Differentiation

By: Shawn Jooste
Submitted: 2007-01-17 15:15:17
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“Some contend that differentiation is nuts – bad for moral” – Jack Welch

We get taught from a very young age that differentiation is bad, and that people’s feelings can get hurt, and people will be upset. But this leaves us in an emotional rollercoaster.

Business is not about emotion, it’s about money and making it. It’s about being the best, beating your competitors, and succeeding. Yes, it doesn’t mean we should be cold hearted, but we need to be driven by the goal, making money, not by emotion.

If we work on an emotional level, we should join some non profit organization, that allows us to work on emotion, and caring for others.

I see two places for differentiation. The first is inside our business. We cannot treat all our employees the same, because they do not all perform the same. Some employees perform much better than others, and should be rewarded for that.

You see, as owners of a small business we have very little resources to throw around. We need to make every cent count. So employing someone who does not perform is a complete waste, and we should rid our businesses of them as soon as possible.

However, when we have an employee that does perform they should be rewarded. Rewarding those that do perform and removing those that don’t is a great way for us to build a winning team. Obviously those that do not perform, when they are not rewarded will feel hurt and upset, but that’s just tough luck, they should have tried harder.

The second place where we would be wise to implement differentiation is with our customers. We are all kept busy all day long, providing a service for our customers. We try to deliver faster, be better and offer cheaper prices. This is all good, and it’s what we should be doing.

We all have customers that end up being a complete waste of time. You know what I’m talking about. That customer, who asks for 10 quotes, spends 2 hours on the phone to you discussing every little detail, and then pushes you for the best price. So you end up spending an entire day on one client and make barely make enough money to buy a double cheeseburger.

We need to begin to differentiate between our clients. The best way to do the obviously is to keep a good record of our dealings with each client. Then we need to make some time to look at the results and decide who is our ‘worst’ client. Which client, takes the most time and makes the least money. Then we also need to assess which client is our most profitable client, and reward them. Buy them a bottle of wine, or a bunch of flowers, give them some discount off the next invoice, take them to dinner, but do something to show them how special they are, and that you appreciate their business.

As for the client at the bottom of the list that doesn’t make you money, inform them politely, that you are unable to provide them services, tell them why you have made the decision, and tell them that you simply just cannot accommodate them anymore.

Now this will leave you in a very interesting position. Your client will either go away, yes the will probably be a little upset, who the hell are you to tell them to get lost! Or your client will come back to you and be prepared to pay more for the service you deliver. If they go away they have created a new gap in your business for you to accommodate a new customer, who from the beginning will pay a better price, and you can lay down the rules.

Buy working on this theory, you will eventually over time create a business filled with good customers, that pay well, and don’t waster your time.

Shawn Jooste is a business owner who has interest in many on and offline businesses. One of his sites www.smallbusinessideas.co.za is a collection of ideas, articles and resources for small businesses.

Article source: Expert Articles

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