Low Risk Differentiation
There are many differentiation experts and dozens of resources on differentiation. Many of their theories are well thought out and make sense. The disconnect comes when business owners and executives try to make the connection between theory and the real world knowing that a mistake can be disastrous—something most experts fail to grasp.
1. Base the Idea on Insight, Not Market Research
Assuming that you have some experience and expertise in this particular industry and you’ve put a lot of thought into this, start with the idea, not the research. Organizations (and individuals) that depend on market research to come up with the next big idea end up with the next mediocre idea.
Once you have your idea, you can count on the fact that nearly everyone will shoot it down, especially if it’s something that’s never been done before. As Harvard Business School Professor Youngme Moon said, “I have become increasingly convinced that great ideas, novel ideas, original ideas are extremely fragile at birth. Why? Because in their infancy these unfamiliar ideas are often indistinguishable from crazy, stupid ideas. This is why so many of them die a premature death.” Be prepared to go to the mat.
2. Research the Market
Conduct research with the idea of uncovering more information, not necessarily validating your idea. Take whatever you learn under advisement and weigh the information with what you already believe. If you don’t already have an advisory board, consider creating one. They are an excellent starting point for research—essentially a focus group with some expertise.
The ideal form of research is to interview clients and prospects individually and anonymously, starting with a few questions that direct the course, but not the content of the interview. The most valuable results will be dozens of short essays that demonstrate a trend. What you’re looking for is any information that you hadn’t considered.
3. Start Small
Once you’ve considered everything, introduce the product or service into a small market that represents your core target. Don’t offer the product or service free or at a reduced cost, that will only skew your results. Instead, be prepared to offer a full refund. At this point you want to introduce an exact prototype of your idea while flying under the radar. This means no advertising.
4. Monitor and Tweak
Monitor, monitor, monitor everyone that’s using your offering for a period long enough to ensure that the product or service has had an adequate chance to prove itself. Resist the temptation to launch a full introduction after a wildly successful, but short test run. The length of the limited launch will depend on how often that particular type of offering is used. Something that’s used every day will require a shorter test than something that’s used once a week or less.
While the test run is underway, you should be creating a market expansion plan. If all goes well, yo’ll want your next step to be clearly defined and ready to implement. The breadth of that next launch will depend on how much confidence you have in your offering and the test results.
Measure the success, not against competitors’ standards, but again absolute--nearly impossible to achieve---category standards. Every industry has them. If you believe you’ve achieved a standard of excellence, you’ve set the bar too low. Offer something rate, a big idea that breaks down the barriers between providers and consumers in your industry