Sunday, July 11, 2010

The importance of being different and communicating it to the customer

The importance of being different and communicating it to the customer.

Let’s say that you need to paint your car. Puerto Rico is an island so lots of people live very close to the beach and as you all know, salt is the enemy of metal and many cars show the rust that affects the car. You go to the yellow pages or to the internet to look for a reputable body shop with a good offer and lo and behold, what would you find?

There are more than 200 body shops in Puerto Rico more or less. You start looking for ads that attract you, ads that convince you that you should give that body shop a try and you don’t find any that stands out. They all say things such as “ We are here to serve you”, “we do all kinds of body work”, “computerized estimates”, “Chassis specialists”, “Fair Prices” “oven painting”, “we deal with insurance companies”, etc. etc. etc. In summary, all the ads look alike and there is little differentiation, which is the reason why
I am writing this column on marketing.

First of all, everyone must realize that 200 body shops mean that there are more body shops than we need. If divine justice worked perfectly, and all the cars involved in accidents were divided into all the body shops in the island, we know that they couldn’t survive. So, for any body shop to survive, it needs to take business away from other body shops.

I bet that if we did a study, the Paretto principle would work in this situation. For those of you that don’t know the Paretto principle or have forgotten about it, it is also called the 80/20 principle. It says that 20% of all the body shops in Puerto Rico do 80% of the repair business. It says that 80% of all the accidents are caused by 20% of the drivers. 80% of all the sales in a company are sold by 20% of the salesmen and the other 20% of the sales are sold by 80% of the salespeople. 20% of the people commit 80% of all crimes. This principle has stood the test of times and it is amazing, even uncanny, how it works.

The challenge for every repair shop in Puerto Rico is to become part of the 20% that will do 80% of the business because if it doesn’t become a part of this elite group, it will go out of business. We can also say that in five years, only one out of five body shops in business today will still be in business.

What can a body shop or for that matter, any other types of business do to become one of the successful ones? This is not an easy question and the answer is quite long and complex. We can ramble out some answers right here: Offer great service, do quality work, be well capitalized, be well managed, have good marketing etc. In this article, I want to concentrate on one aspect of marketing, one that is very important for businesses to understand no matter what field that business is in.

I am referring to the Unique Selling Benefit or the Unique Selling Proposition as it is also called.

The ads I looked at in the Yellow Pages didn’t convey a unique selling benefit in most of them.
What is a USB? A unique selling benefit is that distinct, appealing idea that sets your business apart from every other competitor in your marketplace.

Pay attention to this, your entire marketing and operational success should be built upon your Unique Selling Benefit.

Your USB may touch any part of the marketing mix—price, service, quality, or even uniqueness. But it must be very clear to the client what your USB is. Most businesses don’t understand this concept.

There are many examples of USB’s. Let me share a few with you so that you may get an idea of what your own USB might be.
Some companies position themselves as having the best selection or the broadest range of buying options. Their USB is “ Broad Choice”
Other companies do not have as many options but their USB is “lowest prices” or “lowest mark up”.
Other companies may decide they don’t want to be known for just price or range of options, so instead they offer excellent quality at a higher, but reasonable price. Quality or exclusivity—even snob appeal—is its USB.
Still, another company may offer a product at average prices but their distinct selling appeal is that they offer an excellent service or a super guarantee.

The possibilities for building a USB are unlimited. A business, though, should communicate a USB that addresses an obvious void in the marketplace that you can fill and fill very effectively. Be very careful, though: It is a big mistake to adopt a USB if you can’t fulfill the promise.

I would like to describe a curious situation. When you ask a business owner to articulate clearly and concisely in one paragraph or less, his or her USB most business owners have no answer.

A few years ago I met with some executives from a well known super market chain and I asked the President if he knew what his USB was and that if I asked the other two executives in the meeting, would they have the same answer. He said that he was positive that all three would have the same answer. I proceeded to take three pieces of paper and I gave one to each and told them to write it down. They did and when we looked at the answers, they gave three different answers. The President was flabbergasted and couldn’t believe his eyes. I was hired by the way to work with the company.

Why did this happen? Because they had never thought through or analyzed what their real strengths are in the market.

Most businesses have no USB’s, only a “me too” spine less, nondescript, business that feeds solely upon the momentum of the marketplace. There is nothing unique, there is nothing distinct. They promise no great value, benefit, or service---just “buy from us” for no justifiable reason.

Let me suggest a worthwhile exercise for your employees. Ask them what your company’s USB is and you will be surprised by their answers.

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