What Are Differentiators In Business?

A key differentiator can be defined as the business attribute(s) and/or unique value that clearly separates it from the competition in a particular marketplace. 

A key differentiator should be unique, measurable and defendable.

Differentiation is the process companies use to make a product or service stand out from its competitors in ways that provide unique value to the customer. Differentiation identifies a set of characteristics and benefits that make a product different and better for a target audience.

How to Evaluate a Differentiator

To be successful, a differentiator must meet three important criteria:

It must be true. You can’t simply make it up. It must be important to potential clients. If not, what’s the point? It must be provable. If you can’t demonstrate that it is true, it won’t be believed. How To Determine Core Differentiators

Most companies differentiate themselves by focusing only on their product or service advantages. Why does this approach fall short? You may be missing opportunities to differentiate your business at every customer touch point. Differentiation requires carefully considering the entire customer experience.

Enterprise-Wide Differentiation

Differentiation does not refer solely to the assets you own, like your brand, products and services, or what you say you intend to do in your mission or vision statements. Differentiation involves what you do every day throughout your organization to serve your customers better than the competition.

Successfully differentiated B2B companies consistently develop and promote unique products, services and, most importantly, customer experiences. They focus on creating a sustainable, distinctive enterprise.

Professional services company Accenture combines unique experience and specialized skills across more than 40 industries and all business functions. With the world's largest delivery network, Accenture offers a breadth of capabilities few companies can match. The company uses its ample business and technology acumen to help clients improve performance.

The Related Concepts of Differentiation

Communicating your company’s distinct capabilities can take a couple of forms. Both your unique selling proposition and customer value proposition should highlight how you differ from your competitors. Although related, these concepts have different uses:

• The unique selling proposition (USP) summarizes what sets your company apart from your competitors. Do you offer a specialty, guarantee, unique tool or exclusive methodology? A slogan may or may not contain a USP. Nike’s “Just Do It” may be a memorable slogan, but it describes no unique benefit. However, the FedEx slogan, “When it absolutely, positively has to be there overnight” provides an excellent example of a USP. By differentiating you from your competitors, a strong USP helps drive sales and simplify communications. All audiences will understand the unique capabilities your company delivers.

• The customer value proposition communicates tangible results a customer receives from partnering with you. It expands on the USP by providing the specifics of your capabilities. Whereas a USP highlights what distinguishes your company from competitors, a value proposition conveys the positive outcomes a customer receives. Essential elements of a value proposition include what you do for your customers, how you do it, what challenges you help them overcome, how you help them achieve their goals and how you have positively impacted the performance of similar customers.

Differentiating Your Company From The Competition

Every company needs to create both a USP and a value proposition. Both concepts depend on evaluating what you deliver and the unique benefit it provides to customers. These tips will help you determine your core differentiators:

• Evaluate your competition. Before you can determine your core differentiators, you must understand the strengths and weaknesses of your competitors. Where are they located? What can they do better than your business? Where do they fall short? Do you offer something they do not?

• Map the entire customer experience. Using a cross-functional employee group, identify all the steps a customer takes from awareness of your solution to discontinuing use. Your analysis should address: how customers become aware of their need for what you offer, how they find you, how they make purchase decisions, how they process orders, how they pay for orders, how you deliver and install the product, how the customer uses your solution, what support the customer requires, and what happens when the customer no longer uses your solution.

• Put yourself in your customers’ position. At each touchpoint, what does your customer expect and how do you meet those expectations? If you step back from your daily tasks and view things from your customers’ perspective, you can begin to understand what motivates their buying behavior. What do they place the highest premium on – quality, convenience, reliability, customer service or affordability? What are their pain points? Do they agree with your USP and value proposition?

• List your benefits. What would interest a customer in your company’s solution? To determine what sets you apart, look at several key areas, including your product attributes, customer service, pricing and overall customer experience. You can fine-tune your benefit list by asking some pointed questions: Why should a customer do business with your company instead of with a competitor? What can you offer that a competitor cannot? Can you provide a guarantee no other company can make?

• Avoid overloading your offer. Although you want to identify your unique selling points and value propositions, you cannot stand for everything. When you try to do it all better, you risk confusing customers. If you keep it simple and focus on a few main advantages, you increase the likelihood your customers will understand and believe your message.

• Broadcast your core differentiators to the marketplace. Everyone within your organization, especially the front-line employees, needs to know what makes your company different from competitors. Then, you must expand the reach of your core differentiators to all marketing communications, including your collateral, email campaigns, advertising, websites, social media, events and product packaging.

Successfully creating unique capabilities can determine whether a customer selects your company over another, thus scale-up business brands and company. If you fail to create competitive advantages, you have no choice but to compete solely on price.





Data source: Forbes Agency Council, Investopedia etc