I had the opportunity to support an investor group’s due diligence team, recently. Considered a pseudo thought-leader in the marketing space, I was brought on to provide a ‘professional outsider’s assessment’ on a business opportunity they were considering an investment in. My assessment included a review of the company’s perceived strengths, weaknesses, areas for growth, challenges, etc. The same materials that were provided to the investor group were shared with me, and, as I happen to l-o-v-e this kind of stuff, I got right to work. I attacked the project by starting with a cursory analysis of the business, similar to that of most strategic marketing planning exercises my agency executes for ‘every’ client and project we take on. (See the 24-Hour Marketing Plan) The approach included accomplishing the following:
- Quickly understand the business and the market potential. Check.
- Identify the business’ benefits in order of priority. Check.
- Realize the target audience, key message, and competitors, including leaders in their market. Check, check, check. And so on…
I stopped mid-review as I was surprised to NOT come across a blatantly obvious key differentiator(s) in this initial research. “Clearly, an investor or even new potential customer looking at a business for the first time is going to look for that and notice the same thing,” I thought. My suspicion started to race… Had the business become too complacent with their positioning to not realize that it was not communicating one? Did the business even know this? And, how could they possibly ask for investment funding if they cannot/do not articulate this clearly with every conversation and marketing/business collateral or communication?
Key Differentiator, Defined
The concept of differentiation dates back to 1933 when Edward Chamberlin proposed the concept in his Theory of Monoplastic Competition. A key differentiator can be defined as the business attribute(s) and/or unique value that clearly separates it from the competition in a particular marketplace. A key differentiator should be unique, measurable and defendable. It should answer the customer-seeking question “Why should I purchase the product or service from you, versus all other alternatives on the market, including purchasing and/or doing nothing?” Your key differentiator is very much the same as your Unique Selling Proposition. However, differentiation can be applied to a specific product, business or position in the market (i.e. market differentiation). A business that exists without a key differentiator is sending the message “Buy from me for no particular reason.” Or “Buy from me, simply because I need the money.” Yikes. That puts the importance of a key differentiator into perspective, especially as it related to my due diligence project (substitute “buy” with “invest in” and there you have it).
A key differentiator should not be too general. For example, all customers expect a good value, fair prices and/or excellent customer service, to name a few. Remember, you bring unique value to your market. You solve a unique problem for your customers. And, you do this better and differently than your competitors—key differentiator!
Developing Your Key Differentiator
Howard Jacobson, in “Your Key Differentiator” gives the following advice (aggregated from other industry gurus) in coming up with your own. He suggests to fill in the blanks or answer the questions that follow:
1. The “You know how…” lead-in (from Terry Dean, internet marketing guru)
Complete the sentences:
You know how to..
Well, what I do is….
2. Answer the key business question:
What do my clients or customers get as a result of what I sell?
3. Fill in the blanks:
We are the only ________ that does _____________ for____________________.
4. Fill in the blank:
I am the only source that people can get _______________ from in my industry.
5. Fill in the problem blank:
I help people who ___________________________ (name the problem).
He goes on to suggest doing some “Key Differentiator (discovery) Homework” as follows:
1. Ask your best customers a few of the following questions (from Debra Valle, regular marketing guru)
- When you approach me for guidance or input, what do you expect to occur?
- What kinds of issues do you count on me to solve for you?
- What would you say is my special gift or talent?
- What would you say to someone else in describing what to expect from me?
- In a word or two, how do you expect to feel following an interaction with me?
- What’s your sense of how I might be excluding potential clients or opportunities?
- Why might someone choose NOT to purchase my product or service?
- What measures could I take to create more opportunities or a stronger identity or image?
By asking these questions, you will learn: What you stand for; Your “promise” in the marketplace; The difference you make; and The value you bring to your chosen audience.
2. Compare your key differentiator to what your customers say about you:
- What do you want to change about your key differentiator to more accurately reflect your business?
- What do you want to change about how you do business to live up to your Unique Selling Proposition?
So You’re Saying You Do NOT Have a Key Differentiator?
In some cases you may quickly think that you don’t have a key differentiator and what you do or the products/services you provide are really not all that different from any of the competitive offerings currently on the market. It is very likely that what makes you and your business special and different is, in fact “You,” your customers and/or your team. In Chandoo’s article “You have No Market Differentiators. Deal with It,” he explains each of these more clearly with:
You are special. Although, there are 6 billion others with similar features as you, no-one can match 100% to what you are. Realizing this is the biggest thing in running a small business. Unlike large companies, which can remain faceless and build a generic brand image, a small business like yours, has better chance of success if you focus on individuals.
Why are you special: No one else in the world has the same story that you have to say. Your passions, your ideas, your values, your sense of humor, your story will remain unique, no matter how many more people flock your industry. Some important areas of your uniqueness,
- Your story
- Your values
- The way you express
- Your sense of humor
- Your passion & knowledge
Never let that go away from your business in the name of growth. Instead, keep your image a core part of what your business is. That is what many successful business have done. Think about Apple (Steve Jobs), Microsoft (Bill Gates), Infosys (Narayana Murthy) etc.
Your Customers: Just like you, your customers too are unique. It may so happen that the same set of people might be customers for someone else too. But the kind of interactions they had with you, the relationship they hold with you and the attention & respect you command from them will be special.
Your Team: This includes your employees, board members, vendors, partners etc. All of them are special, gifted and rare, just like you. And no other company in the world has the same combination and that makes your company special. The real uniqueness is the kind of experience, passion and energy your team brings to the table to make your company a success.
So do you have a key differentiator yet? I’m sure you do. Be sure to write it down. Rehearse it. Share it. Fine tune it. And, then clearly articulate it with each and every thing you do with your business whether that’s selling to existing customers, attracting new ones, talking about what you do at a social party, or even seeking investment funding!
About the Author
Angelo Biasi is General Manager of SMART Marketing Solutions, LLC, a leading full-service integrated marketing company in Florida and New York since 2001. He has helped create and execute marketing plans and integrated marketing solutions for companies such as Playtex, Bic, Rogaine, Tauck, and over 35 colleges and universities, to name a few. Angelo has an MBA in Marketing from the University of Connecticut and teaches Marketing at New York University where he has for over six years. He has been quoted and/or featured in USA Today, Mobile Marketer magazine, Mobile Commerce Daily, Luxury Marketing magazine, BNET TV and Business Currents magazine, to name a few. For more information or to learn more, email him at abiasismartmarketingllccom (abiasismartmarketingllccom) , visit www.smartmarketingllc.com, call him at 239.963.9396 and follow him on Twitter @angbiasi.