Warren Buffet says the ability to control the pricing with a higher profit-margin is, “building a moat deep and wide around your business”.

To do this, we need to differentiate our product or service. The more differentiated our product or service, the more customers care about the difference. The more they care, the more control you have over pricing. The more control you have over pricing, the more valuable the company.

In 2012, Tesla were about to launch their Model S saloon car. They were looking at how to position it to consumers for their marketing campaign and hit on two things that were different. Where it was produced and its speed. It was manufactured in California and the performance was 0-60 in 4.2 secs. So what?

When they researched these two potential differentiators with consumers guess what they found? No-one cared. US consumers bought cars that were manufactured in Detroit, South Carolina, Japan and Germany, so buying a car from California was nothing special.

And, the performance was nothing special either. Quite a few other cars could equal or better that speed such as Audi, Mercedes and Nissan.

 

But, what their potential consumers DID care about was the lack of emissions. They were highly environmentally conscious.As a result, Tesla focused on this as their differentiator and went on to sell over 200,000 Model S cars in 5 years with over half sold outside of the US.

Product and service differentiation is so important. It’s what makes us stand out from the crowd. It allows us to increase the value of our business and is a big predictor of future growth and profits.

If you practice Traction or EOS (Entrepreneurial Operating System) they call this differentiation your “Three Uniques’. When you try to be all things to all people, you simply can’t win. In order to grow and build value in your business you need to define what makes you stand out. Choosing your Three Uniques can be as simple as listing out everything that you believe makes your people, culture and overall business…unique. 

Try it…ignore your price and think of three things that make you stand out versus your competition, and if there aren’t any maybe you should be creating some. If you want to grow and build value into your business, what is that can make you stand out?