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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