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Here's How You Fix Your Dud Differentiator Why would anyone believe your firm different from all the others if you can't say why?

By Lee Frederiksen Edited by Dan Bova

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Mikolette | Getty Images

Your differentiator stinks. To a lot of business executives, this statement is more likely to elicit a yawn than alarm.

That's because they either don't know what a differentiator is or - worse -- they don't care that they don't have one. Either way, these professionals are missing a huge opportunity to set their firms apart from competitors, and build a true preference in the marketplace.

So what exactly is a differentiator? It can be an industry niche that no one else fills, a specialized service or a unique business model. It's something you can claim that others can't.

It separates you from otherwise similar competitors and creates perceived value. Think McKinsey's lofty reputation for hiring the brightest minds or Twitter's limited but memorable 140-character communications technology.

To establish a strong differentiator you need a clear understanding of your business and how buyers perceive your services. Many companies acquire this understanding by conducting well-intentioned but tragically flawed research on their clients.

That's right. Most client research done today is misguided.

Usually it takes the form of poorly designed customer feedback surveys, which introduce biases or plumb the shallow end of the inquiry pool. Asking clients to rate statements like "Acme Accounting cares about their clients," isn't going to shake loose any groundbreaking insights.

In addition, results from these surveys aren't provable and don't reflect the characteristics buyers seek during the buying process. The result is a differentiator with no credibility and no oomph. In other words, it's a dud.

Unfortunately, many professional services firms use this kind of feel-good feedback from clients to establish differentiators without a distinction. These false differentiators describe the quality of their people, their exceptional client service, or their unique process. Not only is this exercise is a colossal waste of time and energy, it lulls these companies into thinking they are different when in fact many of their competitors are saying exactly the same things.

Related: Why an Authentic Purpose Is The Best Differentiator

Instead of settling for flabby descriptors, companies should identify rock-solid differentiators that pass three crucial tests.

  1. Is it true? Any claim you make must be true. The marketplace can smell insincerity a mile away, and it's a major turn-off. Now, if you are in the process of changing your firm or services to create a differentiator, it's okay to be a little aspirational, so long as you are demonstrably working toward it.
  2. Is it relevant? If buyers don't care about what you're claiming, it's not a differentiator. For example, research has shown that "superior service" is not an important selection criterion for professional services buyers. So it doesn't really mean anything. You can determine relevancy by conducting research into your target audience's interests and concerns. Ask them what challenges they face and what you can do to help them overcome those challenges. The answers could provide fine fodder for a differentiator and potentially a profitable new line of services.
  3. Is it provable? Whatever you claim as your differentiator must be backed up with tangible evidence. If you claim a specific advantage over competitors, is there independent research or a third-party review that proves it? Have you received an award or some other form of recognition for what you're claiming?

Related: Value Chain As a Differentiator in FinTech

There are two ways to uncover a valid differentiator.

  1. Discover it through client research. Research, when conducted according to scientific principles by a neutral third party, can reveal a wealth of insights into the way people perceive your firm. You'll want to ask probing questions that explore why buyers select you over other firms, what criteria they use in comparing and vetting their choices and what clients value most about your firm. Research will not only uncover a differentiator, it will reveal critical blind spots and weaknesses that need your attention.
  2. Decide to do something different. If you find that there is nothing fundamentally different about your firm, do something about it. For instance, you could specialize in an industry, focus on solving a specific business challenge, or offer a unique business or delivery model. Change is never easy, especially for established firms, but businesses that want to stay relevant and grow understand they may have to pivot from time to time.

Related: Why Building a Unique Culture is Important

Many professional services firms believe that by embracing bland, me-too bromides, masquerading as differentiators, they are playing it safe. But in fact, these firms are doing themselves a disservice. In a marketplace littered with seemingly indistinguishable professional services firms, the advantage goes to those that stand apart. Deep down, most firms probably know there's nothing unique or compelling about their claims, but they'd rather be unexceptional than be bold. In reality, they are taking the riskiest strategy of all.

Lee Frederiksen

Managing Partner of Hinge

Lee Frederiksen is an award-winning marketer, Visible Expert®, and renowned business strategist who helped pioneer the field of research-driven marketing. As the Managing Partner of Hinge, a marketing firm for the professional services industry, he draws on his Ph.D. in behavioral psychology and his entrepreneurial experience as CEO of 3 successful firms to help clients achieve high growth and profitability. Hinge is based in Reston, VA.

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