Differentiate or Die

How do you really differentiate yourself from your competitors? There are normally three types of competitors in a market. They are:

• The big solid national/global company.
• The small regional company with a good reputation.
• The small cheap competitor.

There may be several of each. Lets take a look at the most common combinations. If you are the global leader, and you are competing against a good regional, they will say that you are too big and impersonal and have too much overhead. They will say that they are local and give personalized service.

If you are the global leader and are up against a cheap competitor, they will say that they do everything that you do but for less money. They will say it is because they have no overhead.

If you are the global leader against another global leader, they will try to differentiate with their product or solution, i.e. develop better relationships with the economic buyer, say something negative about your company, or try to come in at a slightly lower price.

If there are three competitors, two global and one regional, the regional will say all big companies are the same and by so doing, actually reduce the competitive situation down to two choices, (big impersonal or small personalized). Meanwhile, the two big companies must compete against two competitors, the other big one and the regional.

Have you developed an effective strategy for each situation? If not, why not? Those of you who have been long time subscribers to Ray’s Rules have heard me say, “If you can predict it, then you can prepare for it.” You should be able to predict all the possible combinations of competitive situations in your market. Then you should be able to brainstorm with your team to develop a strategy to deal with each combination. Lastly, you should then practice, including role play, executing each strategy until you can do them in your sleep.

I know that many of you are wondering if I have a solution for each combination. Of course I do and wouldn’t you think less of me if I did not do what I teach? If I can do it then you can do it. Here is an exercise to get your started. Think about how you would sell against your own company if you were each competitor, and make sure that you include all your weaknesses. Then assume that is the presentation your competitors will use with each prospect, develop a strategy to destroy those presentations, and practice until it drives you crazy! You know that the presentation strategy you develop against yourself will be stronger than anything the competitor will actually use. Therefore, if you can come up with a winning strategy against your own presentation, it will certainly work with the less effective strategies of your competitors.