Differentiation seems to be a hot topic in an ultra competitive marketplace. It is something with which everyone, from sales person to manager to business owner, has to be concerned. So what does differentiation mean to you? Why is it important to differentiate yourself in the marketplace? What is the difference between differentiation and expectations?

Differentiation means something different from one business to another. The key for your business is to determine what sets you (or your business) apart from the competition in your industry. Don't fall into the trap which so many businesses struggle. Why? Let's pretend that you are in an industry with no differentiation. Here is what happens when there is no differentiation between competitors:

1. The product for sale is viewed as a commodity (hint: this is what purchasing agents get paid to do).

2. When products are viewed as a commodity, the only factor considered in the value equation is... PRICE!

When purchasing agents and buyers succeed at commoditizing products, the outlook becomes grim for the competing businesses. Opportunities to provide value are eliminated, and the competition immediately turns into a race to the bottom game - whoever can get to lowest market price and still stay in business wins. This is not a game you want to play because nobody wins! It isn't good for your business, your industry or the economy.

The way to avoid the situation of competing on price alone is with differentiation. In other words, you need to provide a value proposition that the competition can't. Let's examine some ways to differentiate your business.

Differentiation vs. Expectations

The biggest mistake we see people making is when they mistake an expectation for a strong differentiating factor. Here is an example of an expectation. An ad for a computer services company said that their differentiating factor was "they provided the best service." How can you claim to have the best service when that is a matter of opinion and will vary from customer to customer? Additionally, good service should not be a differentiator; it is an EXPECTED component of any company. What this company should have relayed as a differentiator is something like this: "Our real-time preventative maintenance software allows us to find problems before they happen, so you don't have to worry about any down time or lost work." This relays a clear message of how hiring this company would benefit your business over a competitor's. Which company would you chose to work with? The answer is pretty obvious.

Remember, when you are meeting with customers in person or over the phone, they are always wondering, "Why should I do business with your company over someone else?" Make their job easier, and give them a clear reason why you deserve the business and why you are different!

How To Develop or Determine Your Differentiating Factor

Now that you know the importance of differentiation, you need the tools to implement your differentiation factor. The easiest way to accomplish this is to ask yourself, "What do I do better than my competition?" Or "Why do my customers choose to do business with me?" Your answer may indeed be that you provide a better service; however, what your customer needs to know is what VALUE better service provides to them.

There are three ways that you can provide value to your customer base:

1. You

2. Your company

3. Your product or service

Once again, the differentiating factor is not just you, your company, or your product, but what value these three provide the client.

In sales, differentiation is one of the simplest concepts to apply, but ironically, it's also one that is often most overlooked. By having strong differentiating factors, not only will you be giving yourself an EDGE over the competition, you will also avoid falling into the price competition trap.

Henry Pellerin is a real-world, in-the-trenches sales trainer with over 17 years of sales training and sales management experience and a long results-driven track record. Henry is co-author of The Strategic Selling Process and the founder of VantaEDGE(TM), the company that specializes in unique sales training courses which have proven to increase sales force training retention by 93%.

Henry took his sales training and in-house sales experience and developed processes and systems that are highly effective and custom-designed to meet the specific objectives and unique needs of each individual organization.

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