A business benefits by positioning itself in an established business category - potential customers can easily understand its offerings and business model. So today if you say you are offer "outsourced IT services with a global delivery model", everyone immediately knows what you do. Similarly, if you say you are trying to start an "online social network", you have conveyed a lot with just those three words.
On the flip side, by being part of a well-established category, your business ends up herded together with all the other players in that category. A balance is perhaps ideal: one must be different but not scarily different.
Yet far too many small businesses are so busy with their day to day operations that they do not figure out how to position themselves uniquely. It would be good for these companies if their management could spend a day or two to come up with the "one-liner" that expresses their positioning with respect to customer needs and shows how they are (or want to be) different from their competition. This is also the concept of a Unique Selling Proposition or USP, which appears to date from the 1940s. Ideally every employee of the company must know this one-liner USP and understand what it means in terms of his or her job.
So how do you go about choosing a USP for your business? Some questions you may ask yourself are:
1. What is the biggest pain point for my customers, and how are we better than my competitors in solving it?
2. When customers compliment us, what are they complimenting us for?
3. When customers complain about the competition (or when I talk down the competition), what are the chief shortcomings aired?
4. What are our best people good at?
... and so on.
Such a methodical approach is also important beyond the one-liner. Remember, the customer prefers to buy not just from any adequate company, but from a company that is the *best* for her. So when selling to a customer, you may have to:
1. Find out who the competition is,
2. Choose that subset region of requirements where you can realistically argue that you are better than all the competition, and then
3. Try to convince the customer that excellence in this region is very important for her.
For example, if you were Nagarro, an India-centric IT services company, you could possibly define your region of strength as the intersection of a) between 500 and 1000 people in size, AND b) working equally for both software product companies as well as leading corporates. In this smaller niche, Nagarro is probably number 1! Suddenly your job as a Nagarro salesperson is easier - you have a good chance with all those customers for whom this might be an important combination of requirements.
At Proton, we set out to create "Positive responsible professionals". We were well aware that our typical student might not be the best at, for example, hardcore analytics. So we decided to create MBAs who, while being acceptable in other areas, were second to none in positive outlook, taking responsibility and professional conduct. In this smaller region of an employer's search space, we believe that the school can be number 1. And we believe that we can convince employers that for many jobs, this is the most important combination of attributes that they require. As employers ourselves, we know we'd give anything for a positive young man or woman who knows how to take responsibility and knows how to get things done.
I typically end up needing two or three requirements to meaningfully bound the region of excellence in which a small company can credibly claim to be the very best (in the Nagarro example, 1. Size, 2. Diversity of client portfolio). Perhaps a larger, better-known company can make do with just one. And beyond three, I think you start to lose the customer's attention. I find all this quite interesting as an exercise in rhetoric.
Finally, not every attempt at differentiation comes from the heart. Some companies are a little cynical in their attempts at differentiation. They may pick points of difference that are obviously quite irrelevant and yet customers may be quite willing to be taken in by them. I have tried hard to understand this phenomenon - my best guess is that the customers are so happy to be "intellectually" engaged in absorbing or evaluating the claims that they forget to consider whether what is claimed should indeed be important to them!
This morning, I was shaving in my bathroom while outlining this blogpost in my mind, when I noticed that the bottle of hair product on my shelf announced in large font, "NO ALCOHOL!" It is probably a perfect example of misleading differentiation. Why should I as a consumer care if the product contains alcohol or not, especially if I am not meant to drink it? But somehow that confident declaration probably makes some consumers say, "These guys are making such a big deal about this alcohol thing - it must be important." And they presumably reach for their wallets.
It is at points like these, in my opinion, that marketing - somewhat inevitably - goes from being a useful concept for creating variety and innovation in the marketplace and crosses over to the Dark Side!
On the flip side, by being part of a well-established category, your business ends up herded together with all the other players in that category. A balance is perhaps ideal: one must be different but not scarily different.
Yet far too many small businesses are so busy with their day to day operations that they do not figure out how to position themselves uniquely. It would be good for these companies if their management could spend a day or two to come up with the "one-liner" that expresses their positioning with respect to customer needs and shows how they are (or want to be) different from their competition. This is also the concept of a Unique Selling Proposition or USP, which appears to date from the 1940s. Ideally every employee of the company must know this one-liner USP and understand what it means in terms of his or her job.
So how do you go about choosing a USP for your business? Some questions you may ask yourself are:
1. What is the biggest pain point for my customers, and how are we better than my competitors in solving it?
2. When customers compliment us, what are they complimenting us for?
3. When customers complain about the competition (or when I talk down the competition), what are the chief shortcomings aired?
4. What are our best people good at?
... and so on.
Such a methodical approach is also important beyond the one-liner. Remember, the customer prefers to buy not just from any adequate company, but from a company that is the *best* for her. So when selling to a customer, you may have to:
1. Find out who the competition is,
2. Choose that subset region of requirements where you can realistically argue that you are better than all the competition, and then
3. Try to convince the customer that excellence in this region is very important for her.
For example, if you were Nagarro, an India-centric IT services company, you could possibly define your region of strength as the intersection of a) between 500 and 1000 people in size, AND b) working equally for both software product companies as well as leading corporates. In this smaller niche, Nagarro is probably number 1! Suddenly your job as a Nagarro salesperson is easier - you have a good chance with all those customers for whom this might be an important combination of requirements.
At Proton, we set out to create "Positive responsible professionals". We were well aware that our typical student might not be the best at, for example, hardcore analytics. So we decided to create MBAs who, while being acceptable in other areas, were second to none in positive outlook, taking responsibility and professional conduct. In this smaller region of an employer's search space, we believe that the school can be number 1. And we believe that we can convince employers that for many jobs, this is the most important combination of attributes that they require. As employers ourselves, we know we'd give anything for a positive young man or woman who knows how to take responsibility and knows how to get things done.
I typically end up needing two or three requirements to meaningfully bound the region of excellence in which a small company can credibly claim to be the very best (in the Nagarro example, 1. Size, 2. Diversity of client portfolio). Perhaps a larger, better-known company can make do with just one. And beyond three, I think you start to lose the customer's attention. I find all this quite interesting as an exercise in rhetoric.
Finally, not every attempt at differentiation comes from the heart. Some companies are a little cynical in their attempts at differentiation. They may pick points of difference that are obviously quite irrelevant and yet customers may be quite willing to be taken in by them. I have tried hard to understand this phenomenon - my best guess is that the customers are so happy to be "intellectually" engaged in absorbing or evaluating the claims that they forget to consider whether what is claimed should indeed be important to them!
This morning, I was shaving in my bathroom while outlining this blogpost in my mind, when I noticed that the bottle of hair product on my shelf announced in large font, "NO ALCOHOL!" It is probably a perfect example of misleading differentiation. Why should I as a consumer care if the product contains alcohol or not, especially if I am not meant to drink it? But somehow that confident declaration probably makes some consumers say, "These guys are making such a big deal about this alcohol thing - it must be important." And they presumably reach for their wallets.
It is at points like these, in my opinion, that marketing - somewhat inevitably - goes from being a useful concept for creating variety and innovation in the marketplace and crosses over to the Dark Side!
3 comments:
I would see the NO ALCOHOL as a sign to Betty Ford, to not bother to drink it up, as it has nothing in it for her.
:-) That bottle's not _that_ old, seriously.
dr. fuloria, would you agree as a marketer your best friend is a customer who is aware and self-selects ;). when i see 'no alcohol' on a personal hygiene product, i go for it. i suffer from dehydrated skin, and the alcohol in these products is just bad for that.
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