by Tony Vidler
You have to differentiate to stand out and attract business…but where do you do that. How do you do that? Well, it begins by thinking strategically about where you want to do it.
I remembering reading way back in one of the academic tomes on marketing that there were 5 attributes to any commercial transaction:
Very few businesses can build a reputation, or successfully execute a marketing strategy which achieves dominance, in more than one of these areas. There is typically a trade off between price and access, or price and product, or service levels and customer experience….and so on. To excel in one area typically means compromising to some degree in others. Larger businesses with significant resources can and do compete well in multiple attributes, but it is difficult for a smaller firm with limited resources to do so.
When it comes to thinking strategically about marketing in professional services it makes good sense to pick one…just one….and build your business reputation around it. It is the area which you choose to differentiate in, and attempt to dominate by being known as “the firm” which leads the industry in that space.
It makes sense therefore to pick the area where you believe you can exert some control, and which will be valued and accepted by consumers as something you can deliver on. THAT is one of the reasons why many professionals who have historically competed on product (quality of, volume of, choice of, etc) struggle today. Firstly, the professional advisers cannot in fact control product design or quality or even product performance. And consumers pretty much know it. So when a financial services firm promises to compete on a product basis there is an unspoken “oh yeah?” on the part of most consumers.
Frankly; products are commoditised by consumers. WE may understand the nuances that lead to significant differences in product quality but consumers generally don’t until a professional explains those nuances to them. So they tend to commoditise the products themselves. It follows that they tend to commoditise the advisers who choose product as their area to differentiate. What happens with commoditisation? Competition reverts to price comparisons…after all, the proucts are the same aren’t they so one may as well buy on price?
Customer experience, or service and quality standards in the execution of advice delivery, or availability and access or even price are areas where professionals can differentiate and build a marketing strategy which will be plausible to consumers. They are also areas in which vastly higher perceived value can be created, and for which consumers will pay a premium over and above commodities.
That suggests then that to build a point of differentiation which consumers will value and pay a premium price for that strategically one should think about “access, service and experience”.
These are the areas which hold the mkost promise for most professionals when it comes to differentiation.