Differentiation Matters

Everyone has “customers” whether you work in sales or not. Everyone does marketing, at a minimum for themselves to get job offers and professional or social recognition.  So here’s something that applies to you whether you own a business or not.

There is an old truism in marketing:

— The first company to offer a product bears the brunt of the costs for creating the market for that product

— The second company reaps the profits

— The third company captures crumbs from the first two

— The fourth company loses money

The underlying truth is that if you are doing the same thing that others are doing, and nothing different, then you end up competing on price — and that’s a hard strategy with an iffy future. If what you do is a “commodity” and you’re competing on price, well, there’s always going to be someone cheaper. If you can’t keep reducing your costs, eventually you get squeezed out. It’s just a matter of time. (The social analog is the person who is constantly buying lunch for “friends.” That’s expensive and it doesn’t make for solid relationships.)

Think about the cases you know:

(a)  SEO consultants: How many companies do this?  The TopSEO.com list has 100 companies, and there are myriad others across the globe. I get spammed by a couple of new ones every week. Why pick one over another?

(b) Plumbers: How do you pick one licensed plumber over another? Sure you can ask your neighbor who they used, but how much does your neighbor know about plumbers?

(c) Dentists: If you had to find a new one, how would you pick?

(d) Car mechanics?

(e) Insurance agents?  There’s a reason why there’s a 98% washout rate among first year agents.

Who helps you choose by giving a solid reason why they are better than their peers? By solid, I mean a reason that isn’t completely subjective and means something of value to you. Businesses are better at giving people reasons not to choose them — for example, by not returning calls or missing appointments or providing lousy products or services. Positive differentiation is harder and more profitable.

How do you help your prospects choose? Do you give them a solid reason for going with you?

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