Understand What Differentiates your Company in the Market
What differentiates your company in the market? What sets you apart in your customers’ eyes? What do your potential customers think? These competitive differences may be good – but they may not be good. Would it be good if your customers think your company is difficult to do business with? Would you know? What if your customers think that your product has the best quality, but is also the most expensive – should you target potential customers who are only looking for the cheapest price?
Recently, I spoke with a number of marketing executives and they emphasized the importance of customer and market surveys to better understand what differentiates your company in the market place. Often these surveys are eye openers and provide good input for strategic thinking; for example:
- Understanding the positive attributes will help you target the segments and customers that truly appreciate what it is that differentiates your company. It keeps you from wasting time with customers who do not particularly care about certain features or benefits that you provide.
- Understanding the negative factors will help you target what changes need to be made so that your company can gain market share.
- What if your customers do not see any differentiators? Then you need to decide if this is because you do not emphasize your competitive advantage or if you really do not have a competitive advantage. This dilemma often occurs when a market leader lives off of its reputation, rather than continuing to innovate and further differentiate its products and services.
If your company is perceived to be the high quality and high value producer, you should not be spending time with customers that are shopping for the lowest price. While this may seem like it limits your market, it really focuses your sales efforts on the customers that value the characteristics that you bring to the market.
If you find that there are negative perceptions, it is time to do some soul searching. Do the negatives come from a small unattractive segment of the market? Or are these attributes that need to be fixed in order to achieve significant market penetration? One company did a survey and found that they were perceived to be arrogant in the market place. What was behind this remark? When they asked, they found they were difficult to do business with – customers found it hard to work with the company on special promotions and on tailoring the marketing mix to reach the specific end users that were important to a particular customer. The actual reason for the lack of responsiveness had nothing to do with arrogance, but rather resource allocation – with only one marketing person the company was unable to respond to the number of marketing requests that it received and was thus perceived to be unresponsive. By hiring more marketing resources and focusing specific resources on specific customers, the company was able to change its negative differentiator into a positive characteristic.
What should you be doing?
- Do some market research to better understand what differentiates your company in the market – yes, from the customer’s or potential customer’s point of view?
- Once you know the positive attributes, look for market segments and customers that value the attributes that differentiate your company in the market place.
- If you have attributes that do not show up in your survey – is this because they are not valued? Or is it because the customers do not understand the value that you truly provide? Think of ways that you can communicate the true value of your offering.
- If you have some negative differentiators (e.g. difficult to do business with), look at ways you can change the negative impressions.
Market research is a key input to better market understanding. Assess whether or not it is time to do a third party survey to better understand what your market thinks differentiates you in the market. Then use the information in your strategic planning process to help focus the team in the areas that require focus, either from a positive or negative aspect of the research.
For a better understanding of how you can use your market research to help your team focus on the high potential areas of your market, you might be interested in signing up for our Strategic Planning Tune-Up book. To download, please click on Tune-up.
Denise Harrison is Executive Vice President and COO of the Center for Simplified Strategic Planning, Inc. She can be reached at firstname.lastname@example.org.
© Copyright 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.