“Oh, that’s different!” On Market Differentiation and What to do About
Someone once told me that being different is better than being better.
Let that settle in for a bit. It’s better to be different at what you do than to out-perform others. You want your company to stand out. There are many differentiating features you can choose from, some better than others. Here are some reflections that encourage an offbeat path to do just that.
Price Differentiation--Can it Really Work?
Pricing always comes to mind but it’s tricky. Lowering prices can differentiate your company so long as your competitors are not able to meet or beat your price. The secret is to know how to modify your company-- i.e. what activities to add or take away-- while retaining a low price. And here’s the catch: changes in the company must not make the product more expensive. One example is Southwest’s staff selection strategy within its price differentiation campaign. Southwest encourages staff to bring a “party-like” attitude to the flight and to suggest any fun activity that goes with it, such as playing music or celebrating a passenger’s birthday with a cowboy hat. By hiring staff with a fun mind-set who are also connected to Southwest’s low cost proposition, Southwest has the flexibility to use price differentiation as the governing criteria to evaluate any activity that is proposed. If you choose price differentiation for your company, ask yourself whether you are in a market that is similarly structured and allows you to make price-effective decisions.
Every Point of Contact is an Opportunity to Differentiate
While market differentiation often includes expertise, technology, and customer service, we also suggest paying attention to all points of contact with your customers and differentiating yourself at every point of interaction. For example, you can make the selection process of a product much easier for your customer right from the start. One company that adopted this approach is T-systems, which used a system of beacons and applications in car salesrooms to differentiate a dealership. Consider the buyer’s experience as he or she enters a showroom. We all know it too well. We stroll in, wait to be served, and it’s not too long before we find ourselves staring at a run of the mill car description taped to the windshield. Boring! Instead, what if right when you entered the space, you could download an application and receive information based on where you are in the store? Beacons spread out in the showroom floor collect and analyze data from the application. and indicate time spent in particular areas as well as interests. The data is captured and analyzed. You then receive a specific offer such as a discount code or test drive based on your demonstrated interest. In this way, IOT (Internet of Things) is used to make the selection process easier for the customer.
Customer Experience as a Market Differentiator
Brands that are able to differentiate based on emotional bond with the customer will likely face less churn. How does a company achieve this elusive status? Research will uncover the consumer’s individual and social values as well as his or her aspirations. For example, if you are focusing on giving your consumer a world-class experience, one way to test it out is to see what consumers are saying about it, not just through surveys but on social media. If consumers are using this candid no-holds-barred tool to positively talk about their experience, you are on the right path. The best measure is probably when your customers are bragging about their experience.
We talked before about differentiation during the selection stage using the IOT example. Let’s now move to talk about technology companies i
mproving the post-purchase consumer experience. A while back, the common practice for a company was to send out their product with a pamphlet explaining installation and features. Today, companies engage consumers with videos providing in-depth tutorials and shortcuts. Now think what you could do to take this experience even further.
One Last Thought
If there’s one point we hope to drive home here, it is that the product isn’t the only thing that can make you different. Always Keep in mind that you are actually selling a certain viewpoint people connect to, and that is a value proposition that your competitors will find hard to imitate and compete with.
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