Achieving Your Company's Goals Through Differentiation

BY DON LEVIN AND WILLY GISSEN

Companies evaluating prospective suppliers ask, "How are you unique? Why should I purchase from you instead of the other guy?" In marketing terms, these are questions about differentiation, the basis for corporate and product growth.

In a few simple sentences, at most, a differentiation statement explains a company's or product's basic advantage versus its competitors. It defines the distinguishing benefit of the firm and its products. Differentiation is an intrinsic part of a company's mission and can -- or should -- be its slogan as well. Even a product name (such as "FloMax") can demonstrate differentiation.

A differentiation credo can be expressed in stationery footers, business cards, press releases, corporate literature, sales letters, presentations, promotional material, Web sites, advertising and trade show displays. And it is valid for company identity and all corporate stakeholders; recruitment and retention of employees; motivation of end-users, intermediaries and referral sources; mergers and acquisitions; and communication with global contacts, suppliers and other business partners.

Though used for the private sector, the concept of differentiation is demonstrated in political campaigns. Repeatedly, the candidates hammer away at why they, not the other guy, should be elected. Television commercials, even different ones by the same candidate, come back again and again to the same themes.

The Volkswagen Beetle is a differentiating concept. In the eyes of many people, Microsoft's attacks on Washington's anti-trust efforts created an unfavorable differentiation statement. A truly easy-to-use VCR would be a differentiated product.

Professional service firms -- consultants, attorneys, accountants, ad/public relations agencies, health professionals and others -- continually strive to separate themselves from the competition. To attract funding and members, associations and societies do the same.

Characteristics of Good Differentiation
The following qualities help to define good differentiation statements:

• Simplicity,
• Easily grasped by people outside your field,
• Convertible into a slogan,
• Builds a business-to-business or consumer brand,
• Defines a new category or an extension of an existing one,
• Ensures entry on a short list of suppliers,
• Longevity (expected one to five year's life), and
• Easily and continually reinforced.

Considerations
You can draft your differentiation statement by considering the following:

• Scope: individual divisions within your company; geographical/international reach; multi- or single-product; market segments; applications; government role, if any; history; and marketplace understanding and assumptions;
• Product: know-how, patents, expected line extensions and name;
• Benefits: cost savings; service; breadth of usefulness; productivity; maintenance; packaging; color coding; availability; delivery; help desk; and ease of use, understanding, and remembering;
• Corporate: years in business, anniversaries, financial wherewithal, market knowledge, leadership and the stock price history for publicly held companies;
• Competition: preempted claims; and
• Presentation: A photo or diagram can prove uniqueness.

The Differentiation Process
Differentiation statements are developed in order to preempt other companies in the same field. To accomplish this, statements must be believable, consistent, practical, simple and straightforward. Preemption demands not only a real comfort level in using the product (or service) by the consumer or business but also a favorable image.

Rival companies continually improve their image and product. The competitive process may require updating differentiation statements. Still, statements should be composed to last even though they may be refined from time to time.

Get a preliminary statement written and accepted if you can't expect to get permanent agreement among your colleagues at the outset.

Comparative Differentiation Statements
Of course, any company must be defined in terms of the competition and point out rival companies' limitations and faults. It must be sure, however, to list the benefits of its products and avoid being trapped into charges and countercharges with other firms in the same field.

In politics, negative campaigning is known to move voting percentages more rapidly than positive campaigning. In business, however, the purchaser is more likely to carefully study all advertising claims. Economic decisions command closer observation than voting. In addition, the purchaser is often an expert in the field, especially in business-to-business transactions. Since differentiation statements are at the core of a company's self-definition, CEOs should be sure to project a positive image for their firms.

Differentiation in Product Development
Instead of differentiating a product that has already been created, some marketers are able to manipulate product specifications in order to achieve effective differentiation.

Design, efficiency, consumer and market preferences are pre-product development areas that can later be essential for differentiation.

In automobile manufacturing, for example, cars are designed and built with special benefits that differentiate them from the competition. These features are then touted in advertisements as reasons to purchase one vehicle or style over another very similar one.

Final Thoughts
Of course, effective differentiation makes investors value one public company more than another. Another result of a well-crafted differentiation statement is support for any side issues, causes or charities that a company promotes. Copyright and other legal protections are intrinsically tied to differentiation.

Differentiation statements are at the heart of successful publicity and promotional campaigns and should be carefully composed and dynamically pursued.

Donald Levin is president of Levin Public Relations & Marketing, Inc., a full-service communications firm with clients in high tech, financial services, general industry, academia, consumer products and the professions. Before founding Levin Public Relations & Marketing in 1984, he was president of the public relations subsidiary of The Ted Bates advertising agency, where in less than two years he doubled the firm's income. Clients included Seiko, Pulsar, Maxell, London Fog, tourism to Greece and Puerto Rice, two cruise lines and high tech companies. Prior to that, Mr. Levin was with Hill and Knowlton, the premier public relations firm. He holds a master's in management from Rensselaer Polytechnic Institute and a B.S. in engineering from City College of New York.

Account Executive Willy Gissen is a Harvard graduate with 10 years of corporate and civic experience including four years working for Dennis Mehiel at the Westchester County Democratic Committee and in his Congressional campaign. He works with clients, creates client programs, writes press releases, backgrounders and trade articles, and contacts reporters to generate interviews and other forms of publicity.

Return To C@LL CENTER Solutions' November 1998 Publisher's Outlook