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Mike Moran

How To Think About Differentiation For Your                      Business

Thursday, Jan 10, 2013

I read about this last summer, but one of my daughters called it to my attention again–a restaurant in Los Angeles that offers a 5% discount for tables that turn in all their cell phones for the duration of the dinner. So, instead of jamming cell calls and other onerous ways of forcibly stopping people from using their favorite screen, this establishment is going for something different. It’s very smart and there is a lot that we can learn from their approach, regardless of what business you are in.

Think about what problem most of these other restaurants are trying to solve. They are catering to people who want a quiet dinner without listening to other people’s phone calls. So, they forcibly collect phones and declare themselves an oasis of technology. What’s wrong with that?

  • You drive customers away. Maybe you attract a few people, but there are a lot more people that you annoy, so it might not be the right move. Now, it’s possible that a contrarian approach could work, but don’t jump into something hard to reverse without testing your idea. Too many of these attempts stem from personal opinions of the owners rather than any research.
  • You’re solving yesterday’s problem. Increasingly, people aren’t talking on their phone–they are texting quietly, without disturbing anyone. By taking their phones away, they can’t text either. Sometimes, we take what starts like a good idea but go to far with it.
  • Your audience is dying out. Most people who would be attracted to this kind of restaurant are older. Most young people wouldn’t be caught dead without their cell phones. Each year, more of your audience disappears, replaced by people who are more annoyed than enthralled by your policy.

Contrast these problems with the good will that our restaurant engenders by offering a discount for voluntarily giving up your phone:

  • You attract people who don’t like cell phones. While you can’t promise that people won’t keep their phones and yak on them during dinner, the odds are that there will be fewer people doing so, which can help. So, without annoying anyone, you probably have almost as strong an attraction to the target market that the forcible approach went after.
  • You attract people who want a discount. Most people who look for lower prices are accustomed to compromises. They are willing to sacrifice to save some cash. They clip coupons, change brands, accept slower shipping–you name it. Giving up their cell phones seems like a small accommodation.
  • You attract people who want an intimate dinner. This to me is the big one. Knowing that your date won’t be texting during your date is huge. Most people would agree that they don’t need to do it, but we are all addicted. We need something to cause us to give up our phones and pay attention to our dates.

You probably don’t have a restaurant, but there is a lot to learn here:

  • Use an incentive instead of a penalty. Rather than slapping late payers with interest charges, why not offer early payers a discount. You might be surprised at how many would be attracted to those kinds of terms. If you don’t believe this, test it.
  • Focus on a growing target. When you focus on a target market, choose a market that is growing and a problem to solve that is also growing. If you aren’t sure of what you are doing, see if there is a way to test your theory before you commit.
  • Have a Plan B. By taking a forcible approach, it’s hard to back off if it doesn’t work. You’ve annoyed some of your previous clientele and you have now started to attract people who really care about the quiet atmosphere. If the tactic does not prove profitable enough, rescinding the phone policy will annoy the people you tried to attract. On the other hand, if the discount doesn’t attract that many people, you can always keep it around anyway. Or you could have the discount be something you try for six months and you will keep it if enough people participate. Anytime you can test something before committing, you’re better off.

Maybe you are getting the idea that I believe in testing. Agile marketing is based on testing and it is the best way to find the differentiation for your business. Above all, remember that differentiation is not solely about being different. Any business can be different–differentiation is about being different in a way that customers will pay for. My dad used to tell me, “You’re unique, just like everyone else.” Don’t let your business settle for uniqueness when you can be differentiated–it pays better.