How to differentiate
One of the things I learned from Geoffrey Moore’s seminar is the notion of unique differentiation. He said a true “position” isn’t the one you’d like your company to have, but rather the position it actually occupies within a system you didn’t create. 
In other words, positioning and differentiation isn’t an exercise in myopic navel gazing. It’s got to be externally driven and take into account the strengths and weaknesses of your real competition while also focusing on customer value. Understand what’s out there – and what’s needed - to set your organization apart.
To differentiate, go outside-in, and bottom-up:
In other words, positioning and differentiation isn’t an exercise in myopic navel gazing. It’s got to be externally driven and take into account the strengths and weaknesses of your real competition while also focusing on customer value. Understand what’s out there – and what’s needed - to set your organization apart.
To differentiate, go outside-in, and bottom-up:
- Identify real people – Start by finding your organization’s real customers/consumers. Don’t focus on big picture targets (e.g. “this Fortune 500 company”), but rather specific individuals who may buy – and have bought –your products/services.
- Talk to them – Differentiation isn’t about “making up” your company’s difference, it’s finding what objectively sets it apart. Understand what people want and why. If a customer, uncover what their experiences have been. Use social media to query larger samples. Online discussions and chat rooms are an effective way to gather opinions. Capture enough perspective so you can make accurate interpretations.
- Understand customer value – Value is the difference between the benefits consumers realize minus the cost to buy, use and maintain your product or service. Differentiation is successful when the value perceived exceeds the cost of usage. For example, if someone buys a more expensive product with more features, but it takes longer to install and use it, then this competitive “uniqueness” may not be valued highly enough, thus eroding differentiation (and credibility).
- Analyze your competition –Read blogs, troll social nets, and read articles and industry analyst reports to determine which particular companies “own” various strengths and 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 greater uniqueness, then you’ll need to work harder to create stickiness.
- Evaluate core competencies – With external insight in hand, shift inward and identify core competencies. Most reliable? Easiest to use? Superior service? Higher quality? Remember, to successfully differentiate, a core competency has to be competitively unique but also be perceived by consumers as valued uniqueness. Matrix your core competencies into the external insight you acquired.
- Isolate “the one thing” – As you zero-in on a core differentiating competency, force your company to articulate this in a “one thing” manner. Stand for one distinctive thing and people will remember.
- Don’t forget longevity – Short-term differentiation isn’t ideal. Anticipate and discuss things like price erosion, imitation and competitive leaps. While you can’t plan against disruptive technologies, you can proactively assess what currently exists and try to factor-in competitive incrementalism in differentiation claims.
- Fine-tune – If necessary, fine-tune your “one thing” differentiation to make it more appealing. For example, if your solution is more expensive, can you find ways to reduce costs in areas that are unimportant to the buyer? This will improve profitability while reducing the likelihood of competitors gaining ground from a price position.
- Proof points – Claiming leadership and differentiation – by yourself for yourself - doesn’t cut it. You have to supplement this internal view with third-party perspective, viewed by the marketplace as credible and true. Consumers, customers and prospects are the best way to differentiate. So are objective (non-paid) direct comparisons. Get credible sources to step up to the plate and validate your differentiation. Also remember to identify any and all proof points that will credibly back-up your differentiation claims.
- Be bold – To differentiate, you can’t be a wallflower – you have to stand out. Express differentiation in a colorful way so people notice and remember it.
- Communicate – Once you’ve built your differentiation, work hard to integrate this messaging platform across all communication vehicles. Your Web site. SEO. Advertising. Web-news. Presentations. Great messaging is pervasive and consistent.
- Experience is everything – What you say has to be consistent with what you do. If a company claims “best service” but a customer is frustrated dealing with one of their people, then brand position erodes in the mind (and heart) of that consumer. Walk the walk at every touch point.
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