A cautionary tale of when demand dries up…

We hear (and see) it a lot. Businesses are keen and eager to tell us just how good they are. We’re the best at X, we have a USP of Y, we offer benefit Z…but for many businesses establishing a true point of differentiation is hard. Establishing something unique? Really difficult. The truth is that many products and services have very high levels of homogeneity.

Many businesses succeed, in part, because there’s enough work to go around (demand roughly fits supply). But what happens when demand starts to fall and there’s an oversupply? This dilemma is as true for restaurants and cafes as it is for creative agencies and manufacturing businesses.

Finding a point of differentiation

It won’t surprise you that competitor research is an important first step when we work on a project.

It should also come as no surprise that we look at our competitors regularly to analyse what they’re doing and how they’re doing it. I must have looked at a dozen consultancies recently, reviewing their messaging and their proposition.

As consultants, we – and I include ourselves in this – are all quick to demonstrate our years of experience, our specialist sector knowledge, the brands we’ve worked for and perhaps the awards we’ve won. And there’s good reason for some of this. When making decisions, we all like to use shortcuts to help us navigate the endless information presented to us (plenty of research confirms as much). From judging a book by its cover to judging the merits of an agency or consultancy by its glossy homepage design.

This is fine if the options in a given market are discrete and limited, less so if there are many players who all look, sound and act the same. The latter is more complex and requires some creativity to inspire a point of difference.

Why should we work with you?

It’s a fair question that almost everyone asks us and achieving differentiation and a source of competitive advantage affects marketing consultants in exactly the same way as all other businesses. Take the rise of the term “Fractional CMO” – 5 years ago offering this service was a point of differentiation. Today there are 2,500 Fractional CMOs in the UK alone.

But let’s be clear. This isn’t the same question as why a business might want to work with a marketing consultancy. There are plenty of other good reasons to answer that.

Instead, this strikes directly to why it should be me, or another of the Open Velocity team, that someone chooses to work with.

And there are two words that provide the answer.

Motivation. It’s (almost) everything.

Just like the adage, hire on attitude and not on skills, motivation is the key to a consultant delivering on a project.

There’s little doubt experience helps with strategic work (of any sort). But experience can’t tell you anything about the work a person or team will do tomorrow; only what’s gone before.

Intrigue.

It intrigues us to:

• talk to business owners about their challenges

• to understand a business and to peek behind the curtain

• know if we’re able to help

It’s this intrigue that spurs a sense of purpose. A drive to solve a problem. Bring clarity to the opaque. Achieve focus among uncertainty.

After all, there’s no playbook or template formula. And so every brief brings a different outcome. A process, yes. But a magic silver bullet? No.

Of course, we also have experience in various sectors and we’ve worked for lots of different brands and businesses but all consultancies say this. In fact, you should expect this of a consultant; these are hygiene factors. None of what anyone has done before will guarantee a commitment to tomorrow’s brief. That comes from somewhere else entirely.

This is one of our points of differentiation and we’ll happily talk to you about it.

Finding a source of differentiation (or distinctiveness) in a sea of me too players

So, you look and sound like everyone else. This might be limiting your growth, the size of business you win or mean you’re under selling your product or service (and not earning the revenue your product or service actually warrants).

Being different vs. being distinctive vs. competitive advantage

Let’s be clear. Competitive advantage should be the end goal – allowing you to offer real value to your target audience that’s defendable (not easily copied) and helps justify a price premium over competitors.

There are two ways to achieve this through marketing. By being different and by being distinct. This isn’t a binary choice and marketers and businesses should pursue both.

Being different means that your product, service or brand offers something different to that of your competitors. Brands and businesses develop this in market through careful management of the marketing mix (Price, Promotion, Product and Place). When Uber launched they were hugely disruptive, differentiating on price (cheaper), product (Uber placed very literal control of the experience in the hands of the customer) and place (everything done transparently through the Uber app).

Being distinctive is about standing out from the crowd, being memorable and being recalled by your target market at a moment of need. Take Cadbury’s who have hugely distinctive brand assets such as their purple colour, fonts and two glasses of milk iconography. These are so established in the UK market, and so distinctive that Cadbury ran a “donate your words” campaign to highlight impact of loneliness of older people. They removed all the words from their dairy milk bars and sold more chocolate as a result.

Seeking differentiation? Ask yourself these questions:

1. Analyse the market that you’re in and analyse your own business. And be honest. Brutally honest. Are you actually different from everyone else? [Check out our recent webinar on exactly this topic!]

2. If not, decide on which might be the best strategy. Review your marketing mix. Brand is the most sustainable source of competitive advantage but this takes time to develop (so start early). Can you achieve differentiation elsewhere. If so, would it be defendable or easily copied? Product is the most important of the 4Ps (or 7Ps) but don’t neglect Price, Promotion or Place (distribution). Competitive advantage can be achieved through differentiation of any of the Ps. And the more differentiation you can build into your marketing mix, the more defendable it is likely to be.

3. Check that what you’ve identified as differentiation is valued by your target audience. Not sure how? Ask them.

4. Still struggling? Try to find something, however niche, that only you do. This might not always be what you do, but the type of customer you serve. There are lots of examples; from web design agencies focusing on a single industry (e.g. the building trade) to software specific to the legal profession. These specialisms and areas of focus mean these businesses go from competing with thousands of other businesses to perhaps just a couple. This focus can achieve differentiation.

5. Competitive advantage can sometimes be immediate; when you can command a higher price because of something no one else can. Look at how Tesla has had huge competitive advantage over the past 5-7 years in the electric car market. Sometimes this happens over time, when brand reputation and credibility itself can lead to competitive advantage. An example here would be HubSpot; their software does what a lot of other software program’s do, but their reputation and reliability wins them significant market share.

Can’t differentiate? Seek distinctiveness.

For some industries, differentiation is difficult. Take mobile phones. Any new handset feature that offers a modest point of differentiation is almost immediately copied by all the other models of mobile phone. So, people tend not to buy mobile phones based on features (and this industry is a good example of where Price is a dominant marketing mix lever).

Instead, businesses can thrive on being distinct. Take Cadburys, Coca Cola or O2. You could take the words from the packaging and still recognise that purple, that red and those bubbles. The B2B business CheckaTrade has achieved this with a jingle that everyone in the building trade will likely have heard over the radio hundreds of times in the last 10 years. Compare the Market achieved this with Alexsandr the Meerkat. The list goes on.

Whatever your challenges, and whatever your industry, finding points of differentiation or distinctiveness are a proven way to help compete.

If you want some help in tackling this for your business, drop us a note. If you want to follow us, and hear more of our thoughts, find us on LinkedIn or sign up to our newsletter.