7 Ways Companies can Differentiate and Stand out from the Competition

Posted by Steve Sandercook on Apr 21, 2020 11:51:36 AM

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In March of 2020 business as we knew it changed, probably forever. The question is, what are we going to do about it? There are several options available; do nothing different, run and hide, or seize this as the opportunity that it is and become better. I recommend the latter. A key to becoming better is to determine how to differentiate your company from your competition.

There are primarily 7 ways to differentiate:

  1. Product Differentiation– Can you use Innovation to design new products or modify existing products? IMEC introduced an Innovation Voucher Program specifically to aid and assist manufacturers in this process.
    • Physical characteristics such as size, weight, power, and efficiency are certainly ways to differentiate
    • User interface
    • Remote diagnostics
    • Design simplification/fewer parts
    • Ease of installation
    • Cost/ease of manufacture
  2. Service Differentiation – How easy is your company to work with, and do your customers enjoy the experience?
    • On time delivery
    • Training/documentation
    • Customer support
    • Ease of ordering
    • Payment terms
  3. Distribution Differentiation – Which type (direct, online, distributor, OEM, manufacturers rep) will provide the best coverage for your products? It may be a combination of these.
    • Speed of delivery
    • Quick technical support
    • Installation services
    • Spare parts
  4. Relationship Differentiation – Never underestimate how important every interaction is with your customers. It is critical that all team members are aware of how important they are in this. Employees, associates, or team members with customer interface can provide and demonstrate competence, courtesy, credibility, reliability, and responsiveness.
  5. Image/Reputation Differentiation – With the advent of social media this has never been more important and should have the necessary resources to manage whether internal or external.
    • Branding
    • Website
    • Product literature
    • White papers
    • Trade shows
    • Social media (Facebook, LinkedIn, Twitter, etc.)
  6. Price Differentiation – If you were successful in tackling the first five differentiators, this should be much easier. Successfully competing on price requires recognition that every customer has a different price they would be willing to pay for your product, but it also requires that you know the true cost to produce.
    • Price based on margin/profit expectations
    • Price by market/segment
    • Price by geography
    • Base price with options
  7. Workplace Differentiation – Yes, how much you pay employees and the breadth of your benefits package are important. But why would someone come to work for you and why would they stay? Do they feel they are a contributor and are valued?
    • Do they feel safe?
    • Do you produce a quality product?
    • Do you provide the tools and resources allowing for success?
    • Is there a periodic Employee Engagement Survey?
    • Is there a periodic Leadership Needs Analysis?
    • Are there visible career paths?
    • Are you training the leaders of the future?

Relationship and Service Differentiation must be part of your company’s culture and driven from the top. Image / Reputation Differentiation take time and thoughtful consideration to develop. It also changes over time and should be somewhat flexible and adaptable. Distribution Differentiation is strategic in nature and may be trial and error in the beginning. Product Differentiation is also strategic and absolutely an ongoing process. It takes commitment to continually evaluate customers, markets, competition and changes in technology and regulations. Price Differentiation is straight forward and should be easy. Workplace Differentiation is the most important of the seven. Without it the other six will be much more difficult to achieve.

Let’s be realistic – you can’t do all seven at once. As a business leader you need to prioritize based on the reality of your current situation and the direction you want the company to go. I’ll give you a hint. Workplace Differentiation is your top priority. You will also need to budget accordingly with available resources. Discuss the need for a new Strategic Plan, because if you have one in place, it needs to change.

Take a deep breath, you don’t need to do this alone. Pull your team together and start outlining areas where you can differentiate your company from your competition. You hired them for a reason, let them be part of the journey.

IMEC can help you answer questions and concerns, and provide guidance on your rebound strategy. Get help from the Illinois Manufacturing Helpline today!

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Steve Sandercook

Written by Steve Sandercook

Topics: competitive advantage, strategy, Leadership Development, COVID-19

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