How to differentiate yourself


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I have just finished interviewing about 25 top execs running system integrator companies. Some are doing well, some aren’t. But one thing they all had in common: a desire to differentiate themselves, and no clue as to how to do it.

With apologies to Seth Godin, it’s not enough to decide that you’re going to be a purple cow. When you’re selling complex, high-scrutiny, long-relationship technical services, being a purple cow can actually hurt you. No one wants to trust their entire logistics or security system to some strange-looking animal. The strangeness just adds more questions to an already long list of questions. It raises their high anxiety level even higher.

So what is a company to do?

First, don’t decide what you are by gazing intently into the mirror. We never see ourselves - the good or the bad - as our customers see us, anyway. It’s a complete waste of time. We think they hire us for X, when they really hire us for Y, and we barely even think about Y. We take Y for granted, because we’ve always been good at Y, and we assume everybody does Y.

If you interview your customers, however, you will learn that the other guys don’t do Y very well at all, that Y is really important to customers - something I call the “Critical Characteristic” in my upcoming book - and that you do Y pretty darn well. “Y” is why they hired you.

Then, make sure the right people in your company (or associated with your company) do the brainstorming about who you are and what you do. They should be big-picture thinkers, but also very grounded and totally connected to customers. They should not be the super-critical type, or the too-reactive type - those people who base their strategy on the last person they had lunch with or the last technical blog they just read. They should also be aware of what the analysts are saying, but not stuck on what they’re saying. Analysts have the nasty habit of pimping for the companies who pay them the most. They are not necessarily in sync with what real customers want - and are doing.

The meeting shouldn’t be a “creative” meeting. It should be a “logic” meeting.
Lots of diagrams, organizing, and categorizing. Lots of characterization - who is our preferred/best customer? What is most important to them? What are we doing right - now - to meet those needs, and where are we falling short? What would it look like if we were doing everything right? How is the market organized? Who are the players, and who’s rising? Who’s falling?

The most important question:
Where’s the biggest need, and how can we fill it most efficiently, given our core strengths? How do customers describe this need, and how can we best describe our solution as it relates to this need? This is your differentiation.

Once you have defined the best way to differentiate yourself, “writing the copy” is relatively straightforward - and will resonate with your prospective customers. If you have not defined your true value - as perceived by your customers - nothing you write will “work,” no matter how “purple” it is.

Plain old black and white works, if the solution you’re describing is the solution your customer has been seeking.

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Differentiation exercise

A fair number of years ago, I ran a half-day "strengths and weaknesses" meeting at a company that made software tools for developers. As I recall, we had at least 50 different people from all departments in the company, and a big white board where I wrote down whatever the folks in the audience suggested.

First, we listed all the "important" competitors - an interesting exercise all by itself. Then we talked through each competitor and got audience feedback about relative strengths and weaknesses vs. their own company. Naturally, the engineering staff insisted that their own company's technology was the key strength. But the sales guys said that customers felt that their technology was about average - okay, but not super.

After a lot of debating, it turned out that one of the most compelling strengths was the company's *balance sheet*: many of their competitors were thinly capitalized and/or unprofitable, which made customers nervous. The notion that a boring back-office function was a key differentiator shocked everybody at first - especially the CEO - but eventually it made a lot of sense.

The best part of this exercise was the fact that it was an open debate, where everybody got to be heard and a consensus really did emerge. By the end of the day, I think we had a real differentiation strategy worked out.

Of course, that strategy probably didn't survive its first encounter with the outside marketing "experts." But that's another story.

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