How To:
Do Differentiation Differently

Comment on this newsletter at yastrow.com

I received a number of calls and emails about the last issue of this newsletter, Do Differentiation Differently, resulting in some interesting conversations. The main idea of the last issue was summed up in this line: Your customer doesn't really care if you are different. But he will be blown away if he sees that you think he is different.

How do you do this? In this issue I want to follow-up on this idea and talk about specific steps to do differentiation differently.

First, make the Big Flip

Marketers and sales people have, for their own convenience, learned to "lump" customers into clusters, or segments, that make the job of customer communication easier. After all, it's certainly easier to write one ad aimed at "males 18-34 who like to watch sports and drink beer" than it is to write an individual ad for each of those males.

This kind of customer grouping is necessary for mass communication, but it creates an undeniable compromise: Every time you try to say the same thing to more than one person at a time, you are inevitably diluting the relevance of that message to an individual person.

If advertising or other mass communications were the only marketing and sales tools your company could use, then you would be stuck with this compromise. But most of us aren't stuck like this; we have many opportunities for one-on-one communication. These one-on-one customer encounters might happen on a retail sales floor, a customer service line, a sales call, at a cashier's counter, etc. The real question is this: In one-on-one situations, does your company communicate one-on-one, or are you still in mass communication mode?

To differentiate customers, you need to flip your view of customer segmentation on its head. Remember, when you organize customers into "homogenous" groups it is for your own convenience, not for the benefit of customers. Don't only look for what makes customers the same. Look for what makes each customer different.

Talk about this within your company. Whatever your job role or level, you can be a leader on this idea by championing the cause of customer uniqueness. Make it your mission.

"Spices"

It seems like a daunting task to recognize what makes each of your customers unique. After all, human beings are very complicated animals, and each of us is a one-of-a-kind creation.

Fortunately, to recognize what makes a customer unique, you don't need to know everything about that customer.

Consider that all humans share 99.9% of their DNA. This means that, genetically, we are only one one-thousandth different from each other. The fine details make each of us special; if you want to understand "the whole person," you can ignore 999 out of a 1000 things and find the 1 in a 1000 that is unique.

To understand this idea, imagine that you were asked to contrast the characters of two historical figures by analyzing two 5000 words biographical essays, one on each person. Imagine that 4995 of the words used - 99.9% - are the same in both biographical essays, but five words - 0.1% - vary between the two. Here are the five words that appear differently in both essays.

To understand the historical figure who is the subject of each biography, wouldn't it be important to focus on these five characteristics? To understand what makes each person different from the other, would you start with these words? These five characteristics would influence much of what defines each person.

The same holds true with your customers. To understand what makes an individual customer unique, you need to focus on the blend of characteristics that distinguish him from other people.

But this is not how most companies work. Traditional methods of customer segmentation and procedure-driven service models teach us to look for what makes groups of customers the same, so we can make the process of marketing to them and serving them easier. It's as if we're ignoring the five words that are different, because it's too hard to keep track of them.

Flip it! Focus on the unique details, not just the shared characteristics.

At Yastrow & Company, we refer to these details as the "spices" that define a customer. Just as a small amount of spice can flavor an entire dish, a seemingly small detail can have a major impact on your customer's uniqueness. Notice the spices!

Finding the spices

One of the very most important things a front-line employee of your company can do is spot a customer's spices (By the way, "front-line employee" doesn't just have to mean an hourly employee. The top lawyer in a law firm, the top surgeon in a hospital and the top sales person in a company are all front-line employees, because they meet customers face to face).

Does your company encourage front-line people to spot customer spices? Do you tell your employees that identifying the unique characteristics of individual customers is one of the most important job tasks they have? Are they trained to do this? Do they have time built in to their customer interactions to learn about customers, or are they only taught to talk about the company's policies, products and procedures?

Customers show their unique characteristics most readily during one-on-one interactions with your company. Just imagine if your front-line people were ready, willing and able to take note of what customers are showing. Just imagine if this were your most important - and most successful - training initiative.

Remember the spices

If a front-line employee learns something about a customer, is there an easy way for the employee to record it, so the company has a way to remember what has been learned?

"Corporate memory" is critical to doing differentiation differently. Do your systems and processes enable your corporate memory? In many companies, Customer Relationship Management (CRM) systems become nothing more than databases used to accomplish the same-old marketing segmentation trick of lumping people into big groups for the purpose of marketing initiatives. How can you use these systems for their best purpose, remembering the unique spices of individual customers?

Retrieving the spices

I was interviewed by a magazine a few years ago and was asked to talked about the challenges of merging the CRM systems of merging retail companies. I said that the merging of software and hardware was the relative easy part, and that the IT geniuses would figure out how to get the information to travel thousands of miles to each store and back again to a central server. The hard part of CRM in a setting where front-line employees meet customers is the last 30 feet, getting relevant customer information out of the store's point-of-sale (POS) computer system and into the mind of a sales clerk.

Put customer spices in the hands of your front-line employees! Make it easy for employees to know what makes individual customers unique.

Sprinkle the spices

There is a reason that a spice bottle will last a long time in your kitchen cabinet before being finished: You don't need to use much at one time to make a big impact. Take a bland pot of soup, add a small measure of spice, and - voila! - the entire pot tastes better.

The same holds true when you use the spices you've learned about your customer. Sprinkle in just a little bit, and your customer will sense that you really understand her.

• If you run a breakfast restaurant and you remember that one customer likes his toast order to be one slice of rye and one slice of wheat, and you deliver it without making him ask for it, you will have done differentiation differently.
• If you are a lawyer and you remember that one client is over-anxious about a particular type of risk, you can pay special attention to that concern, and you will have done differentiation differently.
• If you are a graphic designer and you learn that a client is particularly concerned about staying ahead of a certain competitor, you can watch that competitor's website and promotions, and keep your customer informed about what you learn. You will have done differentiation differently.

To recap, use the following steps in your company to do differentiation differently:

• Make the flip from seeing customers only as members of somewhat-homogenous groups to seeing them also as unique individuals, with "spices" that represent the details that define them.
• Make the spotting of spices to be a key function of everyone in your company who has customer contact.
• Do whatever you can to ensure that your internal systems are set up for "corporate memory" that are designed to remember the spices of individual customers.
• Sprinkle the spices in your interactions with customers by demonstrating that you recognize and remember what makes each customer unique. A little spice goes a long way!

Join the conversation! Comment at yastrow.com
steve@yastrow.com
P 847 686 0400

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Do Differentiation Differently: The first newsletter on this topic.

Meeting a Potential Client for the First Time: Amid other useful tips, Steve explores the concept of using "spices" in a first encounter.

The Differentiation Ladder: Steve asks, "What do you want to know about your customers?" and gives advice for moving up the differentiation ladder in your customers' minds.

The connection between customer beliefs and profit: It doesn't matter what you do. It matters what your customers do.

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