format. Analysis of the interviews identified the following strategies: being the first mover on a new market, and focus on customer satisfaction on an equilibrium market. In addition, no matter how long the firms have been established, the entrepreneurs tend to apply effectuation principles, even they do not know about that in first-hand experiences. Effectuation principles help the entrepreneurs have quicker actions, adapt better the customers needs and thereby make them different. Conclusion: The study showed that all entrepreneurs paid strong attention to customer interaction, they invited customers join from the first stages of service development to make sure that they could control the outcomes. The study also revealed that many Norwegian entrepreneurs did not pursue a low cost strategy. Instead, they focused on service values and quality for increasing customer satisfaction. However, the empirical data did not show clearly the ability of entrepreneurs to exploit contingencies since none of the companies studied appear to take this action.