It may seem an obvious question to ask, but it often gets overlooked when we are all busy pushing company operations and looking at bringing in new revenue – what makes your company different?
As part of continuing to progress your #BusinessForTomorrow, Hazlewoods Marketing Manager, Emma Shorrock looks at why it is important to understand what makes your company different and how now could be the perfect time to strategically review where you want to go next.
Essentially, knowing what makes you different and staying true to that can deliver growth or replace lost revenue.
Why do you need to be different?
This is all about competition, every market has competitors and when companies claim they do not then you need to think carefully about whether that is true or wishful thinking. A competitor may not be a like for like product or service but could be a completely different offering that removes the need for your own. This can be market disruption, which often comes from advancements in technology – the downfall of Blockbuster and their delay in entering online streaming being a prime example.
Having a point of differentiation, is giving customers a reason to come to you. For something they cannot get from a competitor. In a congested marketplace this can be harder to source, but not impossible. Having this advantage will give new customers motive to come to you, and existing ones a reason to stay. It puts up a barrier to them moving to a competitor as you are adding something others are not.
How do you make your company different?
Those familiar with strategy may know of Michael Porter, who described the main business strategies in 1985 and, surprisingly with the rate of change we have seen, these have not changed in principle since. In short, you can make yourself different based on price (low, competitive, or high) or you can differentiate through creating a more attractive offering, then marketing that effectively.
To differentiate on low or competitive price, you need strong research into your costs, knowing your break even points and profit margin. This will entail knowing your competitors’ prices and benchmarking or tracking them. This is used by John Lewis in their slogan ‘Never knowingly undersold’, they are competing on price but cleverly they also differentiate on service offering, for example, extended warranties. This is why many choose to shop with them.
To choose differentiation, you need to offer more features, functionality, support, or brand value than your competitors. You are trying to create a higher quality offering and you want them to pay more for that. By getting this right you can charge a premium for your products or services. This all hinges on a well-thought-out marketing strategy to communicate the value proposition to prospective customers. Your customers will always be considering ‘What is in it for me?’ and it is your challenge is to find the premium offer that they are willing to pay the premium price for and consider they have received value for their money. This is often seen in long established luxury brands, such as Harrods, why do people go there and pay more? That is down to their differentiation and brand. You do not have to be a big international brand to achieve it, but you do need a full marketing audit and strategy.
The key to making this approach work is to stay true to your commitment. If competing on low or competitive prices, then you need to make sure they are just that and not higher than others (but do not lose sight of your breakeven point).
If differentiating, you need to execute that, such as offering better customer support then it needs to be markedly improved on competitors. If charging higher prices, you need to resist the ‘flash sales’ or ‘cutting costs’; instead, you need to give your price for a product or service and stick to it. Internally, it would also not be cost cutting but reviewing how to improve your delivery.
Blank piece of paper
This is the perfect topic to strategically review at this time of year, as often over Christmas and New Year we reflect on what we are achieving and where we want to go. Start with a blank piece of paper and write a list – what really makes your business different?
To discuss your list or ideas, then please contact Hazlewoods Marketing Manager, Emma Shorrock, on firstname.lastname@example.org or 01242 680000.
For further insights and advice to support you and your business visit www.hazlewoods.co.uk
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