In highly competitive markets, differentiation is hard. When a provider fails to differentiate, the consequences are severe. A recent Gartner survey found that when technology buyers find it difficult to understand a provider’s differentiation, they will choose a more established option, delay the purchase or do nothing.
In many cases, buyers may choose more than just one of these actions. While the consequences are particularly severe for emerging providers, a failure to differentiate also impacts established companies. Regardless of size, it requires providers to look closely at what frustrates buyers, according to Hank Barnes, research vice president at Gartner.
“Providers must review and refine their approach to how they communicate and interact with the buying community,” said Mr. Barnes. “This offers an opportunity to look closely at their target customers’ needs and wants, their competition, and what sets themselves apart from their competitors.”
The four biggest opportunities for provider differentiation are:
1. Narrow your focus through segmentation
While your product may appeal to many markets, buyers prefer a focused provider. The needs of your target customers may vary by size of business, industry or other factors, and trying to appeal to everyone creates confusion and increases costs. Buyers question the ability of providers to support both large and small companies. They worry that providers won’t understand the unique attributes of their business and industry. To combat this, consider narrowing who your target customers are — and communicate that clearly.
2. Clarify the competition
Differentiation is about being different, which means comparison is key. Focus on the primary competitive alternative — the most frequent option/approach your target customers would choose to address the challenge/opportunity if they don’t choose you. Describe that alternative clearly. Then, share what makes you different.
3. Look beyond the product
While, in some cases, your product may truly be unique, that uniqueness is often fleeting. Customers purchase products, but what they want are business outcomes and solutions to their needs. They recognize that the product alone is seldom the answer. Build a deeper understanding of your target customers, and find other things that matter to them. These elements could become your differentiator.
4.Reduce your claims
A big challenge for buyers is understanding the real source of value. Is your solution the easiest to use, or does it have the highest performance? It’s hard for buyers to believe you can offer both. Positioning your value provides a way to focus on what matters most. Once you find that, make sure you communicate it consistently in everything. You may need to address other value elements, but make them supporting elements of the simpler message. Along with reducing the number of claims, providers should also consider reducing the use of superlatives. Calling yourself “the leading provider” when a buyer has never heard of you immediately invites doubt. Be clear and be direct, but don’t make claims that you can’t quickly prove to buyers.
“The most effective path to improving differentiation is to make tough choices. Refine targets. Get more specific about competition. Clarify claims. Prove value. Each of these steps can help,” said Mr. Barnes. “Differentiation is an ongoing area of focus that requires constant monitoring and tuning. There is no magic bullet for differentiation. Instead, different messages and values will appeal to different buyers. Focus on the right segments, and right situations, to create differentiation that works.”
(Extracted from Gartner; «The art of differentiation», Christy Pettey; march 17, 2016)