Competitive Differentiators - Think Before You Leap
April 1, 2005

I have been reading a lot about "competitive differentiators", or more plainly, the things that make some companies stand out from their competitors. Most companies seem to know what makes them distinctive, at least compared to their poor-performing competition. These messages are boldly stated on their websites, brochures, business cards, voice messages on "forever" hold, etc. Examples of some of these reasons why customers must change: "Quality." "One-Stop Shopping." "Next Day Delivery." "Broad Product Selection." "Technical Expertise." "Experienced Salespeople." "Locally owned and operated." "Nationally owned." "We understand customer needs."

My concern is that these "competitive differentiators" are really just legends in the minds of the supplier or distributor. Do these "differentiators" really match up with what the customer values? Are they really built on truly understanding customer needs? Can they really be supported by the company, supported by all of the people whose actions "touch" the customer? Are managers asking these questions before jumping into providing solutions that may not really be all that hot in their customer's eyes?

As a former owner of a wholesale distributor, I spent a lot of time, and money, determining what made our company unique, and additional time and money figuring out ways to get the message out to the street. Now that I have been away from my former business for over two years, it has become clear to me that I made a lot of assumptions about what made us different and unique, and also made decisions that created a lot of strategies and associated actions that may not always have been based on what customers truly valued.

Like the murky pond that suddenly becomes clear, some of our strategies and actions were built on an accurate assessment of customer value and buying decision criteria. In other cases, we missed the mark. We thought we understood what our customers valued, when in fact we really weren't looking clearly at the bottom of the pond. We were too impatient to let it settle, and to spend the time asking questions of ourselves and our stakeholders.

My point is this. If you are sitting in a "leadership" chair at your company, you are most likely under a lot of pressure to reinforce strategies that you think match up with your customer's requirements. Further, you may be under pressure to invent new strategies that address changing customer needs. This is good. After all, this economy is difficult, and standing still is not a terrific option.

What is not good is that the pressure to protect and gain market share may force you to make decisions that may seem to be based on your market's values, but may in fact be based only on past experience or sketchy assumptions. Further, you may even run with certain decisions that cost money, or worse, people's time, that are based on vague "return on investment" assumptions, gross margin and sales expectations, increased utilization and leverage of fixed assets, etc, etc, etc.

Suggestion: Before you feel compelled to roll out some brilliant differentiator, test it out with the market and your customers first. You may ask yourself some of the following questions:

1. Have I asked my salespeople what they think of the idea?
2. Have I asked my customers and prospects what they think if the idea?
3. Have I asked my supplier or distributor partners what they think of the idea?
4. Have I asked my salespeople and employees, customers, prospects, supplier or distributor partners and others what they think are the key reasons customers purchase, or don't purchase, products and services from my company?
5. If I were the customer, and saw this new or "improved" differentiator, would I really make a change in sources?
6. If I had to actually "sell" this idea to the street, would I really be able to stand behind it, or am I expecting my reps to make it happen because of their persuasive skills?
7. How much of our resources are going to be impacted by this new initiative, (like the domino effect), and can I look each of my stakeholders and fellow employees in their faces and honestly tell them they're doing it for clear reasons, built on a clear understanding of our customer's decision-making criteria?
8. Have I honestly thought through the idea, and solicited input from various people within my company, in order to make sure I have gained support as well as needed criticism?
9. Am I willing to admit the idea is built on bull, not bedrock?

In closing, I am all for making changes. However, one basic principal needs to be kept in mind. Finding ways to differentiate our companies from competition is necessary, however implementing these changes that we think differentiate us, just for the sake of doing something, can result in a dangerous leap.

Like the murky pond, if you are jumping in before being pretty sure what's below, (nothing is ever 100%, I guess), you may wind up slipping on a rock. Ask some of the questions I suggested above. Your differentiators really may be more than just lucky guesses.