Have you managed to differentiate your business?

Neil Woodward, Board member for the CIM’s London region, considers the question of how to differentiate your business without necessarily changing your product or service. This is the second in Neil’s series of articles on Customer Relationship Management (CRM). You can read the first ‘Are your web communications a big let down?’ right here.

Neil Woodward
BEng MBA MCIM
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Unless your product offering is very highly specialised then it’s likely that you will have many competitors. How do you differentiate your business against these competitors?

In the age of the internet, customers now have the luxury of checking prices against many of your competitors and making a comparison between these businesses. Once the business tries to compete solely on price, it’s likely that a price war will ensue and the company with the lowest overhead will survive, whilst the other companies end up in severe difficulty or unfortunately out of business.

The key to differentiation is multi-faceted; it is about the business attitude towards its customers, how they are valued and the company ethos. Many organisations still seem to believe the old adage “The business would be great without the customers”. This style of thinking prevents excellent customer service and promotes a don’t care attitude towards customers. Instead, the mantra must be: “Without the customers we don’t have a business.”

Customer service is a very undervalued differentiator as it’s hard to measure the cost / benefit. If you provide excellent service that is beyond your customer’s expectation, the business often gets talked about on social media, which is the most powerful endorsement that you can achieve especially in the Business to Consumer (B2C) market. The service needs to be at all levels of the business with the business focused on achieving that service.

I experienced a recent example of this when I purchased a new TV box from my Telco provider, the communication to let me know when it was to be delivered was excellent. The company obviously uses a CRM system with automation providing automated emails keeping the customers informed on delivery.  With a reminder the day before delivery, I arranged to work from home so that I was available. The parcel duly arrived, but the bit of communication they failed to impart was the parcel fitted through the letterbox and there was no need to wait in!

This was a real missed marketing opportunity in using this as a competitive differentiator in that they had designed the product and packaging to fit through a domestic letterbox so there is no need to wait for the parcel.

Every marketer needs to look at all its products and services to understand where the differentiators exist or how the delivery method could be simply changed to aid the customer. Sometimes they seem quite small but they can be real differentiators and provide a real competitive advantage. As in the above example, many products are in overlarge packaging where more dedicated packaging could become a differentiator for the customer if it fitted through a standard letterbox, improve the company green credentials and save cost in the longer term. The key to differentiation is putting yourself in the customer’s position, what would you want from the service?

Once the differentiators have been identified it is imperative these are marketed to the customer so they see extra value from your product offering over the competition. It’s not always about price as the Sales Team always tell you!

In a Business to Business (B2B) environment, the differentiator is through a continued effective dialogue with the customer. This ensures the customer feels important, as feedback they provide is actioned and the service exceeds their expectations. The key back-end system to assist in achieving this is a CRM system as it provides a company-wide repository for quotes, business information and discussions at each touch point with the customer. This wealth of information that is built up over time should be used by marketing and sales teams to understand the customers purchasing habits, why the customer did not take up the last quotation, gain market knowledge etc. and to ensure the level of service met the customer’s expectations.

Customers like to see change in organisations, especially when the service improves without a big hype. There are generally a wealth of issues that an organisation can improve on (for the customer’s benefit) which will improve customer retention and sales, these can be; communication, packaging, quality, customer branding, better stock holding etc. depending upon the company and product portfolio.

It is imperative that the organisations understand where their weaknesses are in the marketing / purchasing cycle. It is accepted that every sale cannot be won, but understanding why a sale was not achieved, significantly helps to understand the customers and the market, which is generally changing all the time.

Following up quotations and sales to verify that a customer’s project was successful is important from a customer and internal perspective, irrespective of where the product/service was purchased. Assessing the customer’s purchasing experience helps identify where marketing opportunities exist and if you are meeting or exceeding these customer expectations.

From within, when you are very close to the products or services, it can be difficult to spot the differentiators you already have or things that can easily be changed to create the differentiation. Often, bringing in a third party can help identify those differentiators and make them happen.

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