I talk with professional services clients every day, and I hear a lot of confusion and anxiety around the concept of differentiation.
Top executives at firms small and large have heard that differentiating their business is important, but many don’t believe they have any competitive levers to pull that will make them stand out. Others have tried out some so-called differentiators in the past but saw no results. They quickly lost faith. Some even say differentiation is a fool’s errand that has little relevance in the services marketplace.
In this post, I want to lay all these concerns to rest and explain how differentiation works, why any firm can benefit from a competitive differentiation strategy and how you can start putting one in place today. I can’t feed you all the answers – after all, every firm offers different talents in different service areas to different markets. So there’s no one size that fits every occasion.
But I can provide an easy-to-understand framework for building a competitive advantage through differentiation. And I can show you how to uncover the insights about your firm that you need to develop a powerful set of differentiators. I’ll describe the playing field, explain the rules and even teach you a few of the finer points of the game. By the end of this piece, you should be sufficiently grounded in the fundamentals to begin taking on the big shots in your field.
So let’s get started and begin with a definition…
What Is Competitive Differentiation?
Competitive differentiation is a process that helps buyers distinguish your firm from similar competitors and give them a compelling reason to select you.
It consists of two components: 1) one or more characteristics of your firm that your key competitors either lack or aren’t talking about, and 2) a strategy to promote these characteristics that will entice prospective clients to buy.
If you read this definition closely, you’ll notice something interesting: I don’t say you need to be radically different from your competitors (though if you are, so much the better!). Rather, you need to find something about your business that you can own and make a distinctive part of your brand. I’ll get into this in more detail a bit later.
I want to point out one other thing. Competitive differentiation is not the same thing as differentiation. There is a school of thought that says it’s enough that a business be different in any way. But my colleagues at Hinge and I don’t buy it. To engage with your clientele, you need to promote differentiators that they care about. Other differences can help, such having as a unique visual identity or a catchy slogan, but these only play a supporting role.
True differentiation takes place in the mind. It happens when a person connects your firm with an idea, when they think to themselves, “Ah! [Your company name here] — they’re the firm that’s known for __________.” If your prospects fill in the blank with something that’s both relevant to their businesses and isn’t associated with your Go to the full article.
Source:: Business 2 Community