Differentiate your organization from your competitors | Ennova

Today's CX blog is a pink cocktail mixed with Barbie, differentiation theory, behavioral research, and missing stilettos. All mixed for you, dear reader, so you can ask yourself this question: Do you know how, in your company, you differentiate yourself from the others in the market? That is, what customers think differentiates you from the others. Not what you think or want. And do you know that the answer is (probably) guided by some basic behavioral biases in us as humans?

While you think about the answer, let me share a bit of my private life with you. As I write this, I am home alone. I'm looking in vain for my daughter's missing Barbie stilettos. Two-centimeter-long transparent plastic Cinderella-style stilettos. Lost in a sea of dolls' clothes. I am mildly annoyed with Mattel. Whoever thought of producing such a small toy and making it transparent so that no parent can ever find it?

As I look, I am listening to Danish Broadcasting Corporation's (DR) intellectual stronghold, “Deadline.” Last night DR dedicated the show to the latest blockbuster movie, Barbie. Three of Denmark’s strongest social debaters Clement Kjaersgaard, Bodil Skovgaard, and Anne Sophia Hermansen discussed what the new Barbie film means for gender and equality. A great debate.

Full disclosure: I think Barbie dolls are rubbish. The tactility and collectible-quality seem questionable. I don’t understand today why Barbie is cool and didn't understand as a kid either, when my older sister tried to make me play with Barbie. She could forget about that.

Despite all my complaints and lack of understanding of the Barbie universe, I am deeply impressed by Mattel’s ability to get their product on the global map with the film and the whole massive universe they have created around it. Mattel has reportedly invested more in marketing the film than in the film itself. In 2023, Barbie seems omnipresent. It boosts the debate on gender equality, gender, patriarchates versus matriarchates, and our growth as human beings and the search for identity. Up to the highest intellectual level on Deadline.

Never have I paid more attention to Barbie. But I am not the customer. My daughter is. And she hasn't seen the film. Or Deadline on DR.

All the adult talk for and against Barbie (both my categorical attitude and more nuanced intellectual debates on Deadline) may not matter so much when it comes to why a child chooses to play with Barbie dolls rather than one of the alternatives. Why do existing customers (children) choose playtime with Barbie rather than an alternative? And what makes them buy more dolls for their collections with their pocket money or wish for more Barbie dolls for their birthdays?

The Customer's Response May Surprise You

You might get some surprising answers if you ask them. Answers that don't have very much to do with all the fuss surrounding the Barbie universe these days. My experience with (adult) customer responses in both B2B and B2C tells me that there are usually surprises that lurk.

And that’s exactly why I always recommend to the companies I advise on customer analysis that they learn more about how existing customers view them.

The disappointing reality for many is that what customers think differentiates the company/product from the rest, is not what the company wants to differentiate itself on. Maybe because they think of differentiation as a classic part of marketing and sales. However, what existing customers versus potential customers think can be two very different things.

A classic example I often see involves sustainability. That is, the company's desire for customers to choose them because of their strong profile in sustainability. Your marketing department may have spent a lot of resources branding your green profile. Your engineers have spent sleepless nights over how to reduce power consumption in production. In the warehouse, they struggle to reduce the amount of packaging. This is all good and important. However, when you ask existing customers, there is a high probability that very few cite sustainability as a reason for using the product. Not because they are against sustainability. But the competition can also offer sustainability. Most often, there are other things at stake.

Let’s delve a little deeper. We will start with a trip down memory lane for strategic business theory.

Differentiation is Important

Differentiation is important. It has always been important. Theodore Levitt – a true beacon of strategic theory – already had wise words to say about it in his article Marketing Success Through Differentiation—of Anything as far back as 1980. Here is one of his important arguments that differentiation is always part of the recipe for success. Whether you are in B2B or B2C. Whether you sold soda in competition with the Coca-Cola Company in the 1980s or traded steel plates for the German automotive industry. One compelling quote from the article is:

The usual presumption about so-called undifferentiated commodities is that they are exceedingly price-sensitive. A fractionally lower price gets the business. That is seldom true except in the imaginary world of economics textbooks In the actual world of markets, nothing is exempt from other considerations, even when price competition rages.

The article could have been written today. Perhaps using other terms, or other examples. But the essence is the same. He argues that you should understand the product in broader terms, including everything around it. We would say the same thing today, but talk about the customer journey in the broadest sense. When did you last (re)visit your customer journey, by the way?

All in all, nothing new under the sun. Differentiation was and is important. Therefore, you should know whether:

Do customers see that you differentiate yourself clearly from others?

If so, how do you differentiate yourselves?

If not, why can't they distinguish between you and the others?

My path to acquiring that knowledge is through surveys. Qualitative as well as quantitative. Depending on the context. But you can probably also find other data sources, such as behavioral data.

You may be surprised to see the results of your surveys. Let me share four lessons I have learned. What these lessons have in common is that they remind me of well-known biases from behavioral research.

What Attracts Customers is not What Makes Them Stay

A customer may have become a customer because she saw a nice advertisement about your sustainable products. However, this is often not what makes the customer stay. The relationship is now established. Experience gained. She knows what she has. She doesn't know what she will get from switching. In behavioral science, we talk about “loss aversion.” In everyday speech: better a small fish than an empty dish. It is said to be one of the strongest biases we have as humans. Evolution has designed us to be reluctant to take risks (e.g., switching to a competitor) because it increases the likelihood of survival.

What might this mean in practice: That marketing might consider different communication to potential versus existing customers?

Relationships between people. Personal relationships are often more important than many people expect. Especially within B2B, personal relationships are often a major reason why a customer thinks that you differentiate yourself from the competition. Behavioral science speaks of the “familiarity principle.” The more you are with someone, the better you (usually) like them.

What might this mean in practice: Invest in nurturing and maintaining the personal relationship. Perhaps it can redefine elements in the account manager's work – shift focus to more relational work and a less fierce focus on combination sales and upsells?

The latter gets (too much) attention. A behavioral bias that may be at stake here is called the “recency effect.” In short, the most recent events are the sharpest in our memory and overshadow previous experiences (which may be more important, rationally speaking). There is a good probability that the customer’s latest experience is, e.g., customer service. Therefore, the customer highlights it as where you set yourself apart from the others.

What might this mean in practice: Perseverance and continuity. Being able to differentiate yourself from others by ensuring a consistent, continuously good customer experience.

It becomes truer over time. As time goes by, customers will increasingly feel that they have landed in the right place. Sometimes I see customer comments portraying almost a family relationship, where the customer “stands together” with the company against the others: The clients have become ambassadors for the company. One contributing factor may be confirmation bias – i.e., people's tendency to retroactively attribute positive qualities to the chosen brand while devaluing the brands they did not choose (and unconsciously downplaying negative characteristics of the chosen brand/product).

What might this mean in practice: Ensure that you continuously confirm to customers that their original choice of your product is still right for them.

So with a pink cocktail in hand, ask yourself again: do you know how your customers think you differentiate yourself from the others?

In reality – not just the way you would like to be seen. It matters when it comes to how you should approach existing versus potential customers.

By the way, I still haven’t found the transparent Barbie stiletto.