Why would a customer want to purchase your
good or service over that of a competitor? How do you set yourself apart from
the competition?
Businesses everywhere are trying to figure
out how to differentiate themselves from their competitors.
This is sometimes called
your Unique Value Proposition (UVP). But for our
purposes in this discussion I will use the term Differentiation.
Product or service differentiation is
a marketing process that showcases the differences between offerings by various businesses.
Differentiation is making a product or service
more attractive by contrasting their unique qualities with the competition.
This is done all of
the time by some of the most successful businesses in the world. They have made
their name by articulating their unique capabilities, and delivering on them.
Perhaps
in your industry, when others are scaling back their products/services you
might see a benefit in expanding yours.
There are plenty of examples of successful
companies and how they differentiated their offering to stand out from the
crowd. After all, you want to lure prospective customers in your door and away
from competitors.
As I’ve said before, you want your unfair share of the
market.
Another reason for
differentiating yourself is to help you avoid competing on price alone.
Think
of your differentiation as your secret ingredient. It's something that's unique
to your business. And it offers a definitive, tangible benefit to your
customer.
Some differentiators
are easy to figure out, while others are harder to come by. Ultimately, the
question becomes – Why me?
Let’s take a look at
some ideas for helping you answer that question.
1. Know the problem
you’re solving. You are
really in business selling your product or service because you are solving a
problem for your customers.
Make sure that the problem you’re trying to solve
is real. Make sure you understand exactly what that problem is.
List the main issues
your potential customers have and create a differentiator to address them.
2. Know your ideal
buyer persona. Having a
great offering is a good thing. But if you’re not marketing it to the people
that need your product you’re wasting marketing dollars. You want to market to the right people with the right message
at the right time.
3. Take a look at
your competition. What do
they offer that you don’t? Is that offering significant? What do you offer that
they don’t? Is their location and advantage for them, or is yours? What is
bringing customers to them?
4. Define your unique value proposition. Maybe
you're the only dentist with a kid’s play area on the premises. Or maybe you’re
a business consultant has experience working with and for Fortune 100
companies.
What is it that you do that others cannot do, or cannot do as well as
you? These are examples of differentiators that might set you apart.
5. Your differentiator(s)
may change. Another
competitor may match one of your differentiators, or may exceed your capability.
You may develop a new one. Don't be afraid to change the message as your
business evolves.
Your customers evolve, you need to be agile as well.
6. Offer a
guarantee. Offer
something to address common customer frustrations. For example, guarantee that
your service delivery technician will show up within 15 minutes of the
scheduled time or provide the first hour of work free.
What you’re trying to do
is build trust with your customers and give them a no-risk opportunity to do
business with you.
7. Be specific. Be as clear as you can on what it is that
you offer that others don’t. Put it out there in big, bold colors and use it as
a differentiator.
8. Never make a
claim you can't deliver on.
Be sure you can deliver what you promise or your differentiator(s) will be
useless. Then, your reputation will suffer, as will your business.
9. Make sure your employees know and deliver on
your differentiator(s). It
does no good to advertise a unique good or service if your employees can’t
follow through for you. Make sure they understand your differentiator(s) and
deliver on them consistently.
10. Build great customer relationships. Every step in the buyer/seller process is a
chance to build and strengthen a great customer relationship. Work on it all
the time and make sure your employees do the same.
Remember, buyers and sellers
with the best relationships will do the most business together.
So, then what? Once
you've established your differentiator(s), reduce it into a few words and then
communicate it at every touch point. This is your elevator pitch!
Use it in your
ads, letterhead, marketing collateral, your website, signage, sales calls, and
beyond. Your differentiators should roll right off of your tongue.
Think of it this way:
what makes you choose one grocery store, dentist or moving company over
another? Chances are it's their success in defining their differentiator and getting
that message to the right marketplace. That’s what you want to do, too.
This should be a good
start to get you thinking about how to make your company stand out from the
competition. Above all, when defining your differentiators, be brutally honest
in your evaluation. I guarantee that your customers will – either directly to
you or by taking their business elsewhere.
For more information about creating your Unique Value Proposition, or to see how The Cobalt Group can help you with any other business or leadership challenges you are facing, Contact us.
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