In today’s consumer world we are all bombarded with choice. Choice of more suppliers, choice of more products, and every one of them promising to provide better service.

It doesn’t have to be January sale time to see that everyone is competing on price as well.

In consumers’ minds this can be a turnoff and cause decision paralysis.
Add to this volatile mix the new threat of disruptive and innovative new business models such as airbnb and Uber and you had better watch out. You may not be in accommodation or taxis but if you’re not yet struggling against serious competition you can be sure you will be faced with similar challenges soon.

Repositioning is the key

The way to beat this challenge is really quite simple, but most businesses just don’t get it.

It serves us well to recall what Peter Drucker, the father of business consulting said years ago.

“The single purpose of a business is to create a customer, and the business enterprise has two—and only these two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.

innovation-marketing“Marketing is the distinguishing, unique function of the business.”

In most businesses, owners and managers spend their time in the day-to-day whereas they should be focused on their marketing differentiation by continually improving, upgrading and innovating their business.

Apple are a classic example because Steve Jobs really understood this concept and he drove the market and everyone else had to follow. Apple did this when they launched and they continue to do this successfully today, growing into one of the world’s largest companies. It’s in their DNA – to succeed into the future you need it in yours too!

“OK” you say, “but we’re different because mine is an everyday consumer business not a leading edge technology company.”

I’m sorry but that’s not an excuse. Look at toothbrushes, one of the most competitive common-or-garden products and simplest examples. Oral-B toothbrushes hadn’t introduced a new toothbrush in the 27 years before Gillette acquired it in 1987. Gillette created a stream of new products and features to create differentiation between Oral-B and Colgate, etc. and enormous growth followed. More importantly they continue to innovate today, not resting on their laurels.

Finding your point of differentiation

What can you do in your business to make you different from competition?

The easiest way is to learn from others so take a while to study successful examples and find role models to inspire you.

Baking and butchery retail is owned by the supermarkets and yet Brumby’s and Lenard’s have continued to grow and sell more expensive products by continually innovating and improving their offer, taking advantage of their flexibility and knowledge of their customer demographic to create distinct market differentiation.

What often happens though, is companies take their eye off their point of difference and either make no changes or try to become everything to everyone. Volvo pioneered the concept of safe cars but they were late with front-wheel drive and four-wheel drive, then moved into sporty convertibles and coupes that don’t look safe.

They took their eye off what has made them different – and went broke!

It is a tangible difference not just fancy names.

Many businesses spend a fortune promoting their slogans, or taglines in a big way but really I ask you, what does “Yes” (Optus) and “See what we mean” (Canon) signify. They are meaningless, and what’s in it for the customer? Unless you are clearly a market leader with claim to being No. 1 don‘t waste your efforts here.

Price is the enemy – your difference needs to be meaningful and attractive.

“Any fool can put on a deal” said advertising guru David Ogilvy, “But takes genius faith and perseverance to create a brand.”

When approaching this exercise it’s worth taking note of a quotation from Jack Trout major market executive and author of bestseller “Differentiate or Die” when he says “A crisis is something not to be wasted – use repositioning to make some changes to take advantage of your competition”

The Next Step – Does It Make Sense.

So you have got some good ideas from your incubator but how do you know they’re going to work? Bring some serious brains and discipline to the fore and I don’t believe you can do better than refer to the five tests of clarity defined by Jack Trout when he explains how General Motors re-birthed after being decimated by the GFC. Jack described how in their case they dramatically reduced the number of brands and models and redefined their consumer as the ones being attracted to the emerging Japanese and European brands, and in doing so rose to once again be a dominant player in the industry. How they did this in the super-competitive automotive market it’s worthy of study.

The 5 Tests of Clarity

  1. The problem when solved will be simple – Such as in the solution with GM above.
  2. Does it make sense? – Can people understand it instantly?
  3. Get it in writing – You must be able to express it simply with a few words. The challenge is to get the storyline on the back of a business card.
  4. Does it explode in people’s minds? – Do they get it easily?
  5. The timing must be right – tell me is everything when it’s too soon or if it’s too late and get a result.

I hope this helps you determine your point of differentiation, set yourself apart from the crowd and attract more loyal customers.

Next month we tell you how to get your message to the market.

And for details of our Franchise Weekend Workshops go to where you can also get your free copy of my book ‘Should I Franchise My Business?’

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