Ten steps to effective differentiation

	Andy Beaupre Beaupre & Co Public Relations abeaupre@beaupre.com

Andy Beaupre, Beaupre & Co Public Relations

One of the concepts I always remembered from Geoffrey Moore’s (author of Crossing The Chasm) seminar is the notion of unique differentiation. He said a true “position” for a high-tech company isn’t the one you’d like your company to have, but rather the position it actually occupies within a system you did not create.

In other words, positioning and differentiation isn’t an exercise in myopic navel gazing. It must be externally driven and take into account the strengths and weaknesses of your real competition while also focusing on needed customer value. Only by understanding and acknowledging what’s really out there – and what’s needed - can you set your company apart.

To create true differentiation, a company must go from the outside-in:

Identify real buyers – Begin the differentiation process by understanding your company’s real buyers. Don’t focus on big picture targets (e.g. “this Fortune 500 company”), but rather the specific individuals within those entities who will buy your products or services. Understand who they are and all the ways your company relates to the buyer’s decision-making process chain.

Determine purchase drivers – Meet with, interview or survey existing customers or prospective buyers of your company’s products and/or services to understand what they want and why. Rank “must haves” by importance. Capture enough perspective so you can make accurate interpretations.

Understand customer value – Customer value is the difference between the benefits customers realize minus the cost to buy, use and maintain your product or service. Differentiation is successful when the value perceived by the buyer exceeds the cost of usage. For example, if someone buys speech recognition software with a higher price tag and more features, but it takes much longer to reap the benefits, then this competitive “uniqueness” may not be valued highly enough by the customer, thus eroding differentiation.

Analyze your competition – Differentiation isn’t about “making up” your difference, it’s finding what objectively sets your company apart. Read industry analyst reports and published competitive roundup articles to determine which particular companies “own” various leadership attributes within your market category. Also analyze competitive Web sites to capture their strategic messaging, leadership claims and customer testimonial insight. If other companies claim superiority in an area you believe your company has uniqueness and value, drill down further to separate truth from hype.

Don’t forget sustainability – Short-term differentiation is rarely ideal. Differentiation should take into account leadership erosion, imitation and competitive leap forwards. While you can’t plan against disruptive technologies, you can proactively assess what currently exists and factor-in competitive incrementalism.

Evaluate core competencies – After you’ve obtained this invaluable external insight, take an inward look and identify your company’s core competencies. Most reliable product? Easiest to use? Most scaleable? Hands-down best service? Remember, to successfully differentiate, a core competency must be competitively unique but also be perceived by customers as valued uniqueness. Matrix your core competencies into the competitive and customer-driven insight you acquired.

Focus on “the one thing” – As you zero-in on a core competency force your company to articulate this point of differentiation in a “one thing” manner. Companies fear standing for one thing because they believe – wrongly – that this will limit their appeal. But it actually works in reverse for one key reason: people “free associate.” For example while Volvo is always positioned first and foremost as a safe car, targeted consumers also regard these vehicles as attractive, competitively priced and innovative. A stubborn insistence on all-inclusiveness actually creates confusion. As Harry Beckwith said (author, Selling the Invisible), “To broaden your appeal, narrow your position.” Stand for one distinctive thing and people will remember your company better.

Fine-tune – If necessary, fine-tune your “one thing” competency to make it more appealing – i.e. valued – by the marketplace. For example, find ways to reduce costs in areas that are unimportant to the buyer. This will improve profitability while reducing the likelihood of competitors attacking from a price position.

Create credibility – Claiming leadership and differentiation – by yourself for yourself - doesn’t cut it. You must supplement this internal view with third-party perspective, viewed by the marketplace as credible and true. Customers and prospects are the best way to differentiate. So are objective (non-paid) direct product comparisons. Industry analyst and luminary perspective can also establish credible forms of persuasion. Get some of these people – especially customers – to step up to the plate and validate your differentiation.

Communicate – Once you’ve built your differentiation, work hard to integrate this messaging platform within every aspect of your company. Your Web site. Sales collateral. Advertising. PR boilerplate. Presentations. Trade show booths, etc. Create brand awareness through consistent messaging across all communication vehicles. Great messaging is simple, pervasive, memorable and consistent.

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