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 in this technique. Line up 10 of almost any type of business and each looks just about like the others. Whether it’s cars or canned goods, restaurants or reality TV shows, they all become a blur.
There are exceptions, of course. George Foreman Grills and Ben & Jerry’s Ice Cream are just two examples. Yet, whether it’s Lexus, Infiniti, Mercedes, or Jaguar, the appeal is based more on what one’s friends or associates drive, or the dealership location, than the brand itself.
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?
Get inside the customer’s head. The Pontiac Vibe was the vehicle nearest the showroom entrance of a Syracuse, N.Y., 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 good gas 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 gas 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, 4/26/05).
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.
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.
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 vehicles’ quality by making enormous improvements in the product and then tacking on a 10-year, 100,000-mile warranty.
Rather than ignoring or debating the issue, Hyundai took action and sent a powerful, unequivocal message to car buyers. Wouldn’t it be nice 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?
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.
Give it a name. In other words, make it yours. One regional dry cleaner 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 LifeSavers, 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 2:00 p.m. 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.
Breathe life into the company. How do you give life to Europe’s biggest bank in the United States? Not an easy task, even with enormous resources. But 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.
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 breakup 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, innovative quality that sets companies 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 make a difference to the customer. The strategies 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, our party is over.John R. Graham is president of Graham Communications, a marketing services and sales consulting firm. He is the author of “The New Magnet Marketing” and “Break the Rules Selling,” writes for a variety of business publications, and speaks on business, marketing, and sales topics for company and association meetings. He is the winner of an APEX Grand Award in writing and the only two-time recipient of the Door & Hardware Institute’s Ryan Award in Business Writing. He can be contacted at 40 Oval Road, Quincy, MA 02170, by phone at (617) 328-0069, by fax at (617) 471-1504, or by e-mail at j_[email protected]. The company’s Web site is grahamcomm.com.