Differentiation Continuum

Premature Differentiation Part 2

Even when potential customers understand your product, focusing too early on differentiation can hurt your sales. Even if people know what a car is, you still have to market differently if you’re Hyundai (at least in the US market) rather than Mercedes.

On the Differentiation Progression diagram, I call this market position Low Vendor Awareness. Potential customers understand the kind of widget you sell. But they but either don’t know your company, don’t know you make that particular widget, or just don’t see you as a category leader. Put in the customer’s voice, Low Vendor Awareness is just a fancy way of saying, “I know what a car is, but who the hell are you?” If you’re in this phase, your job is to create credibility and get considered.

The most overlooked key to cracking a market from this position is letting potential customers know you’re in it! People can’t buy a mousetrap or CRM software package from you if they don’t even know you make one. PeopleSoft did a very pure example of this kind of “we exist” messaging when they added Customer Relationship Management software to their enterprise software suite. They took out large ads that I’m told contained three words: “PeopleSoft Has CRM.” They didn’t waste words claiming their CRM was better than Siebel’s. That would have been a tough fight to pick. But for PeopleSoft customers back then — confronting an expensive integration of third party CRM to existing systems — the simple fact that PeopleSoft had a CRM offering at all would have been great news.

You can create further credibility and presence through activities that aren’t overtly self-serving. If you’re trying to establish yourself in procurement software, contribute articles to procurement magazines. Participate in conferences and panel discussions. Get quoted when the press needs a sound bite on e-procurement. All of these help establish your company as knowing something about the issues and pain points that keep customers awake at night.

If you’re working your way back from a negative perception, focusing on credibility over differentiation is even more important. Nobody cares that your car gets better gas mileage than competitors if they think the wheels will fall off. You don’t go for the throat with differentiation because the initial goal isn’t to win — it’s to be considered. Differentiation is about knocking competitors off the list. But you can’t do that until you’re on that list yourself. If you get on enough short lists you’ll eventually win some sales by sheer numbers. And you’ll have a seat at the table later in the sales process to make your differentiators clear.

I’ve gone a bit over on the automobile metaphors, but there’s an actual car commercial that beautifully illustrates marketing for consideration. The tagline is, “You’ve got to put Mercury on your list!” Mercury isn’t asking for the sale, they’re just asking to be considered alongside Toyota and Honda. It sucks for Ford that the reputation of their cars has slipped to the point where that’s the right approach. But it’s very smart of them to recognize their position and message appropriately. If people really do put Mercury on their list, then the company at least has a chance to bring up their strong points and sell some cars.

Is your marketing that realistic in addressing how customers see you?

See the Premature Differentiation Video

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