Differentiation
Differentiation is how you are different than your competition. It sounds simple but the question is what do you do differently than they do? This is literally one of the toughest questions that must be answered for any marketing strategy and tactic to succeed.
Believe it or not, this is one of the top reasons that marketing fails. A great test is to take the main description of your top 3 competitors and replace their name with yours. If the description still works with your name in it, you are NOT different. The way that you describe what you do on your website should not work if you substitute your competition’s name with yours.
You may be putting out great marketing pieces, but if you are not explaining your differentiation, then you are essentially just helping your competition grow their business. If you are going to put a lot of time sweat and money into marketing, make sure that you have a really good reason for a prospect to pick you over the competition.
Differentiation is not how long you have been in business…who cares? How is your length of time in business going to help me the prospect? Would you agree that there are some companies that have been I business for less time than their competition but are better companies? Of course there are. It is not how big you are. Small companies can do as good of a job and sometimes better jobs than large companies.
Example
Differentiation is NOT great customer service.
- The prospect has never worked with you and don’t know how you will serve them
- No one every says that they give crappy service
- How can you prove that you give great service? You can say it all you want, but it’s just words at this point.
What IS differentiation:
- The “Perfect Customer 7 Step Process” that every customer goes through – show them the process
- Some type of guarantee (maybe on price, time, service levels, product warranty, etc.)
- How you do business differently – and can prove it
The question is, how are you different than your competition and how do you back it up?. Now days, you can say anything you want to on the internet. The question is, why should I the prospect choose you? The goal of being different is to be the ‘no brainer’ choice for your prospects. You have to give them an overwhelming reason to choose you and not your competitors.
Here are the 6 reasons why differentiation helps:
- Make selling less of a hit or miss game. If you are neck to neck with the competition and there is no difference between you then the sale could be swayed by a ton of variables; who is better looking, talks more eloquently, is more friendly, is having a good or bad day. Do you really want to leave any sales to chance?
- Sales people will sell better because they know how their product/service is positioned as opposed to guessing
- Employee moral will improve when you have a differentiation. Sales people get very passionate and motivated when they know how to position what they are selling.
- Decreases the sales cycle because prospects will be able to make quicker decisions because they will know why you are the best option for them
- Less post buyer remorse. Many buyers will go through remorse once then have purchased a complex product of service wondering if they make the right decision. By having a firm differentiator, customers will ‘feel’ better knowing they made the right decision. (Don’t under estimate buyer’s remorse.)
- You have a better chance of getter referrals. If you are in a room with a competitor and you can state your differences clearly and your competitor cannot, I (your strategic partner, client or networking colleague) am more likely to think of you first when the time comes.
If you really want to succeed at marketing then finding your differentiation is crucial.
{ 4 comments… read them below or add one }
Great post.
In my opinion, the service guarantee is the best differentiator, because not only does it differentiate, it allows you to charge a premium price across the board.
The best example is fixed versus variable rate mortgages. People pay a substantial premium for certainty in price.
Great article as always…
Differentiation when competing globally can make the difference in success or failure for a company. When corporations compete for large-scale infrastructure jobs as an example, all the stops are pulled out. Everything from how companies first position to outstanding proposals and onto really creative and innovative presentations are what can make a difference in winning or losing. Global competition in many sectors is very intense. There are only small differences in companies who compete. In many cases, clients cannot tell the difference from one company to the next. When and if you can differentiate, you set yourself or your company away from the pack — and give a client a reason to choose or select you. It can make all the difference!
Gary Miller
Global Business Development Director for CH2M HILL (retired)
Thanks for the feedback. You are exactly right in that most companies can’t or don’t create clear space between them and their competitors. As a result, price is the only think the customer has to use for differentiation, and no one wins in that game. Or worse yet, if they can’t see a difference that shows them someone truly understands and can solve their problem, they make the dreaded “no decision”.
Ed, thanks for the comment. Guarantees are a clear differentiator, but impractical in some businesses. In many cases it be simply be explaining how you do what you do – when no one else takes the time to do that. Or even more basic – it can be asking the right questions up front so that the prospect understands that you don’t treat all situations exactly the same.