Deciding how to differentiate
Differentiation is a strategic decision, in that it has relatively long-term implications for your business. Certainly you can try some experiments, and you should. But to build sustainable value and a clear perception of that value in the minds of your customers, you need to decide on your differentiation, and perfect it.
The key is to understand the three basics in any business:
- Strengths – the aspects of your product, service, company, channel etc. that are potentially of value to customers, and could be the basis of a differentiation message.
- Competition – the products and services that represent realistic alternatives to your offering
- Customers – the common elements and the differences that make up your customer base.
These are the core elements of something we’ve introduced before: the Marketing Knowledge Base. Once you have decided on your approach to differentiation, you will be able to construct messages that show why customers should choose your offering.
Conclusion
There are many ways to differentiate. We’ve briefly covered just the main ones. You can also consider innovations in your channel, your manufacturing and cost structure, and in partnerships. But those are topics for another article. The key points in the process are these:
- Find some issue that is important to your customers, demonstrably true, and differentiated from your competition.
- Build it into your business process so that it becomes a sustainable advantage both in terms of product creation and customer experience.
- Market it clearly to your target customer – build your campaigns around your key differentiation.
- Go back and look for more ways to differentiate. Repeat as your market grows and changes.
Differentiation is an element of business strategy. Once you understand the entire cycle from product concept through to ultimate disposal, you will be able to develop differentiation in ways that brings value to your business and to your customers.
In our consulting practice we have helped numerous companies achieve differentiation: let us know if we can help you.
| Tim Barnes is the author and publisher of the Strategy and Marketing website at http://www.tim-barnes.com. He is a professional strategist and marketer with over 20 years experience in a wide range of industries, working with clients such as Herman Miller, Knoll, Ford Motor Company, Texas Instruments, Novell and Microsoft. He has developed a range of unique tools for business analysis, market research and strategy development. He can be reached by e-mail via our contact page. |
