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By October 10, 2011Article

Today we have a surplus of “similar” companies, employing “similar” people, with “similar” backgrounds, coming up with “similar” ideas, producing “similar” things, with “similar” quality, and “similar” pricing!  – Kjell Nordström & Jonas Ridderstråhle, Funky Business (from CSO Insights)

Face facts, in the eyes of prospective buyers, you all look alike. Identical. No change.
Think you have a superior product? Your head of development might swear to it, but chances are to the untrained eye, the buyer cannot see the difference.
Think your product is easier to use than the competitors? In the hands of a skilled demonstrator, every product looks easy. The salesperson with the complex software is undoubtedly superb at making it look simple.

The effect on your business is profound. If you’re identical to others, you certainly cannot command a price premium. Margins shrink and you are stuck in a red ocean.
Companies that offer a differentiated product command a price premium. Think Harley-Davidson motorcycles. They successfully created an image of lifestyle and adventure. Companies that are differentiated exist in a blue ocean – commanding higher margins, and creating new market opportunities. And Harley-Davidson motorcycles are expensive – they command high margins.
Keep in mind that differentiation is all in the mind of the buyer. It must create greater customer satisfaction – better, faster, cheaper (Southwest Airlines) or intangibles such as reliability, quality, service, etc.
Here’s how my company is helping a client differentiate their software offering. We are focusing on customer success, rather than software. For instance, we wrote an article “5 Prerequisites to Complete Before [you buy software].” Have you ever called a salesperson and expressed an interest, only to be told “Slow down, bucko. Read this before you buy and make sure you’re ready.” In all my years, I have never heard this from a salesperson. This is why we do this – for differentiation.
Before you select your strategy, look for strategies that offer the greatest differentiation from competition, are sustainable for the longest time, and are achieved at the lowest cost.
Differentiation is very much a creative, free-form thinking strategy. Get everyone in a room, challenge them, play games and have fun with it. Throw out ideas and talk about them. And when you come up with a brilliant strategy, please let us know how you did.
Jeff Ogden is president of Find New Customers.

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