Have your competitors copied your product or service making it difficult for customers to tell the difference? In this video, Susan Hall, Vice President of Business Development and Performance Improvement at Strategic Enhancement Group, shares strategies for differentiation in a hyper-competitive business climate.
Susan Hall: 00:01 Hi. I'm Susan Hall, Vice President - Business Development & Performance Improvement with Strategic Enhancement Group, and in our current hyper-competitive business climate with easy access to unlimited options, we're all looking for ways to differentiate and stand out from our competitors. You may have a superior product, but it's a very short-term advantage in a world where products can be reproduced in a matter of days or even hours. You may have a strong brand, but even this is a short-term differentiator when there are so many me too and knockoff products that can enter the market at a lower price. You may have organizational size and scale, but even this isn't always an advantage against smaller, more nimble companies that don't have the high overhead that larger corporations do.
Susan Hall: 00:57 So, if the traditional approaches to differentiating no longer work, how do you differentiate? Well, first, let's look at how companies compete in the market and how these offerings evolve. There's three types of offerings: generic, expected, and potential. Generic fulfills your client's basic needs. For example, let's say you're traveling and you're looking for a hotel room. The generic offering is that you want a room that's clean, it's safe, and it's well located. It fulfills the basic needs. But, somewhere along the line, some smart hotel owners ask themselves, "Hmm, there are 25 hotels in this area; they're all clean, they're all safe, they're all in a good location. How can I differentiate?" So they get creative and come up with an innovative idea for a potential offering. "Geez, I bet if we served a hot breakfast, guests would like that, and they would come and stay at our property." Or, they do their market research and learn that 20% of customers travel to and from the airport, so, "Hmm, I bet our customers would appreciate a free shuttle to and from the airport."
Susan Hall: 02:06 So, these services differentiate them for a little while, but then what happens? Well, all the other 24 hotels in the area catch on and say, "Hey, we can serve breakfast. We can have an airport shuttle. We can go a step better, and we can serve lattes and omelets for breakfast and limos for shuttles." Now, what was differentiated becomes the expected. The differentiation only lasts for a small amount of time, so with this in mind, how do you add value and sustain differentiation? The way to differentiate is to think beyond your current offerings, features and benefits, and look at the entire process for how your customer shops for, buys, uses, and disposes or moves on from your product or offering.
Susan Hall: 02:59 The idea is that your team does some really specific discovery with your customers and conducts an in-depth analysis of the process your customers go through when they interact with you and similar suppliers. Then, with this information, you can look for those little, tiny tweaks throughout the process that makes the process easier or more efficient for your client, or just a better overall service experience for your customers. Let me share a quick example.
Susan Hall: 03:28 Recently, I was at the grocery store doing some shopping for my dad, and I wanted to get some pasta to make a spaghetti dinner for him. There were all of your standard boxes of spaghetti, and different brands and flavors. They all kind of blended together, but one box stood out on the shelf, and I noticed that instead of the standard size of spaghetti, this box was half the size of the others, and I thought, "This is perfect." My dad doesn't have a pot big enough to make spaghetti, and every time I made him dinner, I would inevitably break the noodles in half, spraying them all over the kitchen floor. So, here was a unique offering based not on how the product tasted, which is how most brands competed, but on how a certain percentage of customers actually cooked their product.
Susan Hall: 04:18 Here's another example. Recently, I coached a client in this whole customer usage process. This particular client exports IT products and were looking to differentiate. They had a very large client in Europe, and when they did their analysis of that client's usage process – how they shop for, buy, use, and dispose of their product – they found out that the client was going through all kinds of extra steps to unload and warehouse their product, causing them extra labor, time, money, and frustration. So, it turned out that the pallets the product was delivered on didn't fit their standard equipment. So, in order to unload their product, they had to break down the pallet, reload it onto their standard-sized pallets, so their equipment was compatible and they could move it around and store it in their warehouse. As soon as my client, the exporter, learned this, they worked with them and quickly came up with a solution to rent an appropriate sized tow motor that the client would then be able to use to manage the pallets more efficiently. In the long term, it was a small investment for a valuable client.
Susan Hall: 05:30 So, by looking at the broader process your customer uses to shop for, buy, use, dispose, or transition your product, you can come up with some really innovative, sustainable ways to differentiate and ensure happier clients over the long term. If you're interested in learning more about how this process can help your team specifically, reach out to us at StrategicEnhancementGroup.com. My colleagues and I at Strategic Enhancement Group love helping our clients discover new ways to innovate, compete, and grow your business.
