Setting You Apart From Competitors

Sure you've got a bundle of value-added services, but so do your competitors. If everybody's selling the same thing, how do you differentiate your offer? You make a plan.

by Guy Decatrel VP of sales and marketing, Brand X [April 29, 2005]

The ISP business is a tough and competitive one, and there are no definitive formulas and sure-answers. Given that business planning, strategy development, and marketing are more art forms than they are disciplined sciences, this writing examines some methods for determining and establishing competitive advantage and differentiation.

Environmental Scan: What are my competitors offering? If you are segmenting and targeting a market, you must know what the segment and target market wants and needs. You must also know how competitors are satisfying or not satisfying those desires and requirements.

Distinctiveness: Conduct a classic Strength, Weakness, Opportunities, and Threats (SWOT) analysis to understand what your competitors are doing and what they are not doing (competitive analysis of their entire offer, value, and pricing). Understand your own Strengths and Weaknesses and ask what can I do for my customers that no one else can do? What can I offer that no one else can offer? A natural outcome of an Environmental Scan is analyzing the need and determining missing value that you can profitably deliver. This should consist of the missing value that the target market wants and needs, not just what you think it wants, resulting in a perceived or real Competitive Advantage.

Competitive Parity or Competitive Edge? From the market's perspective, you and your competitors are the same. Competitive parity (minds hate confusion, lose focus, and don't change; see below) remains unless you can demonstrate a competitive edge. An edge can be in the form of a new service that the target market wants or needs. It can also be something that competitors already do, but that you can do better, more effectively, more efficiently, and, most importantly, one that can be profitably delivered. The result is the competitive edge—filling the missing value.

Value Proposition: Having demonstrable value and a competitive edge is great. But the ability to sell ideas surpasses even the ability to create them. Design a Value Proposition statement, i.e., a clear and concise statement of the tangible benefits that you will profitably deliver to respond to the target market's needs and wants, and that will enhance your customers' lives.

Positioning: Positioning is competing. According to subject matter experts Trout and Rivkin (see Positioning and the Internet), minds are limited. Minds hate confusion. Minds are insecure. Minds don't change. Minds lose focus. What's needed, they note, is selling ideas in a way that encourages the mind to remember; to present value propositions by associating them with things people already know; and minimizing complexity through a simplified (clearly and concisely communicated) message of what the company stands for and what it will (profitably) deliver.

Develop an outlook for your product that touts your strengths. This is the way that you want your brand perceived among others in the target market so that it will appear to have valued benefits. List competitive offer benefits and learn how consumers perceive the benefits of existing competitive brands. Take advantage of highest levels of perceptions and correct the lower level perceptions where possible.

Communications Plan: It's not over yet. The market has to become familiar with and know your offer. Work out a communications plan for your value proposition. This can include trade shows, local conferences; Yellow Pages, local newspapers, or other media. Consider getting invited to events to speak about technology. Possibly select a market niche and become the technology expert, offering custom solutions in response to needs and wants.

Differentiation: Conducting such analysis will help you position your offer and help your customers see the difference between your value and the competition's impossible-to-tell-apart babble. You'll be seen as offering some value seen as better. Articulating a clear, concise, beneficial, and profitably delivered value proposition is the competitive edge that differentiates your business from the competition and demonstrates your uniqueness.

ISPs must stop head-on rushes to adopt generic low-price and canned packaged applications and instead, tailor valued Internet services and technology to their particular market strategies. Is there any unclaimed space you can claim, or a point where we you apply our unique leverage? Do things differently than competitors in order to deliver unique value to customers is differentiation and a competitive edge (Strategy and the Internet, 2001). The process of establishing and maintaining a distinctive position can be daunting. The outcome can likely result in overall marketing effectiveness.

—End