How to Identify and Leverage Your Differentiators

Tip: focusing on pricing alone is a bad idea.

How to Identify and Leverage Your Differentiators

In Business Communication, the first step of your marketing strategy should be to define the voice or persona of the company. In order to achieve at the end of this process a strong brand identity capable of defining your company and its values, it is very important for the business to understand what sets it apart from the competition, and how to leverage these differences.

Differentiators are the main driver of a value proposition and brand identity, because they are the piece of information that is most easily retained by prospective customers: many businesses claim to be leaders in their industry, but the one with facts to prove it will ultimately be the winner, leveraging a real differentiator to appeal to customers. The nature of a differentiator in itself is not particularly important as long as the difference is clearly explained: technical features, customer service, business model, experience and pricing are all potentially valid starting points for the definition of a differentiator.

Some market research on the competition is required in order to verify the validity of what is perceived as a differentiator inside the company; it is recommended to perform what Gartner has defined as the “Competitor Swap Test” to double-check the effectiveness of the messaging concerning the differentiator. This simple test consists of swapping your brand’s name with the competition after the first draft of your message: if the message still rings true, a real differentiator has not yet been identified.

Once your messaging has passed this basic test, the next step consists of matching the right differentiator with the most responsive audience. Typically, a technical feature setting a product apart from the competition will resonate better with a technical audience, project managers will be interested in the details of support and customer service, while the CFO is likely to focus on business model and pricing. Tailoring communication to the audience is particularly important, especially when a certain degree of technical skill is required to be able to fully appreciate the value of a technical differentiator: the risk of a mismatch or “information overload” may well cause a loss of interest from the prospect, if too much effort is required to understand the value proposition.

Finally, a word of caution is necessary about planning to use pricing as a main differentiator. While the cost/value ratio is certainly important when talking business decisions, a brand relying solely on price as a differentiator, or for its value proposition, is vulnerable in terms of reputation and attacks from the competition. Unless the lower pricing is the result of a groundbreaking business model, it is not intrinsically difficult to compete on price: the most valuable differentiator is one that cannot be duplicated (hence the value of patents).

Additionally, competing on price could negatively alter how the value of a solution is perceived: the distinction between price and value requires some reflection and effort. Your product could end up like the world-famous violinist playing in the Washington underground for a social experiment — widely ignored because the context wasn't favorable. On the other hand, when McDonald's disguised its new joint in Milan as a hipster gourmet burger restaurant, only to reveal its true brand at the end of the opening night, it was showered in praise by individuals who would never willingly set foot in a McDonald's.

Finally, if you want to have customers with the means to afford your product, your focus should be on designing a favorable value/cost ratio, rather than pricing alone.The temptation to compete on pricing is strong, but it's basically the Dark Side, for "once you have taken the dark path, forever will it dominate your destiny!"

While finding the perfect differentiator for every individual pitch might require some work, the results are typically rewarding: solving real customer problems in a unique way is an excellent starting point for a well-structured and comprehensive value proposition.

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Fabia Scali-Warner
Fabia Scali-Warner
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Fabia Scali-Warner

Lover of quality content. Writer and Blogger. Author of Sci-Fi novel Julia Dream, now on Amazon http://amzn.to/2s9TUUx 

See all posts by Fabia Scali-Warner