Finding that Elusive Point of Differentiation

In a previous post, I discussed the importance of differentiating your business (and brand) from competitors, while acknowledging how challenging that can be. I suggested learning as much as possible about your customers (current and prospective), and analyzing your competitors to see how they are trying to distinguish themselves and promote their products and services. I suggested some questions you might ask as part of this analysis and shared some tips for conducting this research.

Once you have performed that analysis, and assessed your own offerings to gain a reasonably objective understanding of how well your business stacks up, it’s time to consider various ways to distinguish yourself in a crowded marketplace.

First of all, you need to avoid marketing clichés and unsubstantiated assertions. If you’re going to claim you have the “best employees,” or offer “superior product quality,” you’d better have some evidence to back that up. Consider Boston Brewing Co., the company behind Sam Adams Boston Lager. When the company touts its superior quality, it supportsits assertions — for example, with discussions of its four-vessel brewing process, its secondary fermentation (krausening) and the specific choice hops it specifies for each of its myriad brands.

Are such claims credible? While I enjoy the company’s beer, I don’t know whether that enjoyment can be attributed to these factors. But I’ll definitely consider the company’s claims seriously.

If you tell me I should patronize your business because you have the best, most committed employees, give me some proof points to back up your claim. Do you have a more intensive screening process for job candidates? Do your employees receive atypical levels of training and education to enhance their performance? Are they paid higher than the industry average? Is your employee turnover rate significantly better than that of other companies in your industry?

In the public relations field, some agencies differentiate themselves by promoting the fact that staff members are required to have earned the APR (Accredited in Public Relations) designation, which involves passing a fairly extensive oral and written examination. There are many outstanding PR professionals who don’t have an APR, but requiring it for professional employees is an option for creating differentiation.

Following are a few options brands have used to create a distinct identity. Consider whether any of these hold potential for your business. 

Product Quality. Many companies try to differentiate themselves by claiming superior quality. It can work, but it’s not easy when the competitive bar is high. Ask yourself: in what way are our products better? What evidence can we offer to support such claims?

Among your best options is to secure third-party validation. Such validation can come from actual customers, for example through online reviews on sites such as Yelp. Being touted by recognized experts (think Consumer Reports or JD Power) can provide powerful evidence of quality, as can stories (not advertisements!) in respected newspapers, magazines and websites. Perhaps you operate in the field that has awards for recognizing companies or products that demonstrate noteworthy quality.

Also, remember that quality may be defined differently by different people. Apple developed an enormously powerful brand by making its products appealing to regular consumers rather than engineers or computer aficionados (“the computer for the rest of us”). The company also distinguished itself by focusing intensely on superior design, and has remained one of the world’s most value brands by continually innovating and introducing not only new products, but new product categories.

Service. Service is another area where companies seek to differentiate themselves. But before declaiming about your superior service, consider what that means to your customers: Does it entail being the fastest provider? The most dependable?The most friendly or attentive?The most consistent? Do you offer customized or personalized service?

Businesses today are increasingly focused on evaluating their customer experience. Begin by asking yourself how your customers might define a good customer experience. One way to assess this is to consider various ways your customers might have a bad experience. Be objective, and put yourself in their shoes. Then ask yourself how easy it is it to do business with you? If a customer experience problems, how easy is it for them to get those problems resolved? Is it fairly simple to reach someone who can help them, or do they get lost in “voice mail hell” when they try to contact you? To you force them to complete various forms before they can have their concerns addressed?

One company that has gained an excellent reputation for making it easy to do business with it is Zappos, the online shoe retailer. The company pioneered the process of buying shoes much faster and easier than was common in the footwear industry. However, it faced a significant challenge: people were used trying on shoes at a store in order to ensure proper fit and comfort, and many would hesitate to risk buying (potentially ill-fitting) shoes over the internet. Zappo’s solution: allow consumers to return shoes they purchased for a full refund, no questions asked. Moreover, theyoffered to pay for shipping the returned shoes…and to cover the cost of shipping a new pair to the consumer. They thus overcame that natural fear, maintained their differentiation and succeeded in an entirely new market segment.

In my next post I’ll share a few more ideas you might consider for differentiating your business.

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