Differentiation - the purple cow

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Bikky Khosla | 03 Oct, 2012
Have you ever seen a purple cow! I bet you haven't. But what if you see one ... it will surely grab your attention -- very quickly. It's so different ... it stands out from the hundreds of black, brown and white cows. Differentiation means exactly that -- avoiding the trap of convention and creating a unique competitive advantage that helps a business stand out from its competitors and in the minds of its customers.

The 'purple cow' analogy was coined by American entrepreneur and author Seth Godin who emphasized on the idea of gaining customers' attention by placing a remarkable product in the market -- a product that nobody can get elsewhere. In today's market, which is pretty much open, this idea has lost some relevance, but I think the underlying message -- differentiation can make a big difference -- still makes a lot of sense.

Having said that I don't intend to view that inventing a 'new-to-the-world' product or doing something very innovative with an existing product is something impossible to do for a small firm, but my view is that SMEs should learn to look beyond product-based (as well as price-based) differentiation on which, more often than not, they may find very difficult to compete with larger firms sitting on large pile of cash.

First of all, I think there's a market for great customer service forever. Always answer customer calls, make promises that you can keep, listen to them to solve their problems, give their complaint your attention, train your staff to be helpful and courteous, and do that extra to bring the oomph factor. Offering promotions and slashing prices may bring in new customers, but with the power of customer service, you can get them to come back once and again.

Similarly, customized service is a powerful niche. As a small business, you should treat every single customer like they are your only customer. Unlike large firms, you have that time and opportunity. So, make the best of this flexibility. Product variety should be another focus area. People usually like to visit those shops where they can get everything they need in one stop. So, instead of offering just one, offer a range of related products. Never hesitate to go a little out of your way for your loyal customers. And finally, make it easier for your customers to buy the product. It can make a big difference.

A small business should always focus on enhancing the value of its offers by every possible means -- be it customer service, product variety, user-friendliness, or personal attention. To stand out in a crowded marketplace, you need to portray yourself as unique, and to do that staying within your limited budget, you need to act smart. As a small business, the more you rely on things that cost nothing but mean so much, the better it is.