As a business owner, even if you haven’t explicitly gone through the process of creating VISION, MISSION and VALUE PROPOSITION statements, at some point you will have thought about what makes your ‘offering’ (whether it be a product, a service, a piece of software or other intellectual capital) different. Differentiation is the term used to describe the process of developing products, services and promotional messaging that distinguish your offer from those offered by competitors in the minds of target customers.
Typically a new business will strike out based on an entrepreneurial new idea or product. Alternatively, it may be ‘re-purposing’ something that has gone before and trying to make it better. We can take a lesson here from both the humble burger market and what Jeremy has done at Town Close Financial Planning.
When I first moved to London in the mid 1980’s, burger choice was distinctly limited – a few McDonalds’, Ed’s Diner in Soho, Hard Rock Café, or if you were slightly theatrical and ‘in the know’ you could order one ‘off menu’ in Joe Allen. But since the early noughties new chains have been springing up and growing venues exponentially. Gourmet Burger Kitchen kicked off the trend in 2001, Haché, a Francophile chain in 2004, Byron Burgers in 2007, Patty & Bun in 2013 – the list goes on. When just the other week I noticed ‘Burger Shack’ was opening its first stand-alone restaurant in Wimbledon, I found myself thinking ‘the last thing London needs is another burger restaurant’. And yet, they’re all packed and (almost) all excellent. So how do they differentiate themselves?
In the early days, there were clearly marked differences between a McDonald’s and, for example, a Byron burger. The origin, age, quality of the meat and composition was a clear differentiator, and one that could be easily communicated through both messaging and pictures. Today though, most of the ‘up market’ chains produce excellent quality burgers that, arguably, most of us wouldn’t be able to tell apart. So they look elsewhere or differentiation. All still attempt it through the hyperbole of their messaging. Some through additional and unusual toppings, type of bun or the way they make/present the fries. Some through type and style of service (one restaurant in LA has all waiters on roller skates!). Bleeker Street Burgers started not in a restaurant but in matt black trucks that roved from location to location. Interestingly, with the exception of McDonalds, price is not generally a differentiator in this market, but are ‘Scratch-made duck fat, rosemary salted fries’ really a differentiator, or is it just the fact that you have something different to say in your messaging that’s important?
The point is, differentiation doesn’t have to be huge but it needs to give you something to talk about. The first true burger restaurants really did create a major step up in the quality of the ‘patty’ and with it the public’s expectation. Since then, improvements have been generally incremental and in most of the places named above you’ll get as good a burger as you will anywhere in the world. But they all keep trying, moving forward with tweaks here and imaginative touches there, forever trying to stay one-step ahead. Much of it just hyperbole and creative messaging, but when the oven gloves are off, you fight with whatever weapons you have to help you stand out.
If your business is focused on services rather than product, then differentiation becomes more difficult and requires more thought. When Jeremy set up TCFP, a very clear point of differentiation for him was the twice-yearly meetings with his clients to review progress. Previously, many IFAs would sell a client a policy, take the commission then never see that client again. I’m not sure if Jeremy will be flattered to be compared to the early burger market, but his decision to build life long relationships with his clients, like those early ‘ultra high-quality’ burger restaurants has set a new, high bar and his growing client list proves it’s working. Now, just like the burger market, other financial services firms will surely follow, so the trick will be to keep innovating, keep adding small points of differentiation, whilst, of course, making sure your existing clients are well serviced.
We’ll look at how services companies can stay ahead of their competitors in my next blog. Until then, mine’s a 6oz Ginger Pig dry aged beef, in a toasted brioche with red onion, lettuce, mature Cheddar cheese, picked cucumber, gherkin jalapeño bacon and rosemary salted fries! With Ketchup.
Alan Flack
alan@anflair.com
www.anflair.com