“In our market, all players offer the same product. There is little differentiation and usually the customers go for the cheapest offer. We struggle to differentiate from our competitors so we can keep a 10% premium price.”
This situation is all too common as intense local and global competition make it harder to sustain inter-brand differentiation. But here is the good news: you can differentiate your brand from competitors. And you should! Differentiation is the prerequisite for standing out and the primary source of growth. Your brand will eventually die as differentiation declines.
If you are looking to differentiate your brand, think twice about briefing your creative agency to come up with a fancy new brochure in the hope that your customers will notice you or suddenly decide to pay you the premium price.
Differentiation doesn’t come from marketing materials, it comes from the (perceived!) value that you add to your customers.
At Fast Forward, we have successfully been using a simple framework to uncover the mighty point of differentiation that is ownable by the brand while meaningful and relevant to the customer:
- Step in your CUSTOMERS’ shoes
- Get aquinted with COMPETITORS
- Rediscover your BRAND
- Articulate your point of DIFFERENTIATION
- Act on your newly found differentiation
In this post I’ll focus on the first step, more precisely on how to get information from the customers that you can then use to differentiate your brand.
We all know that we have to listen to our customers! But the challenge is how to do it in a way that
- doesn’t break the bank
- gives us actionable insights
- takes little time
Gathering customer data and insights is THE most important ACTION that you can take towards utmost differentiation.
I recommend you complete this step with a specialised research agency. However, if you do not wish to do that, here are 5 steps you can use to gather valuable information – one that can be then translated into actionable insights to drive your brand differentiation.
STEP ONE: Decide what is your end goal, or what are your deliverables.
Here are some deliverables that you might want to have:
- A prioritised list of brand’s strengths and weaknesses as seen by the customers,
- A prioritised list of “pains” and “needs” as expressed by the customers
STEP TWO: Decide how many customers you will interview and who are they.
This is qualitative research, so you won’t need too many people to talk to. However, you do need to ensure that you have at least 3 customers of the same type so you can meaningfully compare their answers.
For example – if you are a school, you might want to listen to at least 3 parents who have enrolled their children already, and at least 3 parents who haven’t. If you distribute ice-cream to restaurants, you might want to talk to a few restaurants as well as people who eat at those restaurants.
Not all customers will give you actionable insight. Choose carefully by applying criteria that is meaningful to you, such as:
- Geography (Europe, Asia)
- Level of development (start up, corporation)
- Size of company (revenue, number of employees)
- Time of relationship (prospects, recent customers, loyal customers)
- Type of business (university vs commercial, government vs commercial, distributors vs wholesalers etc.)
- Local challenges (tax, law, inflation)
STEP THREE: Decide the questions you will be asking.
Needless to say, the better questions you ask, the more insightful answers you will get. Here are a few “secrets” to help you craft a great questionnaire:
a). Always start with the challenges that the customer faces.
- What challenges do you face at the moment?
- Do you face different challenges this year compared with past years?
- How challenging is the marketplace for you at the moment? Please rate from 1 to 10 where 10 is the most challenging. What makes it so challenging?
By talking about customers’ challenges upfront, you establish a relationship quickly (people love to talk about their problems) AND you understand the bigger context, and thus understand why your customers think and act the way they do.
b) Understand the category / market before talking about your brand.
Why? Your brand doesn’t exist in vacuum but in a very dynamic environment. Without having a clear understanding of the context, you can easily draw the wrong conclusions.
Here is an example of questions you can ask your customers to understand the bigger context:
- What things are most important to you when buying printing machines / office furniture / employees insurance etc? Please list in order of importance.
- What frustrates you most when buying from your suppliers?
- What would you like your suppliers to do more of?
c) Capture customers’ perceptions
Remember that what your customer says might not be the reality but their perceptions. You want to capture these perceptions so you know which ones you need to adjust.
Here are some questions to get you started:
- How would you describe Brand?
- In your opinion, what are the strengths the Brand?
- What do the competitors offer that Brand doesn’t?
- Is there anything that Brand could offer you that competitors don’t?
d) Capture your customers’ “top of mind” thoughts
When you ask a question, quickly write down the first thing that the customer mentions. These are his or her “top of mind” thoughts, and the ones that are most important to them. If your brand can solve these top concerns and own the solution, you’re on your way to profitable differentiation.
In many instances customers have a long list of thoughts and ideas. Once they finish listing them, go back and ask which ones are top 3.
For example, your customer will give you several ideas of how to serve them better. To make the distinction between wishful thinking (the shoulds and the wants), you can ask, “Which 3 are the most important to you? Can you list them in the order of importance to you?” (these are usually the ones that they are ready to pay for!)
The reality test
This is one of the favourite techniques at Fast Forward. Once you finalise the questionnaire for your customers, use it internally too – send the same questions to your colleagues from marketing, sales, production and supply chain. You can use www.surveymonkey.com – it’s a free tool and you can set it up in minutes. The input is anonimus and hopefully, you’ll get some pretty straightforward answers and ideas.
Compare your customers’ and your colleagues’ answers and see which ones are aligned and where are the differences.