It’s imperative during these competitive times to create the kind of client experience that ensures client loyalty.
When we shop for products or services, we begin an involuntary process of comparison and evaluation. During that process, we look not for similarities among competing options, but for differences. In fact, we crave those differences — because they enable us to narrow our options and make better choices. This leads us to a critical principle:
If a business offers no meaningful difference by which a customer can make a decision, it forces the buyer to consider some other attribute — like price.
When the prospect’s attention moves away from benefits and fixates on the “next best thing,” he or she consciously or unconsciously tags the product or service as a commodity. Suddenly, any discussion about real or perceived value is drowned out by a rational, logical comparison of price. An opportunity is missed — and the implications are profound.
In short, failure to communicate a clear point of difference hurts businesses far beyond the cash register.
The solution is simple, but not easy. To avoid being seen as a commodity, a brand must become something much more daunting. It must be different.
More about Differentiation…
Differentiation is the process and the act of identifying and communicating a brand’s unique value. Businesses that differentiate themselves in the marketplace give prospects meaningful criteria to help them make better decisions. In fact, a brand that is properly differentiated among its competition and positioned in the minds of its constituents will most likely become the only choice. Even better, differentiation can transform an attribute like price into a value-add. Translation: cha-ching.
But differentiation is hard. Sometimes, there’s just not that much difference among competing offerings. Water is water, right? Not exactly — because an innovative brand knows how to make water unique. A company can filter the water, add vitamins, design great packaging and give it a fancy name. Now, that same water can sell for five times more—because it has value. Because it’s unique.
Perhaps the biggest obstacle to differentiation is a little less tangible — though potentially more disturbing. It’s the failure to accept the notion that no one product or service is right for everyone. Unlike commodities, brands must focus on ideal customers — and align themselves with those loyal users at all costs. Businesses that happily serve anyone who walks in the door have no business strategies. Why? Because those businesses are never the right fit for 100 percent of those clients. And the longer they pretend to be “all things to all people,” the more they will be viewed by all people as “nothing special.”
Brands matter to customers only to the extent that they connect with emotional needs and desires. When they do that, customers become emotionally invested in the brand’s success.
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Today’s businesses are dealing with a new economy. No, it’s not about big data, although that has something to do with it. It isn’t about “going green” or leaving a smaller carbon footprint or having more social conscience, although those things might play a key role for some companies too. It doesn’t even have to do with labor and outsourcing and workers’ rights. But – you guessed it – these could all be factors.
So what is this new economy? Well, for businesses, the new currency in town is reputation – it’s about creating competitive advantage by winning on who you are and how you create value, above and beyond just what you sell. At its core, this “reputation economy” has emerged from an environment of increasingly rapid change and complexity, where organizations have less and less control. People can now support or disrupt any organization through an ever-increasing number of new channels, resulting in more stakeholders than ever having a direct impact on business success – and failure. According to our 2013 Annual Reputation Leaders Survey, 79 percent of the 300 business leaders surveyed agreed they were operating in a reputation economy. The problem is that only 20 percent said they were ready to take advantage of it.
Companies have to be concerned about what they sell. Of course they do – your products/services are why your company exists. But whether a company’s selling diapers or donuts, it’s all taking a backseat to how consumers feel, not about the products, but about the companies that sell them.
That makes building a strong, strategic corporate brand more important that ever. Put another way, one of the main reasons “master branded” companies are consistently graded as most valuable is that they are ahead of the curve on creating value from their most valuable intangible asset: reputation.
Choice – customers never had so much so easily – they buy, you don’t sell
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For most companes acting in a customers interest is nearly always going to be econically beneficial for the firm in the long run – even if it costs the firm money in the short term Don Peppers
To the extent that you make things simple for your customers, you create value. You also create a distinct competitive advantage shared by virtually all market leaders.
Do you make things more complicated than they need to be? How easy are you to do business with? Does everyone in your organization have a simple and accurate understanding of what matters most?
Steve Jobs said, “If you can make things simple, you can move mountains.”
Keep it simple. It’s not easy, but it pays off.