One of the first and most important tasks for a business is the process of differentiation.
This process is absolutely essential. However, many business owners – showing that entrepreneurial spirit that while a great asset can alas get the better of them at times – want to short-circuit this process.
A little like the Hare in the famous story. This leads them to asking questions such as:
Can you bypass the process of differentiation by simply using better branding, marketing and sales activities [general promotion] than your competition?
And of course this is possible. Indeed good general promotion is essential to business success.
Therefore it follows that reasonable and moderate success can be achieved via sound general promotion techniques alone.
What’s more, when pitted against poor competition, good general promotion alone can be very powerful.
That might be good news for you if you’re lucky and find yourself – for instance – in a market with mostly ‘me too’ businesses and few, if any, stand-out stars.
In this case, it could be that all you need is high-quality and ongoing general promotion to succeed.
Like the Hare, you could start quicker and race ahead of the competition. But remember the Hare soon runs out of steam and so does the short-cutting business owner.
Firstly, the maintenance of effective general promotional activities is challenging. Of course, it requires not only ongoing commitment but also readily available cash funds (and flow).
Secondly, there must be up-to-date expertise constantly available to power this enterprise.
Thirdly and more importantly, the effectiveness of any promotional activities will be greatly increased by strong differentiation.
In crude terms this means that you’ll get much more bang for your buck (resulting in more sales, improved profits and increased cash flow).
Fourthly and crucially, good general promotion “selling” poor differentiation will be forever limited and always open to the threat of competition.
Hence all you need is a competitor to achieve stronger differentiation and they will most likely beat you even with less commitment, budget and expertise.
But such a competitor with equal commitment, budget and expertise will beat you hands down.
And a competitor with more commitment, budget and expertise will crush you every time.
Which is just how it happens as the wily Tortoise may start slowly, investing in the process of creating powerful differentiation.
But once equipped with such differentiation the Tortoise slowly but surely powers ahead, fuelled by a very special asset that keeps on giving and never gives up!
That asset is your differentiation and all that follows from it, giving you the strongest and highest yielding asset that any business can have.
More on how you achieve this next time!