What is the one thing that makes you different from your competition? Price? Service? Local versus corporate? Corporate versus local? Location? Name recognition?
“Differentiation – the process of distinguishing a product or service from others, to make it more attractive to a particular target market." - If you don’t know, or are not sure, you have the powerful ability to separate yourself and solidify who your customer base is. There are two parts of this initiative:
1) Determining who you want to be.
2) Attracting the target segment you desire to serve.
These go hand-in-hand in creating an effective differentiation.
Before going too far, let’s be clear; not everyone is or should be, your target market. Based on the two factors above, 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. Allstate 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 may be applicable to your firm now – or may be fit a good fit to use in positioning your firm:
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 cater to a target market that can be consumed by expecting the lowest price regardless of what is offered. At the same time, you will miss opportunities to reach families who want higher quality, personalized services and more options.
On the other hand, a funeral home who prides itself on offering higher end products and services can expect to draw those who see the value in such things. As the industry continues to evolve, unique and personal services options are a growing trend.
These two extremes reflect the challenge of higher volume with lower profit versus less volume with higher profits.
2. Technology – Like all industries, technology has changed how business is conducted and how it can enhance a customer’s experience. Fitting in more closely with a firm that caters to higher valued products and services, you have an opportunity to own this area if you position your resources and staff to fulfill these needs.
While technology is designed to make things more efficient, its drawbacks include confusion and higher costs that may need to be passed on to the consumer. On the other hand, technology is a great hook to attract those like and expect new applications and methods – especially in today’s world with online access, smartphone apps and user-friendly systems.
3. Product – As you know, not all caskets and urns are the same. Superior products, wider selection or unique options 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. Like service, there must be a perceived value placed on these products in order for the family to be willing to pay the price you have set. This is where your marketing and sales team can go to work and potentially flourish.
4. Customer Service – Possibly the cornerstone of any successful business, customer service can make or break you. When it comes to frontline or face-to-face engagement with the customer, few things can create a negative impact as this. Each staff member who represents your firm 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. If you were to create a specialized customer service experience unlike anyone else’s, your firm stick out from the crowd and develop a positive reputation.
5. User Experience – Tied closely with customer service, creating a positive experience for the end-user (your family) starts and begins with how you can engage them, whether in person or online. 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 (suits and ties) in your home or a casual approach (golf shirts, khaki pants/skirts), you will determine how you would like the family to react and what to expect.
Every day, we make decisions on where to go or what to buy based on our perceptions and expectations. Here are a couple of everyday scenarios:
I purchased 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 instead of Wal-Mart because: of the selection, the quality, the price was in line with the value, great customer service, conveniently located, I needed to buy other things.
For your community and the families within, they go through this same process when determining which funeral home to consider. What is your reputation (perceived or real)? What services do you offer? Do you have value for your pricing? What other options are available? Through your efforts to define what makes your firm different from your competition, you will help your families make the right decision. And that’s a good thing!