Perception is the reality, and people buy based on what they believe. Let’s look at an example of two delicatessens. Imagine you’re very hungry. You’re walking down the street and you see two delicatessens right next to each other. The one on the left looks like an average deli - reasonably clean, a range of food items, a few people inside, and a sign on the window that displays the name and the year it was established.
But as you look at the deli on the right, the difference between the two is obvious in an instant. There’s a big sign on the front window that says “Passionate about food!” Underneath that, it says “At Pret a Manger we are passionate about food and the pleasure it brings. After years of practice, we have developed a range of sandwiches, salads, soups and desserts that are unique, delicious, healthy and freshly prepared each morning in this shop. We bake our own bread and pastries, and insist on providing you with the highest quality and quickest service…all with a smile.” The deli is also packed with smiling people.
Based on that initial assessment, which deli would you most likely step into first? Why? Was it because the deli on the right seemed to offer something better or more appealing? Could it be true that both deli’s offered similar products and services?
So now you can see how it can be the differences that potential customers perceive that make them choose one business over another. And those differences make the customer feel more confident about their final decision as well. That means you must differentiate your business—or develop what we call Unique Core Differentiators or UCDs.
Unique Core Differentiators (UCDs)
Unique Core Differentiators (UCDs) clearly articulate what makes your business different. They are the special things about your product or service or business that compel customers to buy from you rather than your competitors.
UCDs target real buying concerns, key frustrations and benefits for your customers.
They must form the “core” of your business, permeating every area, in order for you to fulfil any differentiation promises you’ve made.
They must be communicated in all of your marketing activities to work effectively.
Do you have any Unique Core Differentiators?
Think for a few moments about some of the things you think are unique about your business and jot them down for later. It could be that your business offers better or unique products or services. Or perhaps the specific way you deliver the product or service brings better results for your customers. Maybe you offer a better value, or the experience within your team far exceeds the competitors’.
Write down anything you can think of, no matter how big its significance to you.
UCDs are powerful in five key ways
- They articulate exactly what your customer wants: Well-formed differentiators target your customer’s “hot buttons”, buying concerns, or key frustrations. In one statement it educates them about exactly why they should buy from you
- They improve the results from your marketing: They highlight the “benefits” of your product or service rather than just the “features” in all of your marketing activities
- They give a specific focus to your team: Gives a consistency of purpose to everyone on your team in the way they present themselves and deal with customers to support what you’ve said differentiates you
- They improve the operation: They sit at the “core” of your entire business and the systems you use
- They help increase sales: Bring customers in, keep them coming back again and again, and build a referral network - all without ever lowering your prices
Some examples of UCDs
- · Shipping company: “Absolutely, positively overnight” created a point of differentiation among shipping companies for Federal Express. They also had to improve the core of their operation to deliver on their promise
- · Dentist: “Our aim is for you to enjoy your visit” Providing tea service in a comforting setting - a 12-page booklet on what differentiates them is given to each client
- · Construction company: “We will pay you $100 for every day we go over the targeted completion date” targets customers’ key frustration with builders…that the deadline is hardly ever met
- · Grocery store: “The fresh food people” targets customers’ desire for the freshest produce
- · Retail clothing store: “Every customer demand will be met…without question” has customers purchasing again and again from Nordstrom - their personalised customer service is also a differentiator
- . Retail appliances: LV Martin was known for "It's the putting right that counts"
- . Retail hardware: Bunnings – “Lower prices are just the beginning”
Three types of UCDs
Unlocking, discovering or creating UCDs in your business can be a key to generating better results from your marketing and sales efforts. When you are examining the ways in which your business and what it delivers is unique, remember that there are three types of UCDs:
The first is an "Actual" UCD: when there is something genuinely unique about your product or service
Example: “Parts Overnight” The founder of a very successful company realised that it was next to impossible to fix a laser printer overnight … the average turnaround time was six weeks. Why? Because only a couple of very large companies carried the spare parts for technicians to order. Because he guessed that people might like to get their fixed printer sooner than that, he developed a unique way to deliver printer parts overnight to technicians and offered a guarantee of quality. The technicians are happy because their customers are happy, and the company went from $4,000 to $20 million in just four years.
The second type of UCD is “Created”
Did you come up with a long list of things that differentiate your product or service from your competitors? Perhaps you’re having trouble finding anything that is genuinely unique about it. If that’s the case, you’ll need to create a point of differentiation. It helps to examine the WAY you do business rather than just the product or service.
For example:
- · A guarantee unlike any other offered in your industry
- · A level of after-sales service that surpasses all others
- · A unique delivery or installation process
Example: A wholesale baker offers a risk-free guarantee … if the retailer does not sell the baked goods, the baker will buy them back at full price. This ended up capturing the majority of the local market because it solved a key customer frustration and gave them a reason to buy from him. They don’t even mind paying a slightly higher price because of the guarantee. He removed his own risk by qualifying the guarantee with “after you’ve paid within seven days of delivery.”
The third type of UCD is “Perceived”
You may still not have anything in your business that’s totally unique. But if you’re the first to articulate a perceived difference (even though your competitors offer the same) you’ll stand out in the crowd as if you are unique. There are so many things it could be, but it should still be real.
Finding your own UCDs
Get out the list that you wrote down earlier in this article. Now, look at it from your customers’ perspectives instead of your own.
What benefit are you providing?
What key frustration are you removing?
What are you willing to go the extra mile on the differentiate yourself?
What is something that everyone in your industry is required to do, but no one articulates as a UCD?
Add any new UCDs that you come up with to your list.
The thing you need to do is to ask your team members what they think your key UCDs are. You may be surprised at what you hear. Often your team members have much more daily contact with customers, and have a handle on their needs and frustrations and how to address them.
Include the new UCDs your team members come up with on your list.
Finding your own UCDs …. have someone ask you
If you and your team are still having difficulty finding something about your business that is truly unique, a useful technique is to sit down with someone you trust who does not work in your business and have them interview you.
It’s a good idea to tape the interview because you’ll probably come up with several UCDs without knowing it, as well as a wealth of great marketing copy that you can put to good use later.
Instead of asking, “What is unique about your business,” the interviewer should ask questions that dig deeper such as:
“Tell me what happens in your business every day…from start to finish.”
“Why do you do it that way?”
“Why do you think people buy from you?”
Example: Fast Food Chicken Restaurant. When asked about his UCDs, this business owner could not find anything that he did differently than any other fast-food restaurant. But when asked what happened in the business every day, he went on to explain that the team arrived at 5:00 am to scrub the entire facility, and finished at 10:00 pm because they did it again at closing time. They did this because cleanliness is important to customers buying chicken. He also went on to say that it was important to be open early to take delivery of hundreds of fresh chickens every day from a local poultry farm. This was important because people like the taste of fresh chicken rather than frozen. In addition, the local farm raised them without hormones resulting in 20% less fat content. All these things were key concerns of his customers. So the business was doing things differently without realising it. And that the things he was doing, while not visible, would strike a chord with customers. He went on to document these differences in his marketing activities. Sales increased dramatically and repeat business soared.
Make sure to add any new UCDs that come out of the interview to your master list.
Finding your own UCDs …. ask your customers
Asking your customers why they decided to buy from you can be helpful because your perception of why people buy from you and the experience they have doing it can be quite different from theirs.
Ask them questions (in a group meeting, one-on-one interview, or survey) such as:
“Why did you decide to purchase from us?”
“What differences did you notice between our business and other providers of the same product / service?”
“What were the top three things that mattered most to you when you were selecting which business to make your purchase from?”
“Were you happy with your experience purchasing from our business? — What can we do to improve the experience for you?”
Example: Property Development Company. The company knew the major reasons new tenants would move into its townhouse complex was for the facilities (pool, play area, tennis court, security patrol), and thus used the facilities as the focus in their marketing. However, the new occupancy rate was sluggish. When the company asked the few tenants why they had moved there, they said it was because the townhouses had three bedrooms, were new, and cost the same as older, smaller apartments in the area. Since it wasn’t the facilities that potential tenants were looking for, promoting them wasn’t hitting their hot buttons. When the company changed their advertising and placed those three considerations in the headline, the complex was fully occupied within two weeks and had a waiting list.
Finding your own UCDs … finalising the list
After you add your team’s ideas, your interview responses, and your customer’s input to your UCD list, it’s time to look at each item on the list and ask the question: “Is this true or not, and would my competitors say the same thing?” Be honest! It’s not going to help you to not be realistic about what you can and can’t do.
Cross out anything that doesn’t really differentiate you, or doesn’t provide a customer benefit or address a frustration. Now you can finalise your UCD list.
Making your UCDs the core of your business
In "Built to Last: Successful Habits of Visionary Companies", James Collins examines the differences between directly competitive companies and points out that some of them outlast, outperform and outrun the competition. He says these “built to last” companies have a central core that is the basis upon which all business decisions are made … this is what differentiates them.
Once you have established your UCDs, you must then make them a central focus of your business. Your products, services, and the way you operate should all be guided by what you’ve promised in your UCD statements. And when you’re faced with a difficult business decision, you can go back to the “core” for guidance.
Shout your UCDs from the rooftop
The final step after you’ve created your UCDs and integrated them into the business is to make them the focus of your marketing efforts. The mistake most businesses make is that they don’t include UCDs in their marketing; they focus on the “features” rather than the benefits, and expect customers to buy just because they are in the marketplace and are saying, “Buy from us.”
Take charge of the situation, and make sure that everything you put into your website, advertising, promotions, signage, brochures, stationery, delivery vehicles, shopping bags, etc. clearly articulates exactly why you are unique and why potential clients should buy from you. If you don’t, they’ll make their buying decision based on something else … something that might lead them elsewhere.
What have we learned?
Let’s summarise the key points we’ve talked about:
1. Perception is the reality. People buy based on the differences they perceive between competitors.
2. You must make your business stand out by developing and communicating your Unique Core Differentiators.
3. Unique Core Differentiators (UCDs) are those things that clearly articulate what makes you different, and target customers’ concerns, frustration and desires.
4. There are three types of UCDs: Actual, Created and Perceived.
We've also discussed:
1. To find your UCDs you need to talk to your team, have someone outside the business interview you, and get input from your customers.
2. Once you’ve come up with your UCDs, you need to make sure they are the focus or “core” of your business.
3. The final step is to ensure that all of your marketing efforts clearly articulate why you are unique and why customers should buy from you.
Next Steps
To apply what you’ve learned to your own business, create a detailed action plan that will take you through the steps of developing, integrating and communicating your UCDs. An important thing to remember as you are going through these steps is to be completely honest with yourself about your capabilities. You will have trouble feeling comfortable in promoting a fictional story, and trouble growing a business whose actions do not support their claims.