How to differentiate your business in a competitive landscape
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Transcript of How to differentiate your business in a competitive landscape
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How to differentiate your business in a competitive
landscape
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Value = Price + Quality + Utility + Service
What is Value?
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● Does it do what we need it to do?
● What happens when we need help with it?
● Is it within our budget?
● Is it well made?
How We
Calculate Value in PracticeWhen we compare a Ferrari to a Lamborghini, we assess value in exactly the same way as we do when we compare a Ferrari to a Ford – we just prioritise different value parameters:
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Consider carefully before choosing price as your primary differentiator:
● Can you deliver the necessary quality?
● Will you be able to source the right suppliers over
the long term?
● Can you maintain sustainable profit margins?
Price as a Differentiator
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Turnover is for Vanity,
Profit is for Sanity
Beware: price differentiation is often an unsustainable strategy because you
devalue your product/service and engage in a race to the bottom.
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Focus on price differentiation -> Commoditisation -> Tight margins
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DIFFERENTIATE on quality and you’re more likely to turn customers into brand advocates.
Will your ideal customer pay a PREMIUM for added value?
WHAT DO YOU OFFER that’s better than your competitors (small and large)?
Quality as a Differentiator
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Utility as a DifferentiatorInnovation Adoption Curve
Where do your ideal customers sit on the curve? Are they
first in line for new products or are they late adopters?
Consider product development and marketing strategy
within this context to determine how you add value.
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If there’s already a clear price leader, quality
leader and innovation leader in your space –
deliver a better service.
Service as a Differentiator
Customer Experience Management (CXM) –
when 2 products cost the same, work the same
and perform the same, the company that makes
the customer the happiest wins the sale.
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Value = price + quality + utility + service
Consider how important each factor is to your ideal customer and manage operations, product development customer service accordingly.
Optimise All elements of Value to Differentiate
Your Business