Differentiation … The Elusive “Sales Proposition”

“I’ll make a Xerox copy of the document for you and be right back” …. How many times have you, or one of your associates, made that statement. We associate making a copy of a document with Xerox the same way we associate Kleenex with tissues. While these monikers are more prevalent for people over 50, I still hear them today.

From a marketing standpoint it is a dream to have a hard differentiator like Xerox or Kleenex. In the late 1980’s Coleco introduced the family of dolls called The Cabbage Patch Kids and every parent with a pre-teen daughter was willing to pay well over list price to get one to place under the Christmas tree that year. In the early 1970’s Gary Dahl had a brainstorm to take a small rock, place the rock in a box with air holes (so it could breath) and insert a pamphlet into the box on how to take care of your rock. He called it “The Pet Rock” and put a list price tag of $4 on it ($18 in 2012 with inflation). He sold millions!!!!!!

J.K.Rowling has energized more of our children to want to read for pleasure with her series of Harry Potter books. Microsoft has transformed the computer industry. There are many examples of products that are so unique that they capture the market with seemingly little competition.

Similarly, many companies that developed such products that created these high demands have had the “luxury” not to have to pay much attention to their customers, and their needs, as sales boomed. Xerox, for example, did not pay much attention to customer service or cost effective manufacturing techniques in the 70s and when Japanese companies entered the market with a superior product offering in the 80’s with a very attracting price point it almost put Xerox out of business.

Unfortunately most companies do not have the luxury of having this type of product uniqueness and therefore struggle with how they differentiate their product offerings in the eyes of the customer.

I have had the opportunity to perform many customer satisfaction surveys for companies that do not have hard differentiators and the response from the customer base is always the same, even if the words are different.

Poor quality, poor on-time delivery, long lead times, long response time for requests, supplier indifference, get lost in a phone tree and can’t get to a live person, they never call me back, lack of professionalism, no flexibility, arrogance, poor technical support etc. are often listed. The list goes on and on.

The problem is that most companies do a very poor job on paying attention to the soft differentiators that can make all the difference in their value proposition. As a general statement we have all become accepting of marginal customer service. When finishing a meal we tip 15% – 20% even if we do not get the best of service. We become creatures of habit even though TIPS in an acronym for To Insure Prompt Service.

I was conducting a customer service seminar recently and went around the room asking each attendee for an example of both exceptionally good and bad customer service that they have experienced. It was interesting to look at the body language and tone of their voices when they recanted each experience. As they described their exceptional experience they were excited and smiling and, as you might expect, you could actually hear the anger in their voices as they reflected on the negative examples.

Referencing both those positive and negative feelings, I drove the point home that this is exactly what their customer feels when they are subject to various levels of poor customer service.


If a company expects to penetrate a market in the absence of a “hard” differentiator it must measure all the elements that make up the total output of the goods and services that the corporation is producing.  They must view their company from the customer’s standpoint and measure their performance on each of the key “customer needs”.

Diagram 1 below is an abstract view of a typical company. Customers have needs, whether it’s on time deliver, a quick response to RFQs, lead times, or the like, that go well beyond the product/service they are in business to deliver (red box) and each need can be measured. 

When we discuss needs, if the ultimate goal is to optimize the needs satisfaction of a customer there are two different types of customers to consider which are the external customer and the internal customer.  The internal customers are the company departments (Finance, Operations, Quality Control, Human Resources etc) and the needs of these departments. Simply put, if you can’t satisfy the needs of your internal customers you will never be in a position to satisfy the needs of your external customers.

Once you identify the key needs of your customers you can then look inside your company to determine the process required to optimize each customer need.  If “shorter lead times” is the need in question (Need 1), what are all the elements of the corporate process that pertain to “on time deliver”?  Once you map out the entire process you can begin to measure the key elements of that process. For example, the very start of the process is “order entry”. You can easily measure how long it takes from the time the order is entered until it is scheduled to be produced. I have had clients where this part of the process took more than a week. 

Analysis Paralysis

The first reaction I get when measurement is discussed is negative.  Companies do not want to measure anything, and the usual comeback is .. “We do not have the time!” I assure them that if only the key items that make up each process are measured they will not be inflicted with analysis paralysis.

If a company wants to improve their value proposition they must measure the key elements of their value proposition. If a company wants to really enhance the customer experience, the output, they must measure each element of the output. As a whole, this defines their product.


Once the management team determines that the total corporate output is, in fact the company’s product, this is the first step in achieving differentiation. As the corporate culture focuses on optimizing the performance of each element of the output, differentiation will clearly identify itself in the form of shorter lead times, improved on time delivery, and the like, all of which are easily quantified.

Market penetration will be greatly simplified once this happens because competition will not be in a position to compete.

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