I frequently get asked "how can I differentiate my product or service when there are a lot of competitors doing the same things on a similar level?" My initial answer is 'you just answered your own question within the question.' That part about "a lot of competitors doing the same things on a similar level" should clue you in as to exactly how to differentiate yourself--vastly outperform them!
There's only ONE low price leader. Once someone establishes themselves as the low cost provider, that game is over so it's time to focus on differentiating in other areas under your control. It's truly not that difficult, but it requires an ability to step back to reflect objectively and a common sense approach moving forward.
For example: I have worked for two systems integrators within the past five years. They are very similar in their product mixes (both are Nortel Distributors) and their current marketing strategies, but they couldn't be more different in the way they approach the operation of their businesses. For starters, one is an old school distributor (we'll call them Company A) and views things historically (several "glory days" stories pepper the organization) more often than not. They will frequently thump their chest while stating they were one of the original Nortel Distributors in the Southeast and have been doing this for 33 years, their business model works fine, there's no reason to partner with other firms, and so on. Company A believes in soaking the customer for as much profit as they can on the front end in fear that they may never see another dime out of them. Their apparent belief is that if they don't see another dime, they got their piece of the pie so who cares? To them, customer loyalty value is merely a cliché that can't be justified on the income statement. Additionally, they are very old school in their approach to new customer generation. They still rely on cold calling quite heavily, don't view the customer as a potential partner, and are oblivious to the benefits of community involvement to increase word of mouth marketing.
Company A won't capitalize on the benefits of educating their workforce out of fear employees will leave for greener pastures as soon as they achieve an industry certification. Only when the manufacturer implements minimum educational requirements in order to remain licensed does Company A enroll employees into educational programs, and they do the bare minimum to maintain their license. It's no wonder the place has the fears it does--it created them as a result of their own culture based mostly on greed. I rarely question my motivation to leave Company A, but I frequently question my decision to accept the job in the first place even though I learned a lot about what NOT to do in business as a direct result of having worked there. The positives I will say for Company A are: 1) they have some good people working there--just not enough of them (probably because they are cheap and lack long term vision), 2) they have a good manufacturer behind them even if Nortel has had its problems over the years and 3) they have soaked enough customers to keep the doors open for 33 years so they are doing something right even if the underlying motives are a bit skewed.
Side note: I've offered to work with Company A to help them improve things, but they view me as an evil ex-employee whose motives must be misplaced/misguided. Besides, what could an established distributor of 33 years possibly have to learn from little ole me? Never mind improving the business--that's unnecessary!
The other company, Company B, actually listens to their customers, employees, and outsiders to try to improve their business as much as possible. They view the customer more as a partner than a means to pay expenses. Their mantra is to build a third standard deviation company. Company B truly wants the employees to succeed and improve themselves. They realize that the more expertise they have on staff, the more valuable their services become. When people leave, they don't leave scratching their heads as to why they ever spent a day there to begin with, and they don't trash the place to their friends, colleagues or current business associates.
Of the two companies, which do you think someone would be more inclined refer to a friend, colleague or business associate? Which has that word of mouth appeal? Which seems poised to grow? All of these things set one company far apart from the other in spite of providing similar products and services. Much of it starts at the top, too. If you have a dynamic leader guiding your company, you can efficiently seize market opportunities to differentiate yourself regardless of how many competitors do the exact same thing you do today.
Doing something much better and valuing your customers are distinct advantages that will lead you to the winners circle in time.
Roger Bauer is Founder and CEO of SMB Consulting, Inc., a leading small business consulting firm specializing in sales and marketing development. To learn more, point your browser to smbconsultinginc.com
To learn more about this author, visit Roger Bauer's Website.
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Roger Bauer
(Visit Roger's Website)
Roger Bauer is Founder and CEO of SMB
Consulting, Inc., a nationally recognized
small business consulting firm
specializing in sales and marketing
development. Roger also hosts a weekly
marketing radio show featuring some of the
top minds in marketing. To learn more,
point your browser to smbcon
sultinginc.com or
radio.smbconsultinginc.com
His firm is also responsible for producing
The SEO Bible which can teach anyone how
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