Differentiation Is Easier Than We Think…Here’s How!

Most of us understand basic marketing concepts and the importance of differentiating ourselves from commodities. This differentiation is generally accomplished by various actions including creating brands, quality, packaging, social and web marketing. This article argues there are other strategies and operations that can be more effective, less expensive, and simpler methods of differentiation for you and your company.

However, I find clients are frequently excellent at describing their perceptions of how they are different. Phrases like “better people,” “expertise,” “higher quality,” “better service,” etc.  My suggestion is to eliminate these words as much as possible and consider new approaches to differentiation.

Product or Service

The weakest aspect of many client programs comes in the form of competitive analysis, market research, marketing plans, and distribution plans. These general business tools do little to determine your customers’ attitude.  There are, however, three areas you can focus on differentiation to achieve greater success:

1. How are you different?
2. Do enough customers care about your difference?
3. How can you communicate your difference?

Analyze prices and costs and develop new ways to package your offerings to provide better value and more profits. Topics like free shipping, providing great customer service, buying in volume, and catering to consistent customers are great places to start. A more specific example is how Costco compares to Neiman Marcus is a way to provide less traditional   customer service but more value. One retailer bases their marketing on selection and quality, while the other on value and price; both have satisfied customers.

Risk and Probabilities

Individuals and companies often get caught up in the probability of failure and are too afraid to take more risks, even with reasonable probabilities of success. The economy is growing, unemployment is down, both, capital and the stock market is up which means there are lots of opportunities. Some famous quotes on this issue:

“You miss 100% of the shots you don’t take.” -Wayne Gretzky

“Because the People who are crazy enough to think they can change the world are the ones who do.” -Steve jobs

“What would you do if you weren’t afraid?” — addressing the self-doubt that still holds many women back. Sheryl Sandberg, “If you limit yourself to what’s comfortable, you’ll deny yourself of what’s possible.”

Probability and research can greatly reduce risk. Considering these issues can greatly improve our comfort in taking some risks. For example, there is a huge difference in predicting results where there is significant and consistent historical data. However, predicting results for new programs or with little or inconsistent data becomes much more difficult. This uncertainty can be reduced by a number of tools like more research, focus groups, or examining alternative models and their probabilities.

Consider, more attention to the process of decision making… How good is our information? What are the consequences of mistakes and how much risk can we afford? I frankly believe, with the exception of issues like safety, we can afford more risk. We generally are overly concerned with the consequences of mistakes than the potential opportunity.

Process

Empower your staff and management. Empowerment requires that you trust your employees and staff. This requires hiring and training good people, giving them the authority they need to do their jobs well, and understanding that they will make mistakes at times. Remember the United Air Lines fiasco earlier this year was largely a result of antiquated rules and little flexibility.

Create a more open and honest culture which encourages open communication and collaboration. Informal communication and social interaction can be great ways to foster a better environment and evaluate more alternative solutions.

Develop reliable resources outside your company.  Don’t go to Uncle Buck, or Auntie Mae. They love you too much to tell you the truth, nor will they truly understand your business’ needs. Visit websites like Shopify, publications like Entrepreneur, social media groups that target your niche, your library, and incubators for networking opportunities.

Get to know your business and customers inside and out, make friends with financial statements and the Internet.  (Visit places like  www.startupconnection .net , BPplans.com and  Score for lots of information and free tools.

Finally, be as personal as possible. Saying “please, thank you, and, how are you?” are free and can be the most effective tools possible. Understand and relate to your customers and their needs rather than using some universal sales pitch. This is where lifetime customers are found.

In summary, I refer you back to the beginning of this blog and encourage you to consider more about how to differentiate yourself more in our changing environment. However, I also suggest improving the tools and culture to encourage better success and considering more risk. My best observation is “if you aren’t making mistakes you aren’t trying hard enough “

About Bert Shlensky

Bert has over 30 years of executive experience as a results-driven executive leader, along with, a strong track record of achieving growth and operating successful businesses.

Bert has counseled over 1500 small businesses and currently serves as President of StartupConnection.net, (www.startupconnection.net)  a consulting firm for entrepreneurs. Our focus is on understanding and analyzing the dilemmas and challenges to help entrepreneurs have better results.  We empower clients to understand and balance the risks of failure and the rewards of success.