Identifying competitive advantages and allocating resources to exploit them gives a business the competitive edge in a world where customers are spoilt for choice.
This guide will help you to identify your competitive differentiators, create a basic marketing strategy and take advantage of online marketing to increase sales and achieve a sustainable competitive advantage.
Identifying your differentiators
What is a differentiator?
A differentiator is a specific element that sets you apart from the competition. Think of a differentiator as something you “do” rather than “are”. Everyone claims to be reliable, honest, fast and affordable. Rather focus on what makes your business tangibly different.
Differentiators in business and marketing are important because they set your business apart in a sea of sameness. If you aren’t doing anything differently, that’s your very first marketing task.
Use your differentiators effectively in marketing
Every successful business has differentiators that make them stand out from the crowd to increase sales and drive business growth. These are things that clearly articulate what makes your business different from the rest.
It could include special things about your product or service, or even your business process, but it needs to be something that will compel customers to buy from you. Differentiators will target the real buying concerns and key frustrations of your customers and state the benefits of using your services.
To be effective, differentiators must be communicated as part of all of your marketing activities and should form the core of your business, permeating every area of the business operations in order to deliver on your promise of differentiation.
Knowing your differentiators will enable you to understand exactly what your customer wants from your products, service and business process. They will also improve the results that you achieve from your marketing strategies because you're forced to highlight the benefits of your product or service, rather than just highlighting the features in all of your marketing activities. They will also give a specific focus to your team and consistency in the way that they deal with customers.
A differentiator can be used when there is something genuinely unique about your product or service something that no other business can offer.
If you can't differentiate your product, you should examine the way that you do business and find better guarantees to offer customers, a better in-store experience, a better level of after sales service, or a better delivery system.
Many companies successfully wrap services around commodity products and differentiate around these services. Say, for example, that you’re in the business of selling PCs, a product which is largely commoditised.
The personal relationship that a salesperson or executive builds with the customer when it comes to after sales service and customer care can provide real differentiation.
A word on branding
In their bookThe 22 Immutable Laws of Brandingmarketing gurus Al and Laura Ries offer some definitive rules about branding. Here are some of the most important ones to consider when marketing your small business:
Law of Publicity
The birth of a brand is achieved with publicity, not advertising. Be the first brand in a new category to generate publicity. The news media wants to talk about what's new, what's first, what's hot -- not what's better.
And the best way to make news is to announce a new category, not a new product. Examples include Rolex, the first expensive watch; Swatch, the first fashion watch; CNN, the first cable news network. A new brand must be capable of generating favourable publicity in the media or it won't have a chance in the marketplace.
Law of the Category
The leading brand should promote the category, not the brand. Increasing market share is not the most useful aspect of branding; it's creating a new category -- starting something totally new.
Creating a new category provides the company with credentials and publicity so the brand can build its distinctiveness and difference. One of the best examples is Apple’s iPad, which created a whole new category – the tablet.
Law of Advertising
Be a brand leader because it's the single most important motivating factor in consumer behaviour. When your product/service is the leader, people think it must be better. If you tell them in your advertising that your product is better, they'll think, “that's what they all say.”
Advertising is a powerful tool to maintain leadership and protection from competition. Once a brand is in a leadership position, it must use advertising to maintain the perception of being a brand leader. Advertising, then, focuses on the category: its goal is to keep a brand in its top position in the category, not to confuse categories. McDonald's When Not clear enough, please elaborate and provide example/s to illustrate (eg. Use stats/surveys to substantiate claims, etc)
Law of the Word
If you want to build a brand, you must focus your efforts on owning a word in the prospects’ mind. A word nobody else owns. Looking for ways to broaden the base, to get into other markets, capture other attributes, is one of the most common branding mistakes.
You can only become generic (Kleenex, Band-Aid, Xerox) by being the first brand to establish the category. To be first in a category, create a new one by narrowing your focus. The most successful brands are those that kept a narrow focus and then expand the category as opposed to expanding the name into other categories.
Vacuum cleaner company Hoover is a great example, with its name becoming a generic term for vacuum cleaners. In industries where there are only a limited amount of players, such as vehicle manufacturing, it’s possible to own a word. Volvo, for example, owns safety. In service industries, in which there are many providers, generic words include achievement, balance, control, influence, performance, respect, tradition, wealth and wisdom,
Law of the Company
There is a difference between the brand and the company. Customers care only about brands, not companies. The company refers to the organisation that markets or produces products or services; brand refers to the image and “personality” a company applies to its products.
In reality, the two can overlap. Famous brands such as Sony, Nike or Shell are also the names of the parent companies. However, a company such as Unilever does not feature as a brand name although it markets many famous brands, including Dove, Handy Andy and Lipton. Apple’s iPod and iPad are also good examples of highly popular brands.