Jul 12, 2012

Differentiation Is A Side Effect

Differentiating a business is often misunderstood. It’s not about logos, websites or taglines. And it’s not about unique selling propositions, and the stories you tell. These things are all wrapping paper. They may indicate what makes your business unique, but they’re not the source of your differentiation. Differentiation is created from the inside out.

The foundation of your brand’s differentiation is in your business model and your operations. What do you do better than your competition? What do your customers value the most?

Differentiation is built on core skills

What you do best is your core skills. Core skills come in many forms: customer service, design, an engineering capability or experience working with a specific market. They are expertise or capabilities your firm possesses and invests in.

Core skills have three key ingredients:

  1. You recognize them
  2. You value them
  3. You invest in them

The third ingredient is the most important. By constantly investing in your core skills they become an integral part of your business. It’s where you innovate and create value. These investments become the heart and soul of your business, and what differentiates it from the competition.

Everyone is hard working and loyal

Not all capabilities warrant being called core skills. For example, every job applicant likes to say they’re hardworking and loyal. Those aren’t differentiators. Everyone is hard working and loyal.

In professional services like accounting, legal and financial services everyone is “relationship driven.” Relationships aren’t differentiators. Relationships may help retain clients, but they don’t separate one accountant from the next.

Core skills are expertise or capabilities that your clients value and seek out, and they help you solve real world problems.

Isolate your X Factor

Isolate your core skills, and invest in them as your X Factor. An X Factor is defined as a special talent or quality that could have a significant impact on the outcome of a situation. These are your core skills, and this is your source of differentiation.

Differentiation starts from the inside out. It’s not about marketing. It’s about isolating your core skills, and then delivering on them. As the old adage goes, actions speak louder than words. When you focus on your core skills and deliver exceptional work for your clients you’ll differentiate your brand without having to explain what makes it unique. Your customers will see it, get it and want it.

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