This year, I need a heading. In 2020, I choose not to go North or South, but to build a custom compass that leads to one specific treasure. That treasure is MARKET SHARE.
Differentiation is a strategy that aims to distinguish a company’s products or services from the competition. The big question is, exactly how do you do that.
Two words you should separate while reading: Differentiationand Focusing. Differentiation is the means to standing out. Focusing is one way of doing that.
This year, I choose FOCUS as the compass that will direct my Differentiation efforts towards the treasure of a bigger market share. With that, my goals and resolutions will score and resolve themselves. My aim for 2020 is to FOCUSenough, all towards being master of one, not the jack of a couple trades. Hold me to that and ask me by year’s end how it went.
At this point, forget about me. The opinion part is done. The rest are all facts. Happy New Year!
The barrier to market entry has dropped drastically. Within the past decade, many industries and sectors have seen a significant increase in competition as a result. The risk of confusing customers or missing your first attempt at a good impression is getting very expensive. Differentiation therefore has become vital to the survival of most products and services.
You need Differentiation when your product stands with itscompetitors, because that’s an obvious way it sells. But it also needs to stand out while it stands within your own listproducts and services as well. It is in your best interest to assume that the customer will not come to you for clarification, because most people will not bother to ask. They’ll just move on to a product they already know or one they can easily understand.
Change is worth pursuing when the gains outweigh the cost. Altering strategy to make your product stand out is worth the cost, obviously. So HOW can one spend that capital towards Differentiation? We answered that. FOCUS. Yeah but focus HOW? WHERE?
As the name suggests, it’s got to do with the actual productand its physical properties. Product Differentiation could be working on the external features of the product, the properties of the product like its performance, and the efficacy (doing exactly what the product is supposed to do).
Whether it’s distinguishing characteristics in performance or physical looks, Product Differentiation is towards making sure the product has that extra edge over competitors. But there lies the problem. Most physical features can almost immediately be copied by competitors the moment it starts making waves in the market. This makes any lead in the market by way of Product Differentiating temporary.
Having FOCUS is still best with Product Differentiation. See those medicine-sellers in public transport that advertise concoctions that cure about 36 varying diseases? Don’t do that. FOCUS on what your product does very well. Build on that. Maintain the feel of your product for longer periods so your customer base can form a bond with it. Then FOCUS on making sure your product does one thing very well.
Relationship Differentiation seeks to let your company and product stand out from the crowd by making sure that the company personnel display competence, reliability and credibility while providing some form of relatability as well. People use products that they feel are a part of their circle. Customer relations are therefore an important way to draw the market in on your operation and to let them feel like they are a valued part of your processes.
FOCUS is important here as well. Have you ever dropped a product because the customer service went bad? Most often it’s because there aren’t customer service guidelines for the staff to follow, especially for SME’s. FOCUS on getting a set of carefully prepared answers, reactions and responses to customer contact that communicates courtesy as well as responsiveness and you’ll have people saying things like “over at that company they’re so nice and efficient”. People don’t like having their questions unanswered.
All the above differentiation avenues are the path to Reputation Differentiation. What’s the word on the street about your product or service that sets you apart from the competition? Properly executing the varying Differentiation techniques will create a good reputation for your product and company.
Some companies deploy separate, targeted efforts specifically towards building a good image for the products. This is done by way of marketing. “Think Different!”. Remember where these two words come from? Through marketing, you can communicate the exact way you’d want your product or company to be perceived.
FOCUS can still be deployed to help build a reputation in this scenario. Big companies may carve a chunk of the market for themselves easily, and yes, unfortunately you cannot compete. But you can thrive but doing what you do best and doing it so well you can do it while you sleep.
Many people return for a product or service because of a specific need, a specific kick requirement. Give them that kick, and you’ll build a fanbase that no value of flashy ads can steal from you, because that’s exactly what they’ll be: fans.Through FOCUS, you create a niche clientele that nobody can take away from you because as you focus your efforts, you become a master of one.
DALEX Finance and its operational strategy is a goodexample of how Differentiation through FOCUS has been used to capture market share.
With DALEX, it’s about VALUE DIFFERENTIATION by ensuring that the quality of credits they took on were better through advanced technology mitigation methods. So, they used technology to remove a lot of risks. By doing so, the value for their services skyrocketed, resulting in impressively low default rates. And this was before biometrics became an integral part of processes in Ghana.
Dalex’s FOCUS on a marriage between data and technology has guided its entry into markets where others have failed. That is why they can work with the rural farmer or entrepreneur. With such a strategy, who wouldn’t. Dalex has depended massively on data and technology to mitigate risk. That is their FOCUS.
The beauty of this strategy is, it can be used in Shanghai, in Washington DC, or in Kokrobitey Ghana because it’s really about the thoroughness, the efficiency and the clarity of the technology and risk mitigation systems, which is their FOCUS.
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How do you think you can apply what you’ve just read in your current situation? Do you have any other Differentiation techniques that are worth mentioning? When have you embarked on a Differentiation Agend through FOCUS and nailed it?!
Hit me up on social media and let’s keep the conversation going! I read all the feedback you send me on LinkedIn, Twitter, Instagram and Facebook.
Also, feel free to send me your articles on relevant topics for publication on the Macroeconomic Bulletin. I’d give you full credit, an intro, and an outro. Kindly make it about 1000 words.
Have a lovely week!
Maxwell Ampong is the CEO of Maxwell Investments Group, a Trading and Business Solutions provider. He is the Business Advisor for the General Agricultural Workers’ Union of TUC (Gh). He writes about trending and relevant economic topics, and general perspective pieces.