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How To Make Differentiation Pay
If you've been following my recent videos on different approaches to differentiation then by now you should have a stock of ideas for how you can differentiate your business.
Today's video will show you how to make that differentiation pay. It will show you how to analyse your ideas for differentiation to make sure you have one that can turn into more clients at higher fees.
And it will show you the one big thing you need to do to turn your differentiation ideas into something that will impact clients.
Hi, it's Ian here with another five minute marketing tip. I'm back from holiday and we're rounding off our series on differentiation by looking at how you can make differentiation pay. In other words, how you can take all that differentiation in the marketplace and turn it into more clients at higher fees. I'll see you after this break.
Hi, welcome back, so how do you make differentiation pay? Well, there are three things you need to do. The first is, that you've got to make sure that your differentiation is valuable to your clients and potential clients. Obviously it's no good if you're differentiated in a way that they don't value. In the first video, I gave the example of how when I was working with Gemini and then Cap Gemini. We tried to differentiate in terms of having a collaborative experience with our clients and really partnering with them, which was often in stark contrast to what are the other consulting firms were doing: just kind of flying in, telling them what to do and then disappearing.
The problem was while the shop-floor clients we were working with loved that, the chief executives were more concerned with performance and results, which is how Accenture positioned themselves in the marketplace. Their differentiation was much stronger in that respect. In fact, I think we'd have done much better to position ourselves as delivering sustainable results and then backing that up by showing clients that the way we partnered with their team meant they were much more bought into the changes so they would be sustained and we built their skills so they were able to continue to improve, et cetera, et cetera.
Sustainable results is much better positioning for chief executives than just partnering, which is more of a kind of a nice to have for them. You can see that as well in terms of Dominos. Dominos is often an example used as a great example of a USP. One of the clear things that Domino's did was that they identified a unique segment of the market who really valued fast delivery. Their piping hot fresh pizza delivery to your door in thirty minutes or less isn't valuable to everyone, some people want really nice tasting pizza for example. But Domino's found there was a segment of the market and it could have been people watching sports games on TV or busy parents who wanted some food quick for their kids. A segment that really valued the fast deliveries so they focused on that. They found a segment of the market to which their differentiation was valuable. Your differentiation doesn't have to be valuable to everyone, but it has to be valuable to a big enough segment of the market who are willing to pay for it.
Second thing you need to think about is to make sure that your differentiation is sustainable. Again, it's no good if your differentiation can be easily copied by a competitor because then it won't last for long. Now to a certain degree, you can rely on inertia, especially if you're in a smaller business or a local market. Chances are that your competitors won't spot what you're doing, realize it's working and then copy you all that quickly.
Domino's for example, to use them again, it really doesn't take all that much to copy fast delivery of pizzas. All it takes is a car or a motorbike but most of their competitors didn't do it. They didn't spot it early enough and by the time they did, Domino's had established a brand name and a reputation for fast delivery, that then was difficult to copy.
Boston Consulting Group, when they first started up for example, they were really the only strategy consulting firm, the very first ones who combined marketing and finance. Again, it took a while before people were able to catch up with that. But over time they had to come up with a more sustainable way of protecting their market position. So for them they had all their proprietary strategic models. So if you wanted to use the Boston Consulting Group Growth Share Matrix, you're probably best off going to work with Boston Consulting Group. They had their links to Harvard Business School and the professors there. They published regularly and established a reputation through that. They hired the brightest and best from the top business schools so they had the best people. That was much more difficult for people to copy. It took many many years for people to copy them.
You need something similar, you need your differentiation to be based on some kind of internal skills, capabilities, competencies, experience, connections you've got that others will find difficult to reproduce. Look internally and make sure however you're trying to differentiate yourself, it's going to be sustainable because you've got something that delivers that differentiation that others will find difficult to copy. You can't just rely on their inertia forever.
Now if you haven't got that, then what you should be doing is working towards doing it. If you can think of a new great position nobody else is differentiating in that way, but you see that it could be relatively easily copied, then do something to make sure it can't be copied. If you're the only person focusing on a particular market for now, then do research into that market. Find out what the customers really need. Do publications, write for that market so you establish a market position as being an expert and have all those publications and research that your competitors can't jut easily copy.
Now the final thing you need, and often the most important thing is you have to be able to communicate that differentiation. It's very very easy to overestimate how much your clients understand about you and your business and how you're different. You live in that business every day. Jack Welch used to say you have to repeat the same damn speech too many times because people just don't take in, they're bombarded with so many messages that the chance of your message sinking in the first time, or even the second time, the fourth time, the tenth time, is highly unlikely. Usually it's about the time that you're completely bored with repeating your message that it's actually beginning to sink in for the first time to the people you want to get it across to.
When I say you've got to repeat that message about your differentiation frequently, I don't mean you call people or write to them and tell them how you're different, because they're just not interested in that. It does mean that you have to have it on your website, your business cards, your Linkedin profile, when you introduce yourself, when other people introduce you when you're speaking. Make sure you get that differentiation across.
Probably the best way to get your differentiation across is to live it.
Boston Consulting Group for example, they used to publish their thought leadership regularly, which established that they really did have the smartest people working for them. Dominos took their thirty minute delivery and backed it up with a guarantee, which spoke volumes that they were able to deliver it. They also made sure that the cars, the bikes, and the packaging around the pizzas all had their logos and stuff on it so when you saw them whizzing past, you knew it was Domino's delivering fast.
You need to do the same thing. Content marketing can be really valuable in this respect for any kind of service or information based business or expertise based business because through content marketing, from blogs, through videos, through email, through establishing a platform, like a podcast for example, you can demonstrate your expertise and obviously the expertise you want to demonstrate is the expertise in the area that you're claiming differentiation.
If your differentiation is that you know more about the sales and marketing in the pharmaceutical sector than anyone else then obviously if you're going to do a podcast or a video series, do it about that, don't do it about other topics you're interested in. Focus your content marketing on your area of difference.
That's it for this week, those three areas that are really going to make differentiation pay, make sure it's valuable, make sure it's sustainable and communicate it regularly, frequently, and live it. The final key thing really for me, you've got to put work into it. Making differentiation pay means not just spending fifteen, thirty minutes brainstorming your differentiation, quickly scribbling it down in a kind of corporate mission statement and hoping that's going to work for you. You really have to think about it hard, make sure it will pay and then keep communicating it. That takes time and effort, that's why if you do it, others won't and you'll really stand out.
See you soon.
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