Stand Out! How to Separate your Business from the Competition

Today there is more competition, tougher competition and smarter competition. Customers want products and services quicker, cheaper and they want it their way. To be successful, your company must pursue a competitive strategy. A strategy that will set your business apart from the competition is differentiation.

People are constantly bombarded with endless amounts of information. They are overwhelmed by choice and have trouble deciding who to buy from and what to buy. Your customers and referral sources choose among Durable Medical Equipment (DME) providers based on your differences. Therefore, you should differentiate yourself in order to give them a reason to choose you. The key to successfully competing is being unique.

Differentiation is aimed at producing a valuable product or service that is considered unique industry wide. The questions you should ask yourself are, "Where do we want to position our business in the future, and how do we get there?" First, a business must separate itself from its competition. It must identify and promote itself as the best provider of a unique service that is valuable to the customer. This will give the customers a sound reason for buying. Differentiation will also create insulation against competition because buyers will have preferences and loyalties to your offerings resulting in a lower sensitivity to price.

Once you are committed to having a strong differentiation strategy you then need to create the strategy your company will pursue. This is a three-step process.

1. Get a quick snapshot of the perceptions that exist in your market.

Your message needs to stem from what your marketplace has heard from your competition. Your competitors are out there making arguments of their own. By gathering this information you will know what your competitors are saying and if they are following through on their promises. Focus on the strengths and weaknesses that your target group of customers perceives. A good strategy is to take the weaknesses identified of your competition and make that your strength.

2. Finding your differentiating idea.

There are many ways to separate your company from the competitors; the trick is deciding which one is best for your company. First, identify positioning themes such as quality and response time.

Boosting quality is the surest route to creating superior customer value and quality is achieved only to the extent a product or service meets or exceeds the customer's expectations. Quality, as seen from the customer's perspective, is judged on performance, features, reliability, durability, serviceability, aesthetics and perceived quality. Because it is not possible to be superior to all dimensions at all times, you must choose the dimensions of quality that are most important to your customer. To achieve superior quality, managers have to be committed about getting better. Your organization must recognize that customer satisfaction is the objective. Each person's goal should be to make sure the quality of their work meets the expectation of the next person in the chain of events.

Response time may be just as important as quality, especially in the service industry we are in. Customers have grown to learn that they don't have to wait. If you cannot satisfy their requirements in a timely manner, they become impatient and will turn to the next provider.

Use your differentiation strategy as a motivational tool for your team.
To achieve superior responsiveness, start by setting ambitious objectives for improvements. Challenge what causes delay. Improving responsiveness isn't limited to just doing things faster. Progress can come from eliminating or reducing delays. Investing in information technologies can aid in improving responsiveness. One example is investing in a GPS system to locate where your drivers are in order to make the customer the next stop in delivering oxygen.

The next step is to filter each alternative. You should consider the following filters:

  • Is it meaningful to the customer? If it is not meaningful to your customer then there is no reason to adopt the differentiation strategy.
  • Is it feasible given your core competencies and customer perceptions of what you are capable of? It must fit in with your company's core competencies in order to be effective. Your customers need to think you are capable of this strategy; they need to buy into the idea and believe it is possible.
  • Is it superior or unique in relation to your competition and is it difficult for them to match? Your differentiating idea needs to set you apart from your competition.
  • Will it help you meet long-term performance objectives? The strategy should be in line with your company's mission, vision and goals. It should help you achieve your performance objectives.

After running your differentiating idea through the filters, you then need to choose the position that suits your organization best. One factor to consider is which position generates the most enthusiasm and commitment from your team. Use your differentiation strategy as a motivational tool for your team. Connect your idea with your performance objectives and goals and work towards improving your results. Focus on this single strategy and motivate your company to work together to achieve your goals.

3. Having the credentials.

Simply claiming your difference without proof does not give you credits. Consumers and people in general are skeptical. You need to have the data and statistics to support your differentiating idea. Develop the metrics needed for your differentiating idea and a way to track your results. You need to report actual numbers to your prospects. If your strategy has to do with response time you will need to record the timeliness of all of your deliveries and be able to report exact data on your performance.

If you are unsure of what your differentiating idea should be, you can invest in market research and get the answers to your questions from the marketplace. Not only will you find out what consumers really want, but you also will be certain that your strategy will work.

A good way to gather this information is to conduct primary research. Conducting interviews is a technique that is most associated with primary market research. The interviews can be done via telephone, face-to-face, mail surveys or over the Internet.

Develop a survey or questionnaire that your referral sources can fill out. Frame a small number of key questions to gather the market intelligence you are seeking. A good way to get face-to-face interaction is by sending the survey out with your sales force when they are visiting your referral sources. An example question to ask is, "What are the most important characteristics you consider when referring to a DME provider?" You can have a list of choices for the subject to rank, or make it an open-ended question. Afterwards, record all of the answers and determine the most common response. You will be left with differentiating ideas to choose from that are valuable to your referral sources.

Failures of differentiation strategies can be linked to one of three common pitfalls: meaningless differentiation, uneconomic differentiation and invisible differentiation.

Meaningless differentiation is a strategy where there are no benefits to the customer, or the benefits are unimportant to the customer. This can be particularly problematic when the value of the difference is not measurable.

Uneconomic differentiation is when there are added features that can be a burden with extra costs. Some forms of differentiation, such as improving quality and order responsiveness, may not be very costly. This can be difficult to judge as the benefits of increased customer loyalty are realized in the future.

The third common pitfall is invisible differentiation. A company can be superior to its competition on important values, but if the customer is not aware or does not see any value then the strategy is a failure. Remind your customers why they chose you to ensure they keep coming back.

The most important part of your differentiation strategy is communicating your difference. Positioning is how you differentiate yourself in the mind of your prospect. A common organizational requirement for a successful differentiation strategy is strong marketing function. Marketing is about perceptions -- and better perceptions win. Over-communicating your difference is not possible; it should be reflected in every aspect of your business. Find a window in the mind of your prospect to position your product, service or company against its main competitors. This enables your prospects to choose you over the others. With the large amount of products, companies and marketing noise out there, the only hope is to be selective with your marketing efforts. You should concentrate on narrow targets and practice market segmentation. Look for positions, or holes, in the marketplace. If and when a prospect needs a product, your firm should come to their minds in an instant. By adopting a differentiation strategy and following the steps outlined, your business will stand out from the competition and you will have great success.

This article originally appeared in the November 2004 issue of HME Business.

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