In my last blog, I discussed differentiating yourself with your product and product development approaches to gain a competitive advantage.  In this edition, I want to cover the topic of service differentiation.

What is service differentiation?  Most people go to delivery time first…how fast can the customer get their product after it is ordered? While in some industries this is critical, for many it is not.  I define service differentiation as becoming indispensable to your customer.  Another definition might be the infamous “easy to do business with”.  This can take many forms such as being a trusted advisor, collaboration between your two organizations or it can go as far as integrating your two businesses to operate as almost one.

In the Retail sector, many companies ask their suppliers to become category captains or champions.  Achieving this position provides these organizations with access to customer forecast information, detailed SKU sales information and the customer’s key strategies.  When you operate as a category captain, you get insights that the competition does not.  With these insights you can develop strategies to improve the revenue and profitability of your customer and differentiate yourself from the competition.   The other advantage, but being a category captain is not required, is typically these positions allow you to align your functional leaders from Product, Engineering, Supply Chain, Quality, and Merchandising with your customers functional leaders.  One-one-one meetings occur on a monthly basis and face-to-face meetings happen quarterly to discuss strategies that allow the organizations to become more integrated.

Creating a competitive advantage is a two-pronged approach.  Look at the products, understand how your customers use them and figure out how to make it easier and more profitable for your customers to use.  Look at the services you are providing to your customers and identify ways to make yourself indispensible.

Good luck.