ANALYZING THE DIFFERENCES BETWEEN YOU AND YOUR COMPETITION: The 4th Step to Mastering the Lost Art of Differentiation

Part 4 of 6.5

Author’s note: IndustRetail blog is exploring the Six-and-a-half Steps to Mastering the Lost Art of Differentiation. The first article examined the first step—identifying your key targets. The second article looked at what makes you different. The third explored competitive influences. This is the fourth article in the series.

Competition.png

You aren’t your competition. And vice versa.

Not exactly a news flash—so now what? If you’ve been following this blog –and if you’ve been following my advice—you’ve been doing your homework. You’ve done the whole introspective bit and looked in the mirror. You have a decent self-understanding. Ditto for your competition. Now you have to take all that hard-earned research, distill it, organize it and set it side-by-side.

I’m going give you two methods by which to analyze the information you’ve collected. I’ve used them both. The first is a simple, self-guided method that you can do yourself. The second—and the method I highly recommend—is a team-based exercise that is substantially more analytical.

METHOD 1: BEN FRANKLIN T-DIAGRAM

You can do this on your own with a tool similar to a Ben Franklin Diagram. If you’re not familiar, Franklin would suggest this method for weighing pros and cons in decision making. Likewise, you can use it to identify similarities and differences.

Before you start the process go through your research and highlight key points to make them easier to reference. Or, if you prefer, distill your notes into bullet points or an executive summary. Then, placing them side by side for easy reference, begin your comparison.

Draw a Franklin T-Diagram, listing Similarities on the left and Differences on the right. Sift through your research and candidly categorize your findings. Then weight the importance of each of those factors from 1 to 10, as all factors are not equally important. The totals of the weighted numbers on each side of the diagram will give you a rough idea of how differentiated your business is. If the left-hand column is higher, you’re not differentiated, if the right-hand column is higher, you are.

If your business is a distributorship—and if you are being completely honest with yourself*— my guess is that your comparison will be heavily weighted to the left-hand side of the sheet. Not to worry. There will be some differences. We can work with those!

*You can’t be completely honest with yourself. You just can’t. If I’m being honest with myself, I’m not even sure why I put the T-Diagram option in as an option. It’s fraught with disaster because we’re biased creatures. The T-Diagram is a great way to peek at preliminary results, but don’t rely on it. If you value your business, you’ll do the hard research I’ve prescribed in my previous posts. And, if you value that research you’ve worked so hard to gather, you’ll keep reading.

If you’re heavily invested in the process of differentiation, (pardon me while I wipe the tear from my eye) Ben’s T-Diagram is not robust enough for you. You need to involve more people from the far reaches of your organization, after all you engaged them in your competitive research. (Right?)

METHOD 2: K-J ANALYSIS

If that’s you, you may want to consider performing a variant of a K-J Analysis or Affinity Diagram Exercise. This is a group decision-making process that allows individuals to collectively review data, often much of it subjective. This process will give your team a quick way to objectively review the information you collected, organize it, prioritize it and determine the most important aspects of your competitive differences.

I would encourage you to explore how to run an effective K-J Analysis on your own*, but here’s a simple run-down on how to apply the process:

MATERIALS: Research note copies, Post-It Notes (2 different colors), pens, whiteboard or flip chart, marker.
ROOM: Schedule a minimum of 2 hours in a large conference room with lots of blank walls.

post it notes.jpg
  1. Form a cross-functional team of people throughout your organization who command respect and have meaningful insights. I’d recommend no more than 8-10 and invite them to a 3-hour meeting.
  2. Distribute all of your research notes to all meeting participants.
  3. Ask them to review all research notes in detail and write facts from the research on the Post-It Notes, one fact per note.
  4. When everyone has read through all the research notes and written their facts on Post-It Notes, ask them to them to put the Post-It Notes on the wall in random order. Leave 2 walls empty.
  5. Give the group time to review all the notes.
  6. Instruct the group to begin grouping similar items on the empty walls. “Take two items that seem like they belong together and put them next to one another on an empty wall. Then feel free to create other groups and add to them. Continue to add and rearrange until they make sense. Every item has to be in a group, but there may be a few groups with only one or two items. But please—no discussion.” (Discussion at this point can be counterproductive, as group members can sway one another…we’ll build in discussion in at a later point, when bias can be removed.)
  7. Now break out the second color of Post-It notes. Ask everyone to remain silent and review the groups with the objective of assigning names to them. Have everyone write their name idea on the Post-It Note s them to assign names to each group of Post-It Notes. “Now I want you to take a few minutes and read through each group again, then write down a name or a title for the group and post it above the group with new Post-It Notes I just gave you. As you review the groups, you may come to the conclusion that the group really has two themes. Feel free to separate the groups if you see fit. Likewise, upon further review, you may see two separate groups have the same theme. In those instances, it’s okay to combine them. Give every group a name. Again—NO TALKING!” Then, as the facilitator, based on the group’s input, assign each group a name for the next phase.
  8. Next, vote on the relative importance of the groups. Again—no talking during this exercise. First, have each participant grab some scratch paper and write down the names of the three most important groups. If they struggle, suggest they write down five and then cross off two.
  9. Once the participants have written down their top three choices, ask them to rank order them from most-important, to least-important on that same piece of scratch paper.
  10. Then, once they have rank ordered their groups individually, ask them to record their choices on the category listings on the walls. Let’s assume you used blue Post-It Notes to assign category names. Tell them to go to the blue Post-It that best represents the #1 most important category and put three Xs on it. Then go to the 2nd-most important category and place two Xs on it. And, lastly, place one X on the 3rd-most important category. Again…no discussion.
  11. Now tally the votes for each category and rank order them. If there are ties or very close scores—you may want to discuss combining categories. Now is the time for discussion. This will be your chance to probe and ask questions of the group.

If you follow this process, it’s a great way to quickly and objectively sift through lots of subjective data and organize it in an objective manner. It filters out individual bias and any political influences that may exist in the organization. And when you include a representational or cross-functional team in the process, an added benefit is the organizational buy-in the process automatically creates!

*If you want help with your K-J Analysis, from organization to facilitation, I’m happy to consult with you.

WHAT’S NEXT?

So, dust off that research you worked so hard to collect and begin your analysis. Work hard to understand what separates you from your key competitors and exploit those differences!

But what if there’s not much that differentiates you, you say?

Oh…you actually went there.

Gulp.

Actually, I wouldn’t really be all that surprised. Like I said earlier, it’s not uncommon in the industrial world, especially among distributors. Think about it. Distributors, by nature, sell pretty much the same things. Your customers ask you to do the same things logistically. So, it shouldn’t come as a surprise that you’re not all that different…

On the surface.

The fact remains that you are different. You have different personalities and priorities. You have different processes and procedures. Different points of view and price points. There is still a unique mix of things that makes you you and different than anyone else you compete with.

The trick is understanding what those things are and identifying why your customers value them. If the processes I outlined above didn’t identify key points of differentiation, I’d ask you to consider a few possibilities:

  • Was your research really thoughtful, objective and thorough? If was rushed or contrived, it will lead to a muddled analysis.
  • Were your research notes clear and concise? If not, see above.

If your research was flawed, your analysis will be equally flawed. In fact, if your research was flawed, don’t waste your time on the analysis. (As a fresher, read this, if you’re in a hurry, skip to the section, SO…WHAT’S YOUR RIVET?)

So, let’s assume your research was thoughtful, detailed and altogether satisfactory. Your K-J Analysis was successful—and maybe even fun. You now have a thoroughly analyzed and agreed-upon list of differentiators for your business.

Chew on them. Refine them. Package them. Figure out how to best present them in a way to make them uniquely yours and test them with your best customers. Get their feedback on your ideas and tweak them further before you roll them out for public consumption.

Remember, your brand is a living, breathing thing. It evolves. As you learn more about your customers, your competition and your markets, your brand must change to meet their changing requirements. This is an iterative process. Keep your finger on the pulse to ensure a healthy heartbeat. But I digress. After all, that's the subject of our next IndustRetail blog post.

Until then, here's hoping that your differentiating efforts are putting you at the head of the pack!

 

UP NEXT: MAKE SURE IT’S VALUABLE

 

Tim Rasmussen
Principal
Rivet|MRO

 
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IDENTIFYING WHAT MAKES YOUR COMPETITION DIFFERENT: The 3rd Step to Mastering the Lost Art of Differentiation

Part 3 of 6.5

Author’s note: IndustRetail blog is exploring the Six-and-a-half Steps to Mastering the Lost Art of Differentiation. The first article examined the first step—identifying your key targets. The second article looked at what makes you different. This is the third article in the series.

 

It’s possibly the simplest, most straightforward step in the process of differentiating your business. But it’s the step most businesses tend to make the most difficult. I'm not sure why, but this seems to apply doubly to MRO businesses.

And I don't think it’s laziness. It might be false security, accepting conventional wisdom as actual wisdom. Perhaps the process is simply too intimidating for some of us. Maybe we’re afraid of the answers we’ll find when we explore what makes our competitors different and better? There’s a perverse comfort some find when their heads are buried in the sand. (Or maybe somewhere else?)

And your competitors thank you for it every day your head remains firmly entrenched there.

But now’s the time, if you haven’t already, to pull your head out. Dust the sand from your eyes and see the landscape for what it is. Your competitors are worthy. They’re good—really good.

But they’re far from perfect—and you have the ability to discern critical points of differentiation and exploit them to your benefit. It’s not too late.

Or, worse yet, they may be an absolute train wreck and you’ve been losing out on incredible opportunities to steal business and win market share because you didn’t have the discipline to pursue the answers you needed to pursue. Again, it’s not too late.

Regardless of your situation, the good news is, unless they’re a national player, your competition probably hasn’t gone through this exercise either. (And, if they’re a national player, you have a LOT to position against!)

Before you start this process, it begs the question, who is your key competition? You probably have tons of competitors. But think of it this way; if I gave you a magic wand and you could make substantial inroads against just two or three other companies (or to prevent just two or three of them from making inroads on your business), which ones would you chose?

Start there.

What is it about them that keeps you up at night? What do they do well that causes them to win business head-to-head against you?

Conversely, what is it about them that causes you to salivate when you learn they’re your key competition on a big piece of business? What do they do poorly that causes them to lose business head-to-head against you?

Having the courage to ask these questions honestly is paramount. Without a candid self-understanding and an unbiased view of your key competition, you cannot effectively differentiate your business. Rather than working from conjecture, rumor, conventional wisdom and just plain wishing it were so, work from facts. Here’s how to get them.

Clip and save this quick list of competitive research techniques and use them regularly to gain an increasingly more robust understanding of your key competitors:

  • Read their website: Yes—they may be serving up much of what you’re looking for on their website. If they know why they are good, they should be telling that story. (As should you. Don’t avoid sharing your value proposition online because you think you’re aiding and abetting your competition. If your value proposition is unique and meaningful, it should also be difficult to replicate.)
  • Social Media: Same thing goes for competitive social media. Follow them on Facebook, Twitter, LinkedIn, etc. Make a regular point of reading their posts.
  • Google Alerts: Register your competitors for Google Alerts to get updated on new search results. It may be the perfect tip off for a new product, new hire, new location, etc.
  • Online Reviews: Look at Google, Yelp, Facebook, Glassdoor and others. Online customer reviews can be golden.
  • Sales Literature: Ask your sales team to gather competitive sales literature. You may even want to put bounties out on it to give them the incentive to keep an eye out.
  • Ask Your Customers: Talk to your customers who have dealt with your competitors. Ask them about their experience. Better yet, ask them to compare their experiences.
  • Ask Your Sales Team: They have a pulse on the customer—and they’re dying to tell you what they’re hearing. Just ask them.
  • Perform Win/Loss Audits: When you win or lose business, spend some time with the customer learning the reasons why. Ask them for candid feedback.
  • Do Formal Surveys: Use online tools like SurveyMonkey to gather feedback.
  • Hire Professionals: The art of gathering unbiased feedback is tricky and complicated. If you’re truly committed to differentiating your business and see big financial rewards associated with it, make this investment. Hire professionals who understand how to gather actionable information the right way. This is an exceedingly small cost compared to the eventual reward.
  • 3rd Party Resources: Buy company reports from D&B Hoovers or a similar service.

Once you’ve gathered this data, it’s time to analyze the differences between you and the competition—and time to identify your unique strengths and prepare to exploit them!

But that’s our next blog post.

Until then, be undaunted. Be fearless in asking questions about yourselves and your competitors. Pull your heads out…of the sand. Look in the mirror, then at the horizon.

It’s the easiest hard thing you’ll ever do. And vice versa. Either way, it will be worth it.

 

UP NEXT: ANALYZING THE DIFFERENCES BETWEEN YOU AND YOUR COMPETITION

 

Tim Rasmussen
Principal
Rivet|MRO

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IDENTIFYING WHAT MAKES YOU DIFFERENT: The 2nd Step to Mastering the Lost Art of Differentiation

Rivet(s) always make(s) things better!

Rivet(s) always make(s) things better!

(part 2 of 6.5)

 

Author’s note: IndustRetail blog is exploring the Six-and-a-half Steps to Mastering the Lost Art of Differentiation. The first article examined the first step—identifying your key targets. This is the second article in the series.

***********

Most don’t realize that Levi’s® weren’t the first blue jeans. In fact, blue denim trousers were very common when the first pair of Levi’s was sold in 1873. But Levi’s were dramatically different than any other denim pants because they were reinforced by…you guessed it…rivets.

(Sadly, Rivet|MRO can take no credit here.)

According to the Levi Strauss & Co. website, Latvian immigrant Jacob Davis pioneered rivets while working as a tailor in Reno, Nevada in 1871. Davis had originally used rivets on horse blankets, and he found they worked well for re-enforcing the stress point in men’s work pants..

Since Davis did not have the money required to patent the technique of using rivets, he reached out to Levi Strauss to see if he was interested in applying with him. In 1873, the pair received a patent for “improvement in fastening pocket-openings.”

These rugged new pants immediately became popular as work pants and have been a staple of a casual fashion since the 1950s. Last year, Levi Strauss & Co. generated more than $4.5 billion in revenue…all because of rivet, I mean, rivets.

Strauss knew he had something different and valuable—and he had the luxury of a clamoring public telling him that every day with both their mouths and their wallets.

So...what’s your rivet?

If you had 60 seconds to tell a large customer why your brand is better than your biggest competitor, what would you say? And, just as important, why would you have confidence in saying it?

Let’s face it…most industrial distributors would give similar answers. “We have great service.” “We fulfill 95% of all orders within 24 hours.” Same goes for many manufacturers. (You distributors out there are painfully aware of this, aren’t you?)

In order to truly differentiate your brand, you must be intentional. Invest time in talking with your customers—your very best customers. Ask them why they buy from you. You may have a good idea why, but assume nothing—the insights are invaluable.

They said the Titanic would never sink. It did just that on its maiden voyage. 1,503 people died because they assumed they didn't need the life boats.

They said the Titanic would never sink. It did just that on its maiden voyage. 1,503 people died because they assumed they didn't need the life boats.

And the downside of poor assumptions can be catastrophic. (See: Titanic, “Not even God himself could sink this ship.”)

I remember asking a client years ago why his customers bought from him. He was certain it was because of his staff’s expertise. To his credit, he commissioned a customer research study. His customers told him something decidedly different. They bought—overwhelmingly—because he carried everything they needed. And when they needed a part, the needed it now.

Interestingly, his marketing had focused on his staff’s expertise—and he felt like his marketing wasn’t working. When he switched his message to one that promoted his incredible inventory, his sales increased by more than 8% in just a few months.

Here are a few steps you can take to ensure you have an accurate customer pulse

  • Do one-on-one interviews (qualitative research) with your best customers. Ask them broad, open-ended questions like, “We do you do business with us?” and “How are we different and better than our competition?” Don’t bias them with questions like, “Do you buy from us because we have better service.” Then ask tons of follow-up questions like “Why?” and “Tell me more about that.” The more they talk, the more you learn. Avoid the temptation to sell—this is research. And take copious notes.
  • After you’ve completed a dozen or so interviews, look for trends. I find it helpful to write key points from all your interviews on sticky notes and place them on a wall. Cluster notes with similar themes together. Those clusters hold your answers.
  • Draft a preliminary document defining and prioritizing your key point(s) of differentiation.
  • Validate these theories with quantitative research. Use an online survey tool like Survey Monkey and send a brief, thoughtful survey to your customers. Start again with open-ended questions, but narrow the nature of your questions and get specific. Consider asking them to rank order a set of differentiating characteristics relating to your brand. You’ll want to make sure you’re able to write questions in such a way to eliminate bias as much as possible. Consider getting a professional to assist in this process. Here’s a bonus: often times, your customers will perceive this survey as a customer satisfaction survey—and give you credit for caring. (By the way…you should do customer satisfaction surveys…these are not replacements!)
  • Determine if the quantitative survey reinforces the conclusions drawn in the qualitative phase of your research. If they do, you have your answer. If they don’t, you missed something.

One last note: marketing research is a complicated craft that is difficult to perform by novices. Don’t assume (there I go again…) you can pull it off. It may seem easy, but it is often best left to experts. Either way, it’s a critical step you must take before you can effectively differentiate your business.

For manufacturers, I recommend calling Bart Schwartz at Industrial Channel Research. They have a fantastic syndicated survey that provides you with some exceptional insights. (For distributors, I have another recommendation that's equally riveting.)

Until the next time, here’s wishing you much success finding your rivet. It will help you secure your place!

 

Up next: WHAT MAKES YOUR COMPETITION DIFFERENT?

 

Regards,

Tim Rasmussen
Principal, Rivet|MRO

 
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IDENTIFYING YOUR KEY TARGETS: The First Step to Mastering The Lost Art of Differentiation

Fortunately, this might be the most straightforward of the 6.5 steps to mastering the lost art of differentiation. You already have the information you need. You may already know it intuitively--or at least think you do. But relying on hunches can be exceedingly dangerous. If you don’t believe me, Google “Donner Party Shortcut.”

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IndustRetail: Six-and-a-half Steps to Mastering The Lost Art of Differentiation

Differentiation gives your customers a mental hook to remember you by. It helps them decide to buy from you instead of your competition. It is critical to proper strategic positioning.

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Industrial MRO Brand Development Represents Huge Opportunity for Value Creation

Brand investment is second nature to our friends in the B2C world. Consumer companies know they live and die with the value of their brands. But most industrial MRO companies continue to ignore the value of a good brand.

When times get tough, when sales don’t meet expectations—what’s the first budget that gets cut? If you’re company is like most, the answer is probably marketing.

Insert Scooby Doo “Huh?!” sound clip here.

I’ll never understand this. What’s the thinking? “Sales are down, so let’s turn off our customer acquisition engine? We’re not making enough money, so let’s ignore the very activity that drives growth?”

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Falling Out of the Ugly Tree and Hitting Every Distributor Branch on the Way Down

I visit MRO distributor branches more often than most. Some branches reflect vision and a passion for differentiation. But most MRO branches aren’t just plain—they’re just plain ugly. And insulting to their visitors. And dirty. And unorganized. The shelves are bare in many spots. The merchandise isn’t properly faced. (Nor has it been dusted in the last 20 years). The fixtures are a mish-mash. And signage is either non-existent or ham-fisted. (Note: Scrawling “ON SALE” with a lumber crayon on a piece of scratch paper does not constitute competent point-of-sale advertising.)

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IndustRetail?

Industrial products had some the ugliest packaging known to mankind. There was less than no thought put into naming and design--and we liked it! (Or bought it, anyway.) Now industrial products get the same scrutiny as consumer products. And those who understand how to package and present them like retail products are winning the day.

Industrial meets retail...or IndustRetail...is a fact of life now. So how have you met this trend? What are you doing to embrace the retail-ization of industrial products? 

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