Differentiate (#75)

This post is for my global followers who are not focused on eating lots of turkey and watching football today. Happy Thanksgiving to all of my readers in the United States.

Many of you who in the corporate world are familiar with the concept of differentiation. I was not. Differentiation happens when companies provide their customers with something unique, different and distinct from items their competitors offer in the marketplace. Differentiation increases competitive advantage.

As I started out my business, this concept was counterintuitive to me. Don’t I want to appeal to the broadest market possible? However, trying to appeal to all satisfies no one. Dominating a niche is more powerful than trying to be a one-size-fits-all. Differentiating your business was part of the blueprint for standing up a new business (see Post #68 for the blueprint).

There are multiple lists of ways to differentiate. I like these 12 factors to think through the ways to differentiate a business:

1. Price

2. Location

3. People and relationships

4. Customer service

5. Third-party endorsements

6. Process

7. Personality of the business

8. Guarantee of the work

9. Size of the business

10. Age of the business

11. Awards the business has won

12. Core Product

Thinking about how different organizations differentiate themselves is a fun exercise:

• The US Army — the US Army attempts to differentiate itself through its location (a portion forward deployed in Europe, the Middle East, and Asia, as well as the ability to rapidly deploy), people (especially the Non-Commissioned Officer corps), its process (multi-domain battle), and its size (third largest in the world).

• Manufacturing companies approach the problem from another direction. For example, Subaru builds cars that differentiate on price (they provide off-road capability cheaper than comparable SUVs), customer service (dealership and repairs), and core product (reliability and an efficient engine).

• Retail uses a different combination. For instance, Wal-Mart differentiates through price (everyday low prices is their mantra) and location/size (there are 4,756 Wal-Marts in the United States).

• If you are a service business, like a law firm, architect, or business consultant, it all comes down to core product. Some of the other 11 ways to differentiate may bring customers to your front door, but the core product is what makes the sale. I found The Consultant With the Pink Hair by Cal Harrison a great book for thinking through differentiation with a service business.

Stand out from the crowd

If you are thinking about differentiating a small or medium-sized business, here are five questions to ask:

• First, and most importantly, what do your customers want?

• What industry standards are in place? Where can you exceed these standards?

• What is everyone else doing? Where can you do it differently?

• Where can you incrementally improve the business? (We discussed this powerful tool in Post #66 — The Mundanity of Excellence and Post #49 — Great Teams in the Tour de France)

• What can you do better than the competition?

I am still working on differentiating my leadership training with TFCG. Right now I offer the in-person Currahee Mountain Leadership Experience, the virtual Currahee Mountain Leadership Experience, a workshop on Grit, and webinars. I will keep working on my differentiation in 2021.

Go on the offense to use innovative ways to differentiate your organization during the remainder of 2020 and on into 2021.