Differentiate your product or die
By John R. Graham
Differentiation has long been a marketing
strategy used to separate one particular company from its
competition. Unfortunately, there has been far more interest
than action.
Line up 10 of almost any type of business
and one looks just about like the other. Whether its cars or
canned goods, restaurants or reality TV shows, they all seem to
become a blur.
There are exceptions, of course. George
Forman Grills and Ben & Jerry’s Ice Cream are just
two examples. Yet, whether it’s Lexus, Infinity, Mercedes
or Jaguar, the appeal is based more on what one’s friends
or associates drive or dealership location.
Differentiation works if it’s based
on what appeals to the customer. At one point, when a
half-dozen minivans all seemed to look alike, Chrysler held an
edge because of its commitment to cup holders.
So, what should you be doing to
differentiate your company from the competition?
1. Get inside the customer’s head.
The Pontiac Vibe was the vehicle nearest
the entrance to the showroom of a Syracuse, NY, Pontiac-GMC
dealership. The windshield was covered with assorted stickers
and posters. To anyone coming into the showroom, it was just
another vehicle on display.
It was also a lost opportunity. With gas
prices driving consumers to more fuel-efficient vehicles, there
was the Vibe, an all-wheel drive, near-SUV vehicle getting 26
mpg in the city and 31 mpg on the highway. Why wasn’t the
dealer dramatizing the Vibe’s performance for customers?
With the windshield cleaned off and large
signs calling attention to the vehicle’s promise of high
mileage, the Vibe sold in two days — after having been on
the floor for weeks.
The difference that differentiates is
inside the customer’s head. Your job is to find it. In
the case of the auto dealer, why not ask, “Is great
mileage important to you?” If it is, head for the Vibe.
Greg Brenneman, who flipped Burger King
from troubled to successful in short order, states the task
clearly, “Focus on giving customers what they want, not
what others think they should have.” (Wall Street
Journal, April 26, 2005).
2. Create a sense of excitement.
Why do hard-working people with modest
incomes and senior citizens with limited financial resources
flock to fancy hotels in Las Vegas or gargantuan casinos? Is it
the shows? The gambling? Perhaps. But chances are it’s
really the excitement.
At the opening of the 2,700-room Wynn Las
Vegas, the owner said, “This is a level of luxury that
has never been reached.” Situated on 117 acres, it comes
complete with a man-made mountain that includes a breath-taking
waterfall, an 18-hole golf course, 22 restaurants, a shopping
mall, as well as Maserati and Ferrari dealerships. It’s
thrilling and exciting, even for a few days. It’s not
just seeing the Taj Mahal. It’s being part of it.
This is the appeal of
“reality” TV shows. The sports industry has
discovered that excitement of the teams isn’t nearly
enough to draw high-paying crowds. As admission prices go up,
so does the entertainment. That’s why it’s easy for
millions of spectators to drop a couple of hundred bucks or
more at a single game.
3. Eliminate doubt.
Doubt is the major hurdle to making a
buying decision. If it’s purchasing a home, “Will
our friends and relatives like it?” If it’s a car,
“What will our friends say?” If it’s a
diamond, “Will she think it’s big
enough?”
Hyundai, the South Korean automaker,
overcame serious doubts about its vehicle quality by making
enormous improvements in the product and then tacking on a
10-year, 100,000 mile warranty.
Rather than either ignoring or debating
the issue, Hyundai took action and stepped up and sent a
powerful, unequivocal message to car buyers.
Wouldn’t it be well if General
Motors and Ford took a similar path? If they believe in the
quality of their vehicles, why not offer the same warranty as
Hyundai and Kia?
4. Create buyer satisfaction.
“Did I look long enough?”
“Will the color printer solve the
problem of getting presentations out fast enough?”
“Was this really a good
investment?”
After-the-fact worries eat away at
customer satisfaction and undermine the possibility of getting
referrals, just as doubt delays buying decisions.
Too many companies act as if their name,
size or years in business are ringing endorsements. Whether
it’s clothing, a cell phone, a car or a vacation, the key
is staying in contact with the customer after the sale. Far too
often, this is when the customer feels abandoned and alone.
Dissatisfaction translates into complaints over minor matters.
Close continued contact not only
reinforces the wisdom of the buying decision, it helps to
create a bond that can minimize possible problems.
5. Give it a name.
In other words, make it yours. One
regional drycleaner personalizes its off-season clothing care
service by calling it Anton’s Closet.
It isn’t just an MP3 player,
it’s an iPod, and it left formidable Sony in the dust.
Almost instantly, the name became generic, such as Life Savers,
Kleenex and Blackberry.
No one wants low-priced iced coffee, but
premium priced lattes sell! The name evokes a feeling of
something special, a minor luxury. And so we spend $3.95 to
pamper ourselves at two in the afternoon. In the same way,
it’s not just a watch; it’s a Rolex.
Names transform the ordinary — the
generic — into the extraordinary. Wedding planners
report that iPods are one of the most popular gifts for members
of a wedding party. Again, not just any MP3 player, but an iPod
— nothing else will do. The name makes the difference.
Give it a name and get the business.
6. Breathe life into the company.
How do you give life to Europe’s
biggest bank in the U.S.? Not an easy task, even with enormous
resources. Yet, this is exactly what has happened with UBS. A
BusinessWeek survey revealed that the “You and Us:
UBS” campaign rocketed UBS into 45th place of the top 100
brands worldwide. As someone noted, “It came out of
nowhere.”
While few people may really know much, if
anything, about UBS, the “You and Us: UBS” campaign
has created a positive and personal feeling. It has brought the
company to life and separated it from the competition.
In the same way, whoever heard of AFLAC
before the adorable duck? What’s more valuable than
having a warm, positive feeling about an insurance company?
That’s differentiation at its best.
7. Practice creative destruction.
New York’s famed landmark hostelry,
The Plaza Hotel, was on life support for years. The cost of
delivering legendary service to the rich and famous became too
costly.
So the Plaza is transformed into condos
for the rich and famous. It’s called creative destruction
and it’s driven by market forces. Rather than lamenting
the loss of a great old hotel, the customers applaud the new
possibilities.
With telecommunications deregulation came
the break up of century old AT&T and the spawning of a
string of Baby Bells. Now, one of the energetic offspring has
acquired the parent. It’s creative destruction at work.
Salespeople talk about how
“hungry” they are, but studies show most spend
little time actually selling or developing new business. Most
reach an income comfort level and simply “maintain
accounts.” Performance indicates that new accounts are
often a low priority. Salespeople are not alone. Creative
destruction applies to people, too.
Business survival, however, demands
different values and different performance standards in every
area of business.
Creative destruction, whether it be
personal performance or the way companies do business,
demonstrates a daring, innovating quality that sets them apart
from the competition and attracts customers.
In a word, what’s dangerous is
staying the same.
It isn’t just smaller companies
that need to learn these seven strategies for differentiation
that makes a difference to the customer. They apply to Fortune
100 firms, too.
GM stayed on course building gas-guzzling
SUVs even when gasoline prices skyrocketed, blinded perhaps by
their even bigger profit margins on these vehicles.
What made Ford think its
“new” Ford 500 sedan was anything special?
What made Buick think the
“new” LaCrosse would attract crowds of new buyers?
Customers have cast their ballots by ignoring the car. Why not?
It may be quiet inside but it looks dull.
What applies to cars, applies to
clothing, kitchens and vacations. If we don’t bring to
the party something that sets us apart from all the other
parties the customer is invited to, the party is over.
John R. Graham is president of Graham
Communications, a marketing services and sales consulting firm.
He is an author of several books, writes for a variety of
publications and speaks at association meetings. He can be
contacted by phone at (617) 328-0069. The company’s web
site is www.grahamcomm.com.