Photo credit: Photo courtesy of Scott McKain
The purpose of any business and what its people do “is to create profitable experiences so compelling to the customer that their loyalty becomes assured,” maintains Scott McKain (scottmckain.com), an internationally known expert of business and professional distinction. Yet typically, most customers cannot tell the difference between competitive businesses.
“If they don’t see any difference, they have to find the difference and the way they do that is through price,” he points out, “and that is the single-worst point of differentiation for any organization in any industry.”
In his keynote address to the opening general session of Heavy Duty Aftermarket Week (HDAW) 2014, McKain said differentiation is becoming considerably more difficult. “Being great is no longer good enough. You need to establish strategies that create distinction and generate true separation from the competition.”
Held in Las Vegas in late January, the annual HDAW is the largest North American gathering of the independent heavy duty aftermarket.
The Three Destroyers
If businesses are trying so hard to be different, why, from the customer’s perspective, does everything seem to be the same? Because of the “three destroyers that create a collapse of distinction,” explained McKain.
Destroyer #1: Copycat Competition.
This is when a business, seeing that a competitor has an advantage, will either imitate it or improve upon it incrementally. This gains a business no traction with customers because companies are mutually destroying any points of differentiation.
“Instead of competing against each other, companies need to be competing for the customer.”
Destroyer #2: Change that Creates Tougher Competition.
There is now tougher competition because of the Internet. It used to be a customer had to come or call a business to get product information. Now, customers are globally connected.
“This fundamentally changes the sales organization from providing information to delivering wisdom and insight.”
Destroyer #3: Familiarity Breeds Complacency.
Contrary to the saying, “familiarity breeds contempt,” familiarity breeds complacency.
The more familiar customers are with what a company does and how it does it, the more likely they are to take that company for granted. Inversely, the longer a company has a customer, the greater the likelihood it will take that customer for granted.
“Businesses usually have expansion plans, but very few have a customer retention plan. To keep a business growing, it’s not only about selling more, it’s also about keeping what you’ve got.”
The Four Cornerstones
To truly make a difference in a business, its people have to get better and be distinctive, said McKain. This can be accomplished through his Four Cornerstones of Distinction:
A business needs to be crystal clear about what it is and what it is not because it will not succeed if it tries to be all things to all people. Rather, there needs to be a focus on what makes it distinctive.
“You have to focus on your clarity and enhance that for the sake of the customer because mindshare precedes market share. If customers aren’t thinking of you, they’re not doing business with you. If you want to create market share, grow mindshare through your clarity.”
“Creativity without clarity doesn’t create distinction,” and you only need one point of distinction, research has determined.
By way of example, McKain cited two companies that use short, powerful and compelling phrases to tell how they are different, better and distinct: Papa John’s Pizza, “Better ingredients, better pizza,” and FedEx, “When it absolutely, positively has to be there overnight.”
Nowadays, customers want narratives with facts and figures placed within the story, not sales pitches. “When you tell a compelling story, you engage people because you connect with them, and that’s important because emotion precedes economics.”
Customer Experience Focus
Too many businesses focus upon the transaction and fail to consider what kind of experience is being created for the customer. Yet, research shows that it is the experience that creates repeat and referral business.
Do an Audit
“Audit your own customer experience and then create distinction by finding ways to produce the ultimate experience a customer could have doing business with you,” he recommended.
“Your goal should be to create the ultimate customer experience for every customer and every prospect every time. Customers don’t want you to make it right. They want you to get it right.”
Concluding his remarks, McKain emphasized the importance of people in truly making a business stand out: “Every employee that has any interaction with a customer at all, at that moment for that customer, the employee is the CEO of the ultimate customer experience.”