Differentiation strategy
I am "CA" Atreya (PMP, MBA), the author of this blog. I help businesses in Atlantic Canada achieve their BHAG successfully. You may subscribe to this blog using a feed reader (RSS).
I recently got a cell phone. I did not need one earlier. While I think it’s a great tool, I can only think of cell phones as a mobile tool for communication. All those features ring tones, games, memory, data communication, etc. does not interest me. My only objective of having a cell phone is to enable me to converse when I am away from my office. My notebook handles the data communication part.
Having paid pennies for cellular communication in Asia, I wasn’t about to shell out the big bucks in Canada. Cellular technology is expensive in Canada. And customer service must be a strange phrase to the telecommunication companies in general. For example, in 2004, I was checking out customer wait times for Bell Canada for a study. It took me 43 minutes to talk to a customer service rep.
More recently, a friend who was a Rogers subscriber wanted a new instrument as part of a plan. He was a Rogers customer for the entire initial plan term (3 years I think). After calling Rogers he learnt that he could only get another instrument at no cost if they sign him up as a new customer. But that would mean he would not be able to keep his existing number. Long story short, no one at Rogers was able to meet his requirements even though he has been a Rogers customer. He was also willing to sign another long term contract. Such is the quality of service and emphasis for customer satisfaction in this industry in Canada. I was not going to sign up for this!
But that was before I discovered Virgin. This post is not an ad for Virgin but I am impressed with them so far. They do not charge me for voice mail, 911 dialing, call waiting, system access fees and other such hidden charges. They do not make me even sign a contract. I was put on a monthly plan I was comfortable paying. Talk about great customer service. That one blew me away.
It is a given that as a cell phone company I should be able to make and receive calls. But when was the last time you spoke to a customer service rep and felt like you were talking to a friend? I have rarely felt that when dealing with any other organization.
This led me to think about Virgin’s differentiation. In terms of service, it does not offer anything different. In fact their phone models are not impressive when compared to Rogers and Telus. Its core benefits are the benefits customers already expect to receive. What differentiates Virgin from the rest is their informal attitude when dealing with customers. Virgin is trying to differentiate themselves in other ways in the Canadian market. It knows it cannot win a head-to-head battle with the entrenched players. So it is trying to create a core-benefit that does not exist today. Even their airlines: they are usually not on time and food is passable. Nothing great. But it does some things differently. And that is what differentiates them.
The core-benefits of a courier company in the past was to transport your package from point A to point B. It was expected of any courier company. FedEx decided to create another core-benefit: overnight delivery - and it succeeded. Volvo, Starbucks, Nike and all such successful organizations have expanded what the term “core-benefits” mean.
To differentiate in a crowded marketplace, you need to think outside the “core-benefits” perception. The best part is no one will try to imitate them since what you do differently is not perceived as a core-benefit. Perhaps such an approach will make your customers root for you. I know that I am not moving away from Virgin anytime soon (unless ofcourse they goof up big time!)
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