Why do your customers buy from you instead of your competitors?

When asked that same question, research shows that nearly 4,000 CEOs of mid-market companies don’t know the real answer. Some think they do, but most are relying on false information.

And this limits their ability to grow.

In Jaynie Smith’s book Creating Competitive Advantage, only a few of 4,000 CEOs could articulate their true competitive advantage, and the number one response that CEOs gave was “customer service.”

My experience working with more than 200 CEOs of mid-market companies has been the same. Great customer service is not the reason why customers engage with most companies. It may help to keep a customer, but unless the brand is strongly differentiated by service – consciously positioned like Rackspace – it’s rarely a competitive advantage that causes customers to buy from you.

In Differentiate or Die Jack Trout says:

In this global killer economy you have to find a way to differentiate yourself–or have very low prices. Or your brand will die.

Sound harsh?

Some executives I’ve worked with don’t think much about differentiation and truly don’t know how they’re unique, or what competitive advantage they own. Others focus on minor areas of differentiation, such as product or service features, that don’t cause differentiation at the brand level. Some do truly understand how they’re differentiated in the marketplace, and how that creates a competitive advantage. And there are some that don’t think they have any differentiation or competitive advantage.

The irony is that many of them do.

They just haven’t uncovered it.

Differentiation Defined

What determines differentiation? Does differentiation have to be tied to a feature of your product or service?

It can be, but a brand can be differentiated by many other things, such as:

• Leadership
• Heritage
• Specialty
• How it’s made
• An ingredient
• How it’s delivered
• What you believe

Jack Daniels differentiates on heritage – Old No. 7.

Chrysler differentiated itself on the basis of an ingredient – Hemi engines (and “Intel Inside” is another example.)

And think about that last one – what you believe. Amazon’s belief is “To enable freedom of choice.”

Amazon sells a lot of products. But those of us over 40 remember when they were a fledgling online bookseller competing with Borders and Barnes and Noble.

Analysts used to hammer Jeff Bezos demanding that he turn a profit instead of reinvesting into the business, but he stayed true to the company’s beliefs. Now they deliver groceries and just about any other product you need.

Differentiation by Uncovering Your Competitive Advantage

“If you don’t have a competitive advantage, don’t compete.”
– Jack Welch

You have to be able to substantiate what differentiates your brand, but often that resides in the gray area between perception and hard feature differentiation.

Which means you can create it. Or you can “uncover” it. And you can differentiate by using your competitive advantage.

Chip and Dan Heath, in their bestseller Made to Stick, discuss the core elements of what makes messages memorable. Memorable messages can position a brand in one’s mind. And they can create differentiation and a competitive advantage.

“Business managers seem to believe that, once they’ve clocked through a PowerPoint presentation showcasing their conclusions, they’ve successfully communicated their ideas,” Heath writes. “What they’ve done is share data.”

Many professional marketers fall into the same trap. They share information, yet fail to communicate a meaningful idea. Sticky ideas shock, move and convince us. As the Heath brothers say, “If you want your ideas to be stickier, you’ve got to break someone’s guessing machine and then fix it.”

This is a talent that great strategic marketers possess. But it’s something that you can learn too.

Fifty years ago, oligopolies were in charge of the market and could dictate change. That world has largely disappeared, as a result of the global competition and the access to reliable information provided by the web, and the ability of customers to communicate with each other. Now the customer is the effective boss. What they think and share is important.

Think about your brand, and what’s good about it. And what’s great about it. And how you’re unique. Most brands are unique – they just don’t know how to share their uniqueness with the larger audience.

And they’re missing out on a greater opportunity until they are able to effectively articulate it to their market. Simon Sinek said the exact same thing in his daily email yesterday:

Wordsmithing Matters

For many, discovering their competitive advantage boils down to a copywriting exercise. Marketers and business executives always know the strengths of their product or service. But the difficult part is in communicating those strengths in a way that differentiates your brand in the mind of your buyer and creates a competitive advantage.

You don’t have to have a patent or exclusive distribution deal to have a competitive advantage.

Are you communicating your greatest strengths using quantifiable statistics, concrete language, that is not subjective and vague or used by your competitors, language that draws a contrast?

Do you say things like “We have great customer service” or do you say things like “We ship 99% of our orders the same day, 100% complete. That is our promise to you.”

If you communicate what you’re truly great at, or why you’re unique, using the language that impacts our thinking, you can turn a strength into a competitive advantage that differentiates, positions and becomes a pillar of your brand.

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This is content contained in Module 2 – Differentiate of our online strategic marketing course. This module is about analyzing your competition and your own strengths to understand how to differentiate your brand in the mind of your market.