Business history is full of stories of entrepreneurs who stumbled upon a great idea that then became the cornerstone of a successful company. But finding ways to differentiate one’s company doesn’t have to be an act of genius or intuition. It is a skill that can be developed and nurtured. We have designed a two-part approach that can help companies continually identify new points of differentiation and develop the ability to generate successful differentiation strategies. The first part, “Mapping the Consumption Chain,” captures the customer’s total experience with a product or service. The second, “Analyzing Your Customer’s Experience,” shows managers how directed brainstorming about each step in the consumption chain can elicit numerous ways to differentiate even the most mundane product or service.
How do people become aware of their need for your product or service?
Are consumers aware that you can satisfy their need? Are they aware that they even have a need that can be satisfied? Your company can create a powerful source of differentiation if it can make consumers aware of a need in a way that is unique and subtle.
How do consumers find your offering?
Opportunities for differentiating on the basis of the search process include making your product available when others are not (24-hour telephone-order lines), offering your product in places where competitors do not offer theirs (the mini McDonald’s outlets in Wal-Mart stores), and making your product ubiquitous (Coca-Cola). Making the search process less complicated, more convenient, less expensive, and more habitual are all ways in which companies can differentiate themselves. And when competitors can’t or won’t do the same—at least, not right away—you have the potential for a strategic advantage.
How do consumers make their final selections?
After a consumer has narrowed down the possibilities, he or she must make a choice. Can you make the selection process more comfortable, less irritating, or more convenient? Look for the ideal situation, in which competitors’ procedures actually discourage people from selecting their products, while your procedures encourage people to come to you. Citibank for years captured a significant share of the college student market for credit cards simply by making it easy for students to obtain a card while competitors made it difficult.
How do customers order and purchase your product or service?
This question is particularly important for relatively low-cost, high-volume items. Can a company differentiate itself by making the process of ordering and purchasing more convenient?
