Differentiation Can Guide Your Future
Are you different? If so, how? Is that a good thing? When it comes to business, when you deliberately choose to be different, it’s always a good thing.
“Differentiation – the process of distinguishing a product or service from others, to make it more attractive to a particular target market.”
Using the definition above as a guide, you have the powerful ability to separate yourself and determine your customer base. There are two parts of this initiative: determining who you want to be and attracting the target segment you desire to serve. These go hand-in-hand in creating an effective differentiation.
It bears to keep in mind that, when differentiating, you are choosing to attract a specific target market. At the same time, you are also choosing to not attract another segment. But that’s what you want – spend time, energy and funds focusing on your customers rather than everyone. When one looks at Main Street, USA, rarely do you find a business that attracts every segment of the market whether it be demographically, socio-economically or anything else.
For example, insurance companies all appear to be the same but you’ll see how they differentiate themselves from their competitors through marketing and services. Progressive Insurance caters to the budget conscious through cost-saving plans. All State likes to market to those who may fear ‘Mayhem’ can occur at any time. Farmers Insurance touts how they cover every strange and unusual occurrence of everyday life. In an industry that is rather homogeneous, they each have developed a strategy to differentiate themselves.
Without any strategy associated with differentiation, it can be like a boat lost as sea with no guidance, direction or destination. Before you make the decision to be different consider the goal which should be to address the dual challenges of positively influencing growth through new customers and maintaining a loyalty from one’s current customer base.
When considering differentiation, here are five Market differentiation strategies that can be used by your firm.
Technology – While most businesses have improved their technology, not everyone knows how to use it to enhance a customer’s experience. However, you can own this area if you position your resources and staff to fulfill goal. Convenience and customer friendly access are huge advantages when it comes to staying at in front of the curve of todays’ fast changing technology, especially when it comes to attracting younger family members who are used to online access, smartphone apps and user friendly systems.
Price/Quality – Always remember - there’s only one low price leader. If you choose to compete on price alone, you must be ready for lower profit margin, minimized quality and a target market that can be consumed by expecting the lowest price regardless of what is offered. At the same time, you will not draw the family who wants the higher quality and more personalized services.
On the other hand, a funeral home who touts prestige and personal concierge services can expect to draw those who value such things and are willing to pay the price. However, there may be fewer families willing to pay this and you must be willing to stick to your price point.
These two extremes reflect the challenge of higher volume with lower profit versus less volume with high profits.
Product – Superior products, wider selection or unique products can all set a business apart from another. The key to this is making sure the demand is there or you can create the demand. The mobile phone industry is a great example of how each competes with improved services or features on every phone they introduce – against competitors and even with their own.
Customer service – This may be the cornerstone of any successful business. When it comes to frontline or face-to-face engagement with the customer, few things can create a negative impact as this. See: United Airlines. Each employee who represent your firm (whether on the clock or not) can and does impact your reputation. Putting specific guidelines and accountability in place ensure who you want to be and how your business will be perceived.
User experience – Creating a positive experience for the end-user (your family) starts and begins with how you can engage them. With that said, the combination of all the above strategies will help determine this experience along with your facility, staff attire, and services offered. Whether you choose to provide a more subdued, traditional atmosphere in your home or a casual, ‘positive’ approach, you can steer how you would like your family to react and expect. When working with people, I encourage my staff to put themselves in the customer’s shoes or visualize themselves on the other side of the counter so they have a better understanding of what the customer is thinking and feeling.
Every day, we make buying decisions based on our perceptions and expectations. Here are a couple of every day scenarios:
I got gas at Station A versus Gas Station B because: it was cheaper, on the way to work, cleaner, conveniently located, I know the owner, I needed a snack as well.
I bought my dress shoes at Macy’s versus Wal-Mart because of the selection, the quality, the price is worth it, great customer service, conveniently located, I needed to buy other things.
I could go on and on but you know what I mean. For your community and the families within, they go through that same process when determining which funeral home to consider. Through differentiation you can help them make that decision. And that’s a good thing!
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