Determining Your Core Differentiators

To operate a profitable business, it's crucial to define your distinct capabilities. Providing something valuable to customers that your competitors don't offer not only increases sales opportunities but also drives higher revenue. Theodore Levitt, a Harvard Business School professor, emphasized in his book "The Marketing Imagination" that "differentiation is one of the most vital strategic and tactical activities in which companies must continually engage."

Many companies mistakenly limit differentiation to their product or service advantages, which falls short of seizing opportunities to differentiate at every customer touchpoint. True differentiation involves meticulously considering the entire customer experience.

Enterprise-Wide Differentiation

Differentiation isn't confined to tangible assets like your brand, products, services, or your mission and vision statements. It extends to the daily actions throughout your organization that enable you to serve your customers better than the competition.

Prominent B2B companies successfully differentiate themselves by consistently developing and promoting unique products, services, and, most crucially, customer experiences. They focus on creating a sustainable, distinctive enterprise.

For instance, Accenture, a professional services company, amalgamates unparalleled expertise and specialized skills spanning over 40 industries and all business functions. Leveraging the world's largest delivery network, Accenture offers a breadth of capabilities that few companies can match. They utilize their substantial business and technology acumen to help clients enhance their performance.

On a smaller scale, Four Quadrants Advisory offers tailored financial planning services specifically designed for dental practices. By offering guidance on both practice and personal finances, the company employs a transparent process to assist dentists in joining the top 1% of earners. Four Quadrants Advisory goes beyond mere numbers; they serve as advocates for the best interests of dentists.

Related Concepts of Differentiation

Communicating your company's unique capabilities can take different forms. Both your unique selling proposition (USP) and customer value proposition should highlight what sets you apart from competitors. While these concepts are related, they serve distinct purposes:

  • The unique selling proposition (USP) succinctly encapsulates what distinguishes your company from competitors. It may encompass specialties, guarantees, unique tools, or exclusive methodologies. While a slogan may or may not incorporate a USP, it is crucial for highlighting what differentiates your company. A robust USP not only drives sales but also simplifies communication. It ensures all audiences understand the distinct capabilities your company provides.
  • The customer value proposition conveys the tangible results a customer can expect from partnering with your company. It delves deeper into the USP by detailing your specific capabilities. While the USP highlights what sets you apart from competitors, the value proposition outlines the positive outcomes a customer gains. Key elements of a value proposition include what your company does for customers, how it does it, how it aids customers in overcoming challenges, how it helps them achieve their goals, and how it has positively impacted the performance of similar customers.

Differentiating Your Company From the Competition

Every company needs to establish both a USP and a value proposition. Both concepts revolve around evaluating what you deliver and the unique benefits it offers to customers. The following tips will help you determine your core differentiators:

  • Assess your competition: Before identifying your core differentiators, it's crucial to comprehend the strengths and weaknesses of your competitors. Where are their strengths? What can they do better than your business? Where do they fall short? Are there areas where your business offers something they do not?
  • Map the entire customer experience: Through a cross-functional team, delineate all the steps a customer takes from recognizing their need for your solution to discontinuing its use. This analysis should cover how customers become aware of their need, discover your company, make purchasing decisions, process orders, handle payments, experience product delivery and installation, use the product, seek support, and handle product discontinuation.
  • View things from your customers' perspective: At each touchpoint, consider what customers expect and how you meet those expectations. By stepping back from your daily tasks and adopting your customers' viewpoint, you can begin to comprehend their buying behavior motivations. What aspects do they prioritize – quality, convenience, reliability, customer service, or affordability? What pain points do they experience? Do they resonate with your USP and value proposition?
  • List your benefits: What aspects of your company's solution would genuinely interest customers? To identify your distinguishing characteristics, evaluate various key areas, including your product attributes, customer service, pricing, and overall customer experience. Fine-tune your benefits list by addressing specific questions: Why should a customer choose your company over a competitor? What unique offerings do you provide that competitors cannot match? Can you offer an exclusive guarantee that no other company can provide?

Ensure your benefit list is specific, defensible, and measurable. You must substantiate your claims and consistently deliver the capabilities you claim to have.

  • Avoid overloading your offer: While it's essential to identify your unique selling points and value propositions, it's important not to try to excel in every aspect. Attempting to be the best in all areas may confuse customers. By keeping it simple and focusing on a few key advantages, you increase the likelihood that your customers will understand and believe your message.
  • Disseminate your core differentiators to the marketplace: It's vital that everyone within your organization, especially front-line employees, understands what sets your company apart from competitors. Subsequently, you must extend the reach of your core differentiators to all marketing communications, encompassing collateral, email campaigns, advertising, websites, social media, events, and product packaging.

The successful creation of unique capabilities can determine whether a customer chooses your company over another. Without establishing competitive advantages, you are left with no alternative but to compete solely on price.

Jeff Hecht

Jeff Hecht

Jeff is the Founder and Managing Director of the Aronson Hecht Agency. He grew up in the advertising industry at his father's' agency. He has over 40 years in sales and marketing experience. Jeff brings that experience to every client and every project we work on.