MBA2591 Q&A Wednesday: Is It Really Necessary To Differentiate My Service? If So, How?

0:00How do you stand out in a crowded market? Is differentiation just a buzzword, or is it the key to long-term success? Today, we're answering Kaito's question all the way from Japan. If you're struggling to find your competitive edge in a competitive market, you're going to want to stick around, because I'm going to break down if differentiation is even important. Do you need to do it? And if so, how to do it right?

0:27Welcome back to the$100 MBA Show. I'm your host, Omar Zenhom, where I bring you practical business lessons three times a week, Monday, Wednesday, Friday, to start, grow, and scale your business. Today's episode is Q &A Wednesday, where we answer a question from one of our subscribers, one of our listeners, one of our viewers, and it comes from all the way from Japan. Kaito has a very important question. Is it truly necessary to differentiate my service? I can use your advice if I need to do this. Dory, I got your back, and I'm going to give you real life examples from my own experiences, for my own businesses, and how I use differentiation to be able to stand out in a market that's quite crowded.

1:06So let's start with the importance of differentiation. Differentiation isn't always necessary, but it's almost always helpful. If you're entering a market that's massively underserved, I'm talking about customers are knocking down your doors to buy your products or services. If you're in this kind of market, and you're solving a real pressing problem, then differentiation is not maybe the most important thing you need to worry about. For example, in the early days of Uber, they really didn't differentiate because they were the only rideshare company out there. The only alternative was a taxi and it was like so much better than a taxi.

1:41So they just had a very basic service and they really didn't differentiate. They had a hungry crowd of people looking for what they are offering. Now, there's so many different rideshare services out there globally that now Uber has differentiated and there's all these different kinds of Ubers you could take and different kinds of options that even have bikes now and all kinds of things, right? You can schedule an Uber. But the point here is that they only started differentiating when the market got crowded. So when is it necessary to differentiate? Well, in most markets, I think it is necessary.

2:14You're repeating with established players already. You need to stand out. And this allows you to have long-term growth. Differentiation helps customers choose you over alternatives because of your unique selling proposition. Unless you're so innovative and you have no competitors in the market, you should differentiate. By the way, if you don't have competitors, you have bigger problems like educating your potential customers what you actually do. You're so new and different, it's hard to break into that market because people don't know or have never heard of what you provide. So if your market is crowded or just has even a few competitors, differentiation isn't optional.

2:52It's survival. Let me give you a real life example of how I differentiated with my software company, Webinar Ninja, which I grew for 10 years, over 30 ,000 users. And then we eventually got acquired by ProProfs. When we launched Webinar Ninja 2014, we weren't the first webinar software on the market. We had big time competitors. There were a handful of the time, but it was enough that people were shopping around. There were big players like GoToWebinar. So what we did differently is that we created a unique selling proposition, something that we focused on that made us different and special and unique in our own way.

3:30We focused on ease of use. A lot of our customers are small business owners. They run small teams and they're not, you know, a programmer. They're not super, super tech savvy. A lot of these other softwares are super complex. They were clunky and they required hours of training. Webinar Ninja was simple. It was easy. One of the number one things people would say about Webinar Ninja is that it was the easiest software they ever used. Not the easiest webinar software, but easiest software, period. We also integrated features like built-in email reminders and templates, things that other softwares made you pay extra for or you would have to use another bunch of softwares to make it happen.

4:10The result was that by solving the pain points our competitors ignored, we carved out our own little niche in our space in the marketplace. And people that value those things, ease of use, all-in-one tool, something that is user-friendly, people that value that stuff would come to us. Your differentiation doesn't have to reinvent the wheel. It just has to solve a specific pain point better than your competitors. Meaning your unique selling proposition doesn't have to be earth-shattering innovation. It just has to address different needs that the competitors are not addressing. So what are some of the ways to differentiate your service?

4:49Number one, solve a specific pain point. This is where you have to talk to your potential customers and really try to uncover what frustrates them about their existing solution to the problem. They're probably trying to solve this problem right now with an existing solution, the existing method. What's frustrating about trying to solve their problem in this way? From that feedback, you could build your service around fixing those issues, those frustrations. The second way you can differentiate is focusing on a niche audience. So instead of trying to serve everyone, specialize in a specific group.

5:23By doing this, you can address those specific people's needs. So for example, if you're a fitness trainer, you can specialize in post-pregnancy recovery. So your niche are new moms. While everyone's trying to serve everyone, you're actually serving a specific group with specific needs that you can address. So these people will value your product or service more because you're talking directly to them and helping them better than the company or the service that's trying to cater to everybody. The third way you can differentiate is customer experience. Make working with you an absolute joy, an absolute delight.

5:59Offer fast response time, personalized service, or even just a better onboarding process when they start using your service. This is something we're really focused on in Webinar on Incha. We still do this today at the$100 VA. Customer support was one of our backbones of the brand. A lot of people signed up because they saw how quickly they got an answer when they contacted support, just asking questions about the software. Within 30 seconds, they got an answer. That's pretty impressive in our space. The fourth way you can differentiate is pricing or packaging, offering maybe flexible pricing plans or unique bundling that other competitors don't.

6:35So for example, at Webinar Ninja, the prices of our subscriptions changed based on the number of attendees you wanted to have on your webinar. So if you're just getting started, why are you paying so much money? You can have less attendees and pay less. This made sense for us because as our customers grew and their webinars grew, they paid us more. And they were happy to because they're getting a return on investment. Fifth way to differentiate brand personality. People buy from people. showcase your unique style, your values, your story behind why you built your business. This really connects with your audience.

7:08And a lot of times people just say, I like these people. I want to buy from them. Differentiation doesn't mean doing more. It means doing what matters better. Now, I want to talk about keeping your differentiation simple. There's a power in simplicity. For example, there's a company called Basecamp that's like project management software. We use it in our company. They have a very simple and streamlined software. Basecamp didn't add every feature under the sun to kind of compete with the other project management tools. Instead, they focused on being simple and effective. And it works because I can't imagine switching off Basecamp because I've tried other project management software and it's good at all, but it's just too much.

7:49It's complex. It's confusing. And whenever I bring somebody on my team, there's such a huge learning curve. With Basecamp, they pretty much get it within a day or two. Complexity confuses, simplicity sells. One of the pieces of advice I give my students all the time is that a confused mind never buys. So Kaito and everybody else who's listening, here's the bottom line. Differentiation isn't always necessary, but I believe it's really a good way for you to be above and beyond better than your competition. It's definitely required if you have many competitors in your market, I would say two or three or more.

8:30Start by identifying the pain points of your customers, focus on a niche, you know, a subset of your customers, and create a standout customer experience, a wow experience that makes people compelled to tell other people about that experience. And remember, it's not about doing everything. It's about doing one thing better than anyone else. And that's going to be the reason why people come to you. Thanks for tuning into the$100 MBA show. If you want more strategies to help start, grow and scale your business, just go to 100mba.net for your name and email address in any of our forms, get some of our freebies and be part of our newsletter.

9:09And don't forget, if you've got a question that you want to submit here on Q &A Wednesday, go to the website 100mba.net mba.net slash Q and submit your question. And I'll see you in the next episode.