Differentiation Starts with the Customer
Differentiation starts with the customer
Forget differentiating on price or product - quality service is the best and only way to beat your competition.
Business is a battle! It’s a battle for attention. It’s a battle to stand out in a crowded market. More than anything it’s a battle for customers. No customers equals zero income.
Rowdy Mclean
is an international keynote speaker, author and Leadership and Business consultant.
“I have the privilege of speaking to businesses all over the world and it doesn’t matter which continent you are on or which country you are in. There is one and one way only to win this battle in the modern business world,” he says.
According to Mclean, you need to differentiate yourself from the pack. But it’s not that simple.
There are three ways to differentiate, and in most businesses only one way works, says Mclean.
You can differentiate on price, on quality or on service.
Here’s the good, the bad, and the ugly truth behind these strategies, according to Mclean.
Branson went into high margin industries where the service was terrible and provided amazing service at reasonable prices.
Differentiating on price is a losing battle (especially for small business): The idea is that you have a lower price than your competitors and therefore the customers flock to you. Wrong! What happens is you end up in a price war, trying to reduce margins, cut costs and remove overheads. The winner in this game is the business with the deepest pockets.
Just take the large supermarket vs small supermarket wars. The same in hardware. Airlines, hotels or fitness centers. Price is not the place to differentiate your business.
Differentiating on quality can work but rarely does.
The strategy is that you make a product that is so superior to everyone else that customers only come to you for it. It used to work, but in the modern world where designs are copied and duplicated in days and delivered at a quarter of the cost it’s extremely difficult to own that type of positioning. Unless you are Ferrari or Prada or Rolex its best to stay away from that battlefront.
Which leaves us with service. This is the best and only real way to differentiate your business. Richard Branson discovered this strategy decades ago. Branson went into high margin industries (music, soft drinks, airlines, trains) where the service was terrible and provided amazing service at reasonable prices.
Why do businesses fail at service?
It seems simple right - be nice. But not many businesses can do that. Here’s where it goes wrong.
1. You cannot go from woeful to wonderful service in one hit. It takes time to build consistency.
2. Being fancy before you get the fundamentals right won’t work. For example, some hotels take the time to leave chocolates on your pillow when they turn down the covers, or give you a warm cookie when you arrive at reception. But these fancy touches just don’t matter if the bathroom is filthy or the restaurant staff is rude.
Here’s how to do it:
1. Find out what the three critical service factors for your customers are (just ask them). Is it speed of service, cleanliness, staff attitudes, information or something else?
2. Once you know, deliver on these 100% of the time, without fail, without exception, ever.
3. Once you have consistency covered, find ways to surprise and delight. But don’t do it randomly. Have a reason. People want to feel special and they want to know why you think they are special.
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