You’ve probably heard you need to differentiate your firm. How do you do it and is it actually all that important? Come to think of it, what exactly is brand differentiation? Show
For professional service organizations, differentiation can mean the difference between swimming in a sea of sameness or becoming the go-to leader in your field. Some brands are more comfortable doing things the way they’ve always been done; others say they’re trying to appeal to the largest possible audience. But if you don’t differentiate yourself from the dozens or even hundreds of others out there in your profession, you’ll have a hard time gaining the competitive advantage you seek. Why? Because the buyer needs a reason to choose you over everyone else. Differentiation & Positioning: What They Are, How They DifferMore than a half century after marketer Jack Trout first introduced brand positioning to the world, the concept is more relevant than ever to businesses looking to connect with potential clients. Today’s professional services marketplace is larger, more crowded, and more easily found, with clients and clients having an enormous array of firms to choose from. To appeal to a substantial audience within your professional services segment, you have to find ways to set your firm apart. Differentiation and positioning are about building a unique package of benefits that appeals to your target audience. Positioning and differentiation are complementary approaches with slight differences, particularly with respect to professional services businesses. What is Positioning?Positioning is the place in the market you want your business to hold, especially in the mind’s eye of your target audience. It can be subtle and difficult to detect but can be easier to spot if you look at it from your own position as a consumer. Take cars, for example, where the idea of perception as reality excels. BMW and Mercedes Benz position themselves as luxury vehicles, Tesla sets itself apart as a clean energy alternative, and Kia and Hyundai brand themselves as affordable. What position should your services occupy in your potential client’s mind? How do you want people to think about you? Influencing perception (who you are, how you help, what you can uniquely do for a client) are what positioning is all about. What is Differentiation?Differentiation relates to positioning in the sense you want to attract the same clients your competition attracts. If another professional services firm’s offerings overlap with your target audience, you need to think about how you’ll stand out and be the more attractive option. A common misconception is that being cheaper than the competition is the best way to differentiate yourself. We’ll get into that a little more later, but it’s safe to say that’s usually a good way to end up in a race to the bottom. To understand why most other successful brands don’t seriously under-price their products or service, put yourself in the consumer role again. When you’re in the mood for a soft drink, do you choose Pepsi, Coke, Sprite, or another popular brand? Why do you choose it? Is it for the taste, the level of caffeine, or is something more intangible like the good memories it evokes? These qualities are what differentiate one soft drink from the next. Let’s look at a specific example of Nike’s positioning strategy. Nike provides a commodity item (shoes) to hundreds of millions of people around the world every year. Nike is horizontally positioned. Their position is that they believe in ‘celebrating the high performing athlete in you’ – whether the customer is a real athlete or not, they appeal to that demographic. They back this position up with ‘products that are strong, flexible and lightweight to help you push further and faster than ever before to ‘win’. They just happen to make shoes. Shoes, on the surface, are all much the same. But everyday, thousands of people choose Nike – because Nike embodies that position in their mind. The Differentiation/Positioning ConnectionPositioning and differentiation connect in important ways. It can be confusing, but a good way to look at it is: Positioning is based on the differentiating characteristics or qualities that make your business better than your competition’s in the mind of your target audience. Both concepts are strategic actions and are designed to create a desired position for your business in the market rather than having it be defined by your competitors. The result is your ideal clients have a compelling reason to choose you. To illustrate our positioning and differentiation points in this piece, we’ll use an accounting firm as an example. The concepts covered, though, apply to whichever professional service sector you’re in. What’s a Differentiation Strategy?Here’s a fairly simple way to illustrate a differentiation strategy. A professional service organization such as an accounting firm can have a vertical or horizontal position. What does that mean?
It’s also possible to combine the two. For example, a forensic accountant (horizontal) only works in the construction arena (vertical) or an estate and trust accounting firm (horizontal) only works with individuals bringing in more than a million a year (also horizontal). Planning Your Differentiation StrategyTo get started strategizing how your firm will differentiate itself, look at how you currently handle your business model. Does your segment typically bill by the hour? Is the target audience you want to reach not particularly interested in watching their bill climb with every phone call, email, or other activity? If so, you might want to design a new business model where you charge a retainer and the rest is billed as a percentage of results. Before we move on to the different types of differentiation strategies, let’s recap:
From a marketing perspective this is important, particularly for professional service businesses whose average client might not know specifically what the provider does. Put another way, pretty much everyone knows what an accountant does, but they don’t know the ins and outs of specific services. Your ability to connect with an audience rests on positioning and differentiation. If the way you present yourself and your services relates to people on a one-to-one basis, the more likely it is they’ll feel emotionally connected with your firm and do business with it. Types of Differentiation StrategiesA differentiation strategy is multi-pronged but can generally be condensed into three steps:
Once completed, you must then effectively communicate your chosen position to the market. The right positioning strategy improves your brand’s visibility both online and in the minds of your target audience. There are several approaches you can take and, as we mentioned before, rarely if ever is lowering your price one of them. Here’s what we recommend instead:
Whatever it takes to make your firm stand out—and as long as it offers real value—is what defines a good differentiation strategy. How to Choose a Differentiation StrategyIt often happens you’ll need to choose between two similarly positioned options. That’s where differentiation helps in the decision-making process. For instance, on the surface the odds are good that two accounting firms can meet similar needs of a targeted market segment. The differentiation questions set out above help you drill down to discover why your firm is the one they should choose. What you’re looking to do is lay out qualitative, focused, and innovative qualities that disrupt or change the norm of how people do business with your type of professional service. With product differentiation, it can be easier because manufacturers can come up with special features that set them apart. With professional services, a lot of the work is done on a one-to-one basis to meet a client’s needs, so one good way to differentiate is in how you market and “sell” your services. It’s about providing value before they even become a client. Case in point:
What Makes You So Special?Do you currently have a differentiation strategy? Is it working? How do you know? Here’s a few ways you can assess it:
In the end, differentiating and positioning yourself in a winning way is about looking at your market as a whole. To pull out in front of your competitors, put yourself in the shoes of potential clients, look at what the competition is doing, and devise a list of what you can offer that sets you apart. Not seeing much to set you firm apart from the others? Here’s the deal, if everyone in your line of work or niche is offering the exact same things, no one is positioning or differentiating themselves. If you all have the same service list, if it all seems the same from outside, chances are it is all the same. So even if you think your services are better, the way you market yourself won’t matter if everyone else is doing it the exact same way. Today, most business relationships start online. If a potential client can’t tell from looking at your website how you’re different or if they can only understand your differentiation by speaking to a staff member, then it’s not working. clients today don’t want to spend time “getting to know you” once they’re in your office or on an online consultation. Want to build client satisfaction and loyalty? Give them everything they need to know about you ahead of time. One of the biggest payoffs you’ll realize from this approach is that you’ll know you stand a good chance of retaining the client because they’ve already vetted you. They’re happy because they don’t waste time finding out you can’t offer them what they need and you’re happy because you haven’t spent otherwise productive time on a prospective client who’s not a good fit. One final tip. When defining your differentiators avoid cliché terms and phrases like quality, best results, and skilled communicators. “We’re super professional” is not the right answer to what makes you special! The bottom line: if you can respond “everyone” when asked who you serve, you’re not well-enough positioned in the market. In fact, you’re not positioned at all. It’s time to get to work building a differentiation strategy that improves your business’ visibility and gives you the competitive advantage you deserve. Share Tweet Share SEO Basics: How to Make Your Blog Posts Unique and UsefulFor your blog to be effective, you need to write it well and offer your readers the information they need. But this isn’t enough … Read MorePositioning in Marketing: Where it Fits and Why it MattersWhen a company or brand establishes and maintains a distinctive place for itself and its offerings in the market, it’s said to be well-positioned. … Which is the first thing to be stated in positioning statement?This statement should include 1) the target segment, 2) the brand name, 3) the product/service category or frame of reference in which you are establishing this market position, 4) the key points of differentiation, and 5) the reasons customers should believe the positioning claims.
What should be included in a positioning statement?What are 4 elements of a positioning statement?. Desribes who your target consumer is.. Describes what your product is.. Explains why you do what you do.. Explains how you fill a need in a different way than your competitors.. What is the positioning statement?A positioning statement is an expression of how a given product, service or brand fills a particular consumer need in a way that its competitors don't. Positioning is the process of identifying an appropriate market niche for a product (or service or brand) and getting it established in that area.
What is the most important component of a positioning statement?An effective positioning statement should articulate what differentiates a brand from its competition. Highlight your company's unique qualities and how those qualities help serve your customers, you can even consider a niche marketing strategy.
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